Thai tycoon’s purchase of NH Hotel Group in 2018 made him a major player in hospitality just a year before Covid slammed the industry, but with travel rebounding he is reaping the benefits and putting his energy into global expansion.
By Ron Gluckman, Forbes Contributor
Just over a year after buying Madrid-based NH Hotel Group in October 2018 for €2.3 billion ($2 billion at the time) and transforming his Thailand-based Minor International into a global hospitality company almost overnight, it looked like billionaire William Heinecke had mistimed the biggest acquisition of his more than half-century career. By March 2020, Covid-19 was declared a pandemic, and Minor International’s stock halved after a three-month slide. Travel bans and lockdowns hammered the tourist trade and the company racked up losses of over $1 billion in 2020 and 2021. “Covid-19 was one of the biggest financial challenges,” he says at the company’s headquarters in Bangkok’s chic Parq office building, “but I never doubted that we would survive.”
Heinecke not only survived, he thrived, and two years after travel bans were lifted, he is profiting from his prescience. As tourism rebounds, Minor International is in recovery and its U.S.-born, naturalized Thai citizen founder and chairman is poised to grow Minor in a major way into one of the world’s top hospitality companies. The 75-year-old plans to spend 30 billion baht ($864 million) through 2026 to open new lodgings and revamp existing ones, and is also moving to an asset-light strategy while making concrete plans to pare the company’s hefty debt. Heinecke’s stake in Minor International is the main source of his $1.4 billion estimated wealth.
NH Collection New York Madison Avenue.
Courtesy of Minor International
With tourism rebounding, Minor International saw its net profit in 2023 jump threefold on a 22% rise in revenue. It predicts annual net profit and revenue growth of around 17% and 9%, respectively, in the three years through 2026.
The company that Heinecke started building even before he turned 18 (hence the name Minor) has over 78,000 staff in 65 countries and comprises two divisions: Minor Hotels and Minor Food. The hospitality business made up almost 80% of revenue in 2023 and as of Sept. 30 operated 561 properties with more than 81,000 rooms in 56 countries under eight in-house brands and a handful of others, including Four Seasons, St. Regis and JW Marriott. Heinecke’s goal is to grow the total to 750 properties with 120,000 keys by end-2026, targeting markets from Asia to Africa and the Americas. The rest of Minor International’s revenue comes from Minor Food, which operates 2,661 quick-service outlets, a number it plans to boost to 3,700 by end-2026. Presently, around half are owned and the rest franchised, in 24 countries under 64 brands. Its chains include its own The Pizza Company and global franchises such as Burger King, Sizzler and Swensen’s.
Better than Ever
Minor International is notching up record revenue and profit as the travel floodgates open after Covid-19 and its NH Hotel deal starts to pay off.
Source: Minor International
Heinecke gave up the CEO role at Minor International almost five years ago, but he remains the driving force behind its worldwide ambitions in the hotel sector. The NH deal, which added 385 mostly upscale business and luxury hotels in Europe to his 161-strong portfolio, was a game-changer and a calculated risk that paid off, he says. It was more than twice the size of Minor Hotels based on number of rooms, and before the purchase just half of Minor International’s revenue came from lodgings. “It wasn’t in my wildest dreams [to be a worldwide hotel player],” he says. “We were happy to keep growing…but I don’t think we saw ourselves having a chance to break into the global levels.”
Left to right: Qasr Al Sarab Desert Resort by Anantara; Anantara Palazzo Naiadi Rome Hotel.
Courtesy of Minor International
That said, Minor Hotels had already expanded with a series of deals, including its 2011 purchase of Oaks Hotels, Resorts & Suites for A$84 million ($90 million at the time) and the €294 million acquisition in 2016 of Tivoli Hotels & Resorts, which has high-end properties in Portugal and Brazil. “We prepared ourselves with a lot of smaller acquisitions,” Heinecke says. “It wasn’t necessarily a road map…it was the way it came along,” he explains. The acquisition of Madrid-based NH was on another level, however, bringing not only new brands but a wealth of standout properties in European gateway cities such as Amsterdam and Milan, including former palaces and historical buildings, some of which are being rebranded as luxury Anantara or Avani hotels, Heinecke’s homegrown brands.
Of the almost 190 new hotels Heinecke plans to add by end-2026, about 100 will be in Asia and 50 in Europe. In Asia, Minor Hotels is looking to ramp up in China, where it has five properties and plans to open two more in the coming months, and also in India, where it has two properties but aims for 50 within a decade. In Southeast Asia it’s working on a 200-key luxury Avani hotel in Singapore to launch in the first quarter of 2027, its first property in the city state.
It’s also bullish on Thailand, where the government forecasts almost 37 million international arrivals in 2024, up 30% from 2023 but still off pre-Covid levels of just under 40 million in 2019. Tourism is expected to get a boost from the HBO series White Lotus, which was partly filmed at two of Minor Hotels’ 25 properties in the country. Another pair of Heinecke’s resorts in Thailand feature in the movie Mother of the Bride, released earlier this year and in which the hotelier has a cameo. In total, Minor Hotels has 114 projects in the pipeline.
Suite
Minor International’s fast-growing hotel empire owned, leased or managed 561 properties worldwideas of Sept. 30, 2024; its expansion blueprint targets 750 properties by end-2026.
Source: Minor International
In April, NH Hotel Group was renamed Minor Hotels Europe & Americas, aligning it with the parent brand. In January, Gonzalo Aguilar will become its CEO, having previously worked for Marriott in EMEA and throughout the Americas. Expansion in that region could be the final step in making Minor Hotels a truly first-tier global hospitality firm, according to Robert Hecker, Pacific Asia managing director of Horwath HTL, a Singapore-based hospitality consultancy. “The U.S. is still the tough one, or, let’s say, the Americas,” he says. Minor International didn’t outline how many hotels it plans to add in the Americas but says it will continue to grow in the region so that it remains about 10% of total room count.
“It wasn’t in my wildest dreams to become a global hotel operator.”
Also key to expansion is the transition to an asset-light strategy whereby Minor International manages hotels owned by others. Heinecke says the company was moving in that direction but the NH hotels acquisition made it more asset-heavy. As of Sept. 30, 69% of the company’s hotels were owned or leased and the rest were managed. While the goal is for a 50-50 split by end-2026, Dillip Rajakarier, who succeeded Heinecke as CEO of Minor International in January 2020, says it’s more about “asset-right” than asset-light. “There’s no overall formula. It’s about the property and what makes sense for the owner,” he explains.
Top to bottom: Heinecke founded The Pizza Company in 2000 and expanded it in Asia and the Middle East; The Coffee Club is one of the many brands Minor Food brought to Asia.
Courtesy of Minor International
Analysts mostly list the company as a buy. Teerapol Udomvej, equity analyst at Bangkok-based brokerage FSS International Investment Advisory Securities (FSSIA), in an October report predicts full-year core net profit will jump 16% to 8.3 billion baht on a 6% rise in revenue to 157 billion baht, citing strong contributions from NH hotels and properties in Thailand. Vatcharut Vacharawongsith at RHB Securities (Thailand) rates the stock a “strong buy,” saying that even if growth in Europe tapers, 2024 should end well as the holiday season boosts takings from properties in Asia.
One area of concern, however, is Minor International’s debt, much of it taken on for the NH deal. “It’s been coming down, but I think we need to reduce it a bit more,” says CEO Rajakarier. The company plans to halve its liabilities, which were $7.4 billion as of end-September, partly by floating a $1.5 billion real estate investment trust within the next 18 months, comprising an unspecified number of hotels. It says that will free up $700 million to help repay debt and fund growth. FSSIA’s Teerapol notes that the asset-light strategy will also help because it allows the company to avoid the capital cost of owning properties while the downward trend in interest rates will trim interest expenses.
Heinecke may no longer be CEO, but he’s still generally in the office every day. “He’s very, very hands-on, and he’s constantly working,” says Anil Thadani, chairman of Singapore-based private equity firm Symphony Asia Holdings, a longtime investor in Minor International and a board member from 1998 to 2022. He met the entrepreneur in the early 1980s. “I really liked him. I liked his passion, and his ideas,” he says. Investing in Heinecke was “kind of a no-brainer,” he adds. “You don’t always get it right, but with Bill, we got it really, really right.” Thadani says one key to Heinecke’s success is his competitive nature: “He’s one of the most competitive people I’ve ever known, he just hates to lose.”
Heinecke, a pilot himself, is co-owner of aircraft charter company MJets.
Courtesy of Minor International
Heinecke doesn’t lose often, but his trajectory hasn’t been challenge-free. The maverick says he was almost wiped out by the 1997 Asian financial crisis and again in December 2004 when a tsunami roared across many parts of Asia, killing at least 225,000 people, including guests and staff at his Anantara resort at Khao Lak, north of Phuket.
Fast forward to 2020, when Covid-19 devastated the hospitality industry. To survive, Heinecke had to close some hotels, sell assets and stockpile cash. There have been setbacks, too. He was among the pioneers bringing fast food to China, opening the first Pizza Hut in Beijing in 1990, but it was slow to catch on and he sold the business. When asked his advice for young entrepreneurs, he says: “When an idea fails, use it as a learning experience and move on quickly to the next project.” Heinecke later returned to China and it now accounts for 14% of Minor Food’s revenue, led by 130 outlets of a Sichuan-style grilled-fish restaurant chain called Riverside.
Also key to expansion is the transition to an asset-light strategy.
Heinecke, whose father was in the U.S. military and then the foreign service, was brought up in Asia, living in Japan, Hong Kong and Malaysia before moving to Bangkok as a teen. From a young age, he says, he knew he wanted to be in business. He launched his career at 17, writing a weekly go-karting column for the now-defunct English-language Bangkok World while selling advertising along-side his coverage in lieu of pay. Within a year, he was the newspaper’s advertising manager. A year later, he borrowed the equivalent of $1,200 and launched a cleaning service called Inter-Asian Enterprise and a radio advertising company called Inter-Asia Publicity that he sold in 1974 to ad agency Ogilvy & Mather.
In 1970 Heinecke set up Minor Holdings, later rebranded as Minor International, the name reflecting his legal status (at the time, the age of majority in the U.S. was 21). From there he hustled to find business opportunities, including manufacturing golf gloves and opening his first hotel, in Pattaya, in 1978. In 1980 he brought Pizza Hut to Thailand, convinced the American fast-food brands he loved would also appeal to Asia’s youth. He dropped the franchise in 2000 and set up The Pizza Company, which he then expanded into Southeast Asia, China and the Middle East. He also launched other quick-service lines such as Mister Donut and Dairy Queen from the U.S. and The Coffee Club from Australia.
Kevin Whitcraft, CEO of RMA Group, a privately owned Thai company that has The Pizza Company, Swensen’s and The Coffee Club outlets in Cambodia, Laos and Myanmar, all franchised from Heinecke, is a longtime friend as well as business partner. He says Heinecke is “a tough negotiator, but he’s great to work with, he really knows his business.”
Heinecke still delights in a fresh business opportunity. “You won’t believe Pop Mart,” he says, referring to a Chinese maker of figurines sold in so-called blind boxes. He snapped up the Thai distribution rights after a member of K-pop band Blackpink was seen with the toys on social media. “When we opened the first [Pop Mart] store, people lined up for 24 hours to get in,” he says. The Pop Mart venture comes under Minor Lifestyle, a retail division of Minor Hotels that distributes clothing and household brands through 300 outlets in Thailand and accounted for 1% of total revenue last year.
Heinecke in Anantara Siam Bangkok Hotel.
Oat Chaiyasith for Forbes Asia
He has always been a risk-taker. Growing up, Heinecke raced go-karts, then four-wheel drives on off-road jungle tracks before graduating to track racing. He has long been a collector of vintage cars and nowadays participates in rallies rather than races. He also pilots planes and cofounded an aircraft charter company called MJets that has eight jets in addition to offering ground handling and other services. “But I don’t fly much anymore,” he says, “Nobody wants to fly with a pilot in his 70s.” He still enjoys scuba diving and is a passionate sailor. RMA’s Whitcraft, 51, who attended the same international school in Bangkok as Heinecke and is a fellow sailor, says Heinecke was a role model for him: “He worked hard, and played hard, with cars, flying planes and scuba diving.”
The tycoon’s two sons aren’t active in Minor International, although the oldest, John, 52, worked for Minor Food for many years and remains on the board. “They love the business…and they play a vital role in where [it is] going,” Heinecke says, “but they don’t want to run the business.” He adds that family succession was never a consideration because Minor International has always been about professional management. “We’ve always been looking for the best people to run the company,” he says.
Meantime, Heinecke maintains he’s not even thinking about retirement. “I’m happy as long as I’m healthy and I can stay active,” he says, adding, “I’m having more fun now in my 70s. Who knows what I’m going to do in my 80s?”