U.S.-Thai Billionaire Expands Hotel Empire to Tap Chinese Boom

(Bloomberg) -- Billionaire William Heinecke is on the lookout for further takeovers after more than tripling the number of hotels his Minor International Pcl controls through the acquisition of Spain’s NH Hotel Group.

Heinecke, a U.S.-born turned Thai citizen, says it’s all about size when it comes to fighting off competition and capturing the surge in Chinese tourists.

U.S.-Thai Billionaire Expands Hotel Empire to Tap Chinese Boom

“What allows you to fight and be competitive today is scale,” Heinecke, the chief executive officer of Minor, said in an interview in Bangkok. “If you’re not growing and you’re not large, it’s very hard.”

The number of Chinese outbound tourists climbed 6 percent to 135 million in 2016, and they spent $261 billion, or a fifth of the world market, according to the United Nations World Tourism Organization. That’s set to continue surging, with the number of Chinese with a passport expected to double in the next two years to 240 million.

“I’ve watched travel for all my life and I’ve never seen it decline," Heinecke said. "I think it’s going to get on a more rapid path and the Chinese are just fueling that.”

U.S.-Thai Billionaire Expands Hotel Empire to Tap Chinese Boom

Minor’s brands include the luxury Anantara resorts and upmarket AVANI hotels, mostly located in Thailand. A JW Marriott in Phuket and some domestic Four Seasons hotels are also part of its portfolio.

Through acquisitions it has added the Elewana Collection in Africa, Oaks Hotels & Resorts across Asia-Pacific and the Middle East, and four-to-five star Tivoli hotels and resorts in Portugal. The mid-market NH Hotel Group will give Minor 385 more hotels.

U.S.-Thai Billionaire Expands Hotel Empire to Tap Chinese Boom

Once Minor and NH Hotel are consolidated, the group will have more than 80,000 rooms, making it the world’s 14th largest hotel operator, according to data compiled by Bloomberg. Minor’s stake in NH Hotel is on course to exceed 50 percent, and the firm aims to take it up to as much as 55 percent, while leaving the company listed on the Madrid Stock Exchange.

Heinecke isn’t looking to stop there. Minor has signed at least two hotel management contracts in Japan, and is looking for acquisitions because Japan is the top destination for Thai travelers. He says he is “opportunistic” if the right U.S. deal comes along.

U.S.-Thai Billionaire Expands Hotel Empire to Tap Chinese Boom

Minor aims to have between 800 to 1,000 hotels in the next five years even without further acquisitions, and “much more” if deals are reached, Heinecke said.

“The hotel industry is still very fragmented and even with Minor’s aggressive plans to expand, it will still be difficult to grow to the size of its peers,” said Bloomberg Intelligence analyst Margaret Huang. Minor will have to focus on its loyalty programs and technology in order to compete with the big global brands, she said.

Heinecke and his family have a 35 percent stake in Minor worth about $1.9 billion as of Tuesday’s close in Bangkok.

“To compete in this market, you have to be world class, and to be successful and smart, you’ve got to be super-world class,” said Heinecke.

©2018 Bloomberg L.P.