Thai hotel tycoon sees bright spot in Europe as Asia stays shut

BANGKOK, June 24 (Bloomberg): The Thai-American founder of Minor International Pcl, which runs more than 500 hotels across 55 countries, sees green shoots emerging in Europe properties while those in Asia remain squeezed due to resurgences in coronavirus outbreaks.

Italy, Spain and the U.K. are seeing businesses reopen and resumptions in domestic tourism, helping boost Minor’s hotel-occupancy rate to about 40% in Europe, Bill Heinecke, founder and chairman of the Bangkok-based company, said in a Bloomberg TV interview on Friday. Operations in Asia remain restricted as the region copes with continued outbreaks.

"I’m reasonably optimistic about the rest of the world, but a bit depressed about Asia,” the 72-year-old Heinecke said in the interview with Haslinda Amin and Rishaad Salamat. The policies of some Asian governments to fully control virus outbreaks are "killing businesses, and economies are suffering much more greatly than even from the disease,” he said.

Minor’s business in Europe is mostly through NH Hotel Group SA, which it acquired control of in 2018. Cash flow will swing to a positive level in the region this month, with earnings before interest, taxes, depreciation and amortization expected to follow in August, he said. Revenue per available room remains "a bit low” compared to pre-pandemic levels.

The group’s properties in its home base of Thailand, as well as operations in neighboring Indonesia and Malaysia remain mostly locked down due to restrictions to curb the spread of coronavirus, especially the more-contagious delta variant, he said. The outbreak is overwhelming public-health systems across much of Southeast Asia, where vaccination rollouts are slower-than-expected.

"We’re not going to get to zero cases. This is a pandemic that we’re going to have to learn to live with it the best we can,” Heinecke said. "Vaccinations are the key to opening up in any country. We need more vaccinations, not more lockdowns or handouts.”

Minor’s revenue from Europe rose to 51% of the company’s total sales before the pandemic in 2019, up from 7% two years earlier before the NH Hotel acquisition. That proportion fell back to 19% in the first quarter of 2021 amid lockdowns -- with 41% coming from Thailand, where Minor also has substantial restaurant and consumer-product units.

Heinecke said easing of rules to allow people from mainland China to travel abroad will have a "huge impact” on the group’s hotels in Southeast Asia and Europe. He expects outbound travel to be allowed in mid-2022.

To boost liquidity and cash flow, Minor plans "more asset rotations.” The company this week announced the sale of two hotels in Portugal for 148 million euros. - Bloomberg

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