Below is the transcript of a CNBC interview with Bill Heinecke, Chairman, Minor International. The interview played out in CNBC's latest episode of Managing Asia on 08 May 2020, 5.30PM SG/HK (in APAC). If you choose to use anything, please attribute to CNBC and Christine Tan.
Christine Tan (CT): Bill, your business spans hotels, resorts, retail stores, restaurants. From where you sit in Thailand right now, can you give us an update on the state of your operations? How you dealing with the current pandemic?
Bill Heinecke (BH): Everything else was a walk in the park. This is the most serious event that we've ever seen. The most serious crisis. Basically, everything is closed. We've got almost all our hotels in Thailand are closed with the exception of the Anantara Siam. All of our restaurants are closed with the exception of delivery. So that's happening. All of our retail stores are closed and we're just online, selling online.
CT: How big of a hit do you think it will have on your overall business?
BH: Big, so big that we haven't been able to determine it yet. But I think it all really depends on how fast the recovery is and how fast we open up. With all the steps, not only our government is taking, but globally around the world, we're going to see a fairly quick recovery. When I say quick, I mean within this year, we'll see some recovery. But I don't think we can measure it by first quarter or second quarter or third quarter.
CT: A lot of talk about recession. A lot of talk about depression. Are you worried?
BH: Yes. I think this is a depression that we're going through. It will depend very quickly on how fast we open up again. So, in the same urgency that I urged our government to take the swift action that they did, as other governments have, I think it's going to be critical that we also have to take reasonable action to reopen.
CT: Before the pandemic, the last time I spoke to you, you were busy expanding into Europe. You had just bought Spanish hospitality operator, NH group, for $2.9 billion. Your global ambitions, are they now on hold? Are you suspending further investments?
BH: No, we're not. The main focus right now is on this coronavirus. Once we begin to see the emergence of back to business as usual, which it may never be as usual, but nonetheless, we will continue with our global plans.
CT: What kind of leadership do you want to provide at a time like this to steer the company and your people out of this crisis?
BH: I think the key thing for us is not to panic. We have to focus on the problem at hand. We've got to make sure we treat it as a learning exercise. Every other crisis that we've ever had in Thailand, we treated it as a learning exercise, whether it was SARS or whether it was a tsunami. We're going to learn a lot from this pandemic and we're going to be ready for the next pandemic. Never say never.
CT: What lessons from the past crises have you picked up and you are now applying to this particular pandemic?
BH: Well, certainly cash is king and the very first thing that we did was make sure that we're not going to run out of cash. So, we opened up credit lines and re-evaluated everything to make sure that we had enough money to last through a much longer pandemic. We didn't expect to see the beginning of opening in Thailand this soon, which is in May. And I'm very pleased to see the recovery occurring in many of our other markets, like China, Taiwan, Korea. So, all of this is going to have a very positive effect and improve the situation rather quickly.
CT: Your operations are closed. You employ in Thailand alone some 37,000 staff. What does it mean for them when you are temporarily closed? Are their livelihoods impacted?
BH: Oh, absolutely. Everybody's life is impacted, whether you're at the corporate office or you're in one of our hotels. For the most part, most of our staff have been furloughed. We're in the hotels because they're all closed under force majeure in this market. But we will be planning to bring them back on as we reopen. We expect hotels will begin to reopen in June or July. We've seen restaurants beginning to open, especially upcountry. I think Bangkok may have to suffer a little bit longer. Certain key destinations like Pattaya and Phuket which were major tourist destinations, there are going to be the ones that probably come out of a bit slower. We have other provinces in Thailand which have not a single case. It's time to begin to see a slow reopening that hopefully, the numbers won't go against us. But at the same time, I think we have to be prepared some numbers will as you open up. This is a virus that can be seen and it's going to be with us for a long time. But we can't stop the economy of the country just to wait for a vaccine or for the virus to end. It's not going to improve for a considerable amount of time. I think everyone beginning to realize that.
CT: So, Bill, do you have any idea when you could start reopening your business and how will you restart your operations?
BH: We'll restart slowly, because I think the demand is going to be much different than it was before. We're going to have restaurants that will only have half the normal seats for sure. We're going to have hotels that will only need 30 or 40 rooms to begin with. They will only be occupying 20 percent occupancy. We think in Thailand, it's going to be domestic travel that starts first. And that's probably going to be the same thing that we see in Europe where it's going to be domestic travel. And then later, hopefully we'll get the bilateral travel where we will recognize certain countries that have got the coronavirus under control and will allow them to come to Thailand and hopefully they'll allow Thailand to go to them. So, China, Taiwan and Korea will be some of the first ones for that.
CT: So, when do you expect travel to fully resume as normal then? How many years will it take?
BH: I don't think we're talking years. Maybe by September, October, we'll begin to see travel opening up internationally. But then that's going to depend very much on how individual countries have handled their pandemic outbreak and whether they're going to be able to safely travel.
CT: Do you think this pandemic is going to dramatically transform and change the hospitality business?
BH: For a while, yes, because until we have a vaccine…
CT: In what way?
BH: I think you're going to expect restaurants to be less crowded. You're going to expect to see different regulations within hotels. I think you're going to see temperature controls at almost everywhere you go. Eventually when we have a vaccine, I think people will have to have a record of that vaccine that they are vaccinated so that they can travel more freely. Just as we used to do in the old days when we had yellow fever and typhoid and other kinds of shot records which we had to show every time we went into a country. If we didn't have the right shot records, we couldn't get in and they'd send you home just as easily without a visa as they would without a shot record.
CT: Bill, at a time like this, during this uncertainty, a lot of employees, a lot of people are worried about their jobs. What are you telling your people? What's the message you sending out to them?
BH: Stay confident, stay positive, because we will weather the storm. We will emerge stronger, but it's going to take patience. We're going to have to go slowly because health is at stake. Obviously, no one wants to take a decision that will affect the health or safety or possibly kill someone. But we have to accept the fact that if we're going to get back to the economic growth that we need to keep this world moving, we're going to have to slowly begin to open up, and we're going to have to take positive steps and allow businesses to return.
CT: So, Bill, in the meantime, as you hunker down, as you ride out this pandemic for the next couple of months, are you taking the time to rethink your business strategies? Are you taking the time to realign some of your ideas and try new things, be more inventive? What you have up your sleeve these days?
BH: We're trying. But I think, you know, we never really stopped reinventing ourselves. I think we've realized that this is just another crisis along the way and we've got to adapt forward. We've got a very agile workforce within our company and they're adapting very well. I think we're going to come out of it and we will probably have a few new ideas on business. You know, it's amazing for us in Bangkok - our delivery business today is almost as big as our total food business was pre-crisis. So, we've already been able to move and adapt with teams that are very focused on the opportunities while we sit back with the ones that can operate.
CT: And finally, what do you tell people about how Bill Heinecke and Minor International will re-emerge from this crisis?
BH: Stronger, of course!
CT: Bill, thank you so much for talking to me. Stay well and stay healthy.
BH: You, too. Thank you.
Jessica Tan Shu En
Marketing and Communications Assistant, CNBC International
D: +65 6326 1791
M: +65 9105 4719
CNBC is the leading global broadcaster of live business and financial news and information, reporting directly from the major financial markets around the globe with regional headquarters Singapore, Abu Dhabi, London, and New York. The TV channel is available in more than 380 million homes worldwide.
CNBC.com is the preeminent financial news source on the web, featuring an unprecedented amount of video, real-time market analysis, web-exclusive live video and analytical financial tools.
CNBC is a division of NBCUniversal. For more information, visit www.cnbc.com