On April 9, HOTELS Editor in Chief Jeff Weinstein was among a handful of journalists from major travel and hotel publications to speak with Minor International founder and Chairman Bill Heinecke about the state of the company’s hotel business, which includes brands such as Anantara, Avani and NH Hotels.
With 540 hotels across 55 countries, Heinecke, hunkered down in Phuket where hotel construction was going on, addressed Minor’s response to the COVID-19 crisis, how Minor’s brands are engaging with guests, how the company is performing through the crisis, and what a post-virus hotel world might look like. Here is part one of a two-part interview, which took place via a Zoom videoconference, with Heinecke.
Q: What is the state of business in Thailand and for Minor’s hotels?
Bill Heinecke: Thailand is taking a very hard look at what has to be done in order to try and keep our (COVID-19) numbers as low as possible so that we don’t follow some of our friends in New York or Italy or Spain. They’re saying that next to Bangkok, Phuket is the hot spot. Obviously, we were one of the most popular destinations so I’m sure we had more than a few travelers that brought us some hidden enemies in the name of the coronavirus. But I think right now Thailand’s got a chance to probably do a better job of keeping it under control than most countries… I can tell you that we’ve only got a couple hotels really open. In Korea, we’ve got one open there. We’ve got two or three in China that are open.
Some of the hotels in the Middle East are still open. As a matter of fact, Desert Islands Sir Bani Yas, where we have our own zoo with a huge number of animals roaming free, is at 100%. We still have some things going on in Mozambique where we service some of the oil fields. But frankly, I would guess, out of 540 hotels we’ve probably got eight or nine that are really operating in any form or fashion.
Q: Are there some markets that are faring better than others or certain destinations that you think may bounce back quicker once we’re in recovery mode?
BH: The first and most important thing is to get into that recovery mode. Right now I’m sure that there’s a few people in China that would like to travel but there’s really nowhere to go. All of our airports are closed. All the airlines are down. We have nothing flying in or out of Singapore, Thailand, or many of these other destinations here. I don’t think anything’s going to happen for the next four weeks and then I think you’ll begin to see those that have conquered the virus will begin to slowly open up. I would have hoped that we could start opening some hotels in June at the earliest. And that would allow us to start taking some of the areas that are clear of the virus, such as China, or where the virus is well under control such as Korea or Taiwan.
Q: What’s your estimate for recovery, especially in your markets in Asia Pacific?
BH: It really depends on how quickly this virus goes down. I’d like to hope that we might be able to see some hotels reopening in June and especially they’ll probably start with domestic business. If we kill the virus then they’ll open up to Chinese business and then as we see our neighbors coming back on stream. It’ll come. But it’s going to be a very slow ramp up. I hope that we don’t sacrifice all of our rates because the products that we have in that Asia Pac are fantastic and it would be such a shame to see the rates crash as we try to get them back up and the occupancies up. Because I think occupancy’s going to take time. It may be easier to keep the rates where they should be rather than trying to drop them to record lows and trying to fill up with occupancy that I don’t think is going to come.
Many of these markets may be ready for business in the fourth quarter and in pretty reasonable shape. But I think it’s going to take most of next year to really get us back to where we should be if the virus is killed or if we can find a cure for this thing.
Q: Is Minor Hotels participating in any type of relief for staff or essential workers?
BH: We’re really very focused on all of the hospitals, and we’ve been delivering food and supplies to both from our food operations here in Thailand as well as from the hotels… Some of our hotels in Germany have been taken over for some of the frontline workers. In the Seychelles, our hotel there is hosting frontline workers, too.
We’re trying to do our bit and it’s really tough because many of our staff are on leave without pay. Others are on reduced salaries. It’s been pretty difficult but I think our first and foremost (priority) is safety for everyone and then trying to keep the team together. We’re fighting with the governments to open up things like social security, which we’ve been paying millions of dollars into in Thailand but to date we haven’t been able to open that up for our staff. In other countries like Australia, the U.K. and parts of Europe we’ve already seen great support. I think we see some of it coming in the U.S. but we’re very limited to what we have in the U.S. We have a hotel that didn’t quite open yet in New York with NH.
Q: When business does resume, in which type of travel do you predict an uptick?
BH: Certainly, the domestic market will be one of the first to rebound. There will be confidence to travel again domestically. There’s a lot of pent up demand for business travel. These Zoom conferences are great but they don’t replace meeting with someone face to face. So, I think you’re going to see quite a bit of business that has to come again. Meetings are going to take a lot longer to gear up – MICE and that sort of thing. And then probably you’ve got your leisure. You’ve got a lot of pent-up demand in China. They haven’t been traveling since before Chinese New Year and by the time they start traveling again it’s going to be the second half of the year. We expect them to be back in force as soon as we can give them a clean bill of health on our own coronavirus here.
Q: How can hotels gain back confidence among travelers who may now be wary of large shared spaces?
BH: Difficult one. We have our air charter business and we take the temperatures of everyone… I think we’ve got to maintain that. People may go back to having to show that they’ve been vaccinated when they start traveling. Wherever we think that there’s going to be difficulties, where the virus could be present, you may see masks being used… We’re the largest delivery company in Thailand – delivering everything from pizzas to Burger King to what have you. There we’ve promoted contactless service. There’s no contact with the customers anymore. They can do everything without touching anything. I think people are going to want to have less contact and not be fawned over for too long. You’re going to see a lot more people that want to have more space. They may find that having all this social distancing appeals to some people. I expect a lot of things will change.