THE PRODIGIOUS BILLIONAIRE
From a teenager with a thousand-dollar loan to helming a sprawling multi-billion dollar empire, William Heinecke shares his success stories, business strategies and the importance of philanthropic outreach.
William E Heinecke, better known by the nickname Bill, is relaxed and casually dressed as he greets me warmly at the entrance to Villa Similan, his ultra-exclusive hilltop home at the private Layan Residences estate, overlooking the Anantara Layan Phuket Resort.
He preferred to do this interview at his weekend sanctuary on a Saturday where his wife Kathy and grandchildren were happily gathered in the 8-bedroom 3,200 sq m mansion with its own swimming pool, private movie theatre and designer spa. This is as opposed to his upscale and bustling office in Bangkok, where he currently sits as CEO of Minor International Public Co Ltd (MINT).
Currently the 15th wealthiest man in Thailand with a net worth of US$1.55 billion and still very much in the driving seat of his expansive business empire, Bill became a billionaire at age of 64 years in 2013 when his net worth more than doubled from the year before.
What does reaching this pinnacle of wealth feel like? “I do not think about it very much. A billionaire is just a title. It does not make me feel any different than I did 25 years ago. I am still living the same way and doing the same things,” Bill muses.
A Millionaire At 21
The consummate entrepreneur had started off peddling lemonade for profit at the astonishing age of just two-and-a-half years. He then began selling advertising space when he was 16 years old; started an office cleaning and radio advertising business when he turned 18; got married the same year and became a millionaire at just 21. Today, Bill helms a hospitality and lifestyle conglomerate with over 155 hotels and resorts, 300 retail outlets, 2,000 restaurants and employ over 50,000 staff in 32 countries. Not bad for a bright-eyed and determined teenager who started his own business with US$1,200 borrowed from a moneylender.
His public listed company, MINT focuses on three lines: hospitality (hotels), food and retail (fashion and lifestyle).
In addition to his own hotel brand, Anantara, he also has hotels managed by St Regis, Four Seasons, Oaks Hotels & Resorts, Radisson and Marriott. MINT’s recent €168 million acquisition of six Tivoli Hotels and Resorts marked its pivot into South America and Europe. Over the last two years, the group has invested over US$550 million in hotel projects in southern and east Africa, Asia, Australia, South America and Europe with a total room inventory of 19,000.
Bill comments that 2016 was one of the company’s “most challenging” to date. “We did not lose any money but we did not set any records in terms of earnings either,” Bill reveals. “We went through headwinds including the passing of our King in Thailand, flooding in the South, a drop in the number of tourists, especially Russians going to the Maldives and faced strong competition there as well as in Australia.” Despite this, he remains optimistic that 2017 and 2018 will prove to be strong years for the group, especially within emerging the Middle Eastern and ASEAN markets.
“We have been investing quite significantly in Africa which, in the long term, could provide very interesting growth potential for us. We have just started investing in Europe with the acquisition of the Tivoli Hotels and we will also be opening two of our hotel brands – Anantara and Avani – in Portugal, this year. Altogether, we have 14 new hotels – 12 in Portugal and two in South America, adding a total of around 3,000 keys.”
With such a brisk acquisition pace, what is the group’s overall game plan?
He explains, “We used to be very asset heavy because we owned everything, including all the hotels and restaurants. Today, we only own half the restaurants; the other 50% will be franchises. Now, we probably own one third of the hotels, the other one third are joint ventures and the remaining one third are just managed by us. I would say that today we are asset ripe, as our strategy is to achieve a very good return on investments. In some parts where we are not comfortable with yet, like China or the Middle East, we will be asset light for the moment. It really depends on the region and the appetite we have as a company.”
Acquiring Distressed Assets
Another strategy proving successful for MINT is the acquisition of distressed assets. “Sometimes we will go into an asset if it is at a distressed price. Typically, we do not acquire insolvent companies that need massive work to turn around. This is because fundamentally we would like to invest in a sound business and good asset. We seldom get into turnaround situations,” Bill elaborates.
Notable examples of these sort of acquisitions made by MINT include Oaks Hotels & Resorts in Australia as well as the near bankrupt Brazilian hotel group, Tivoli Hotels & Resorts which were picked up at steep discounts to valuation. Over the last seven years, the company has ploughed more than US$1 billion in acquisitions.
“As a public company, we have to deliver profits for our shareholders and over the last 15 years, we have given them excellent returns. However, beyond just profit we want to deliver something we are proud of and ultimately contribute more to society as a whole.”
This belief extends into MINT’s investments outside of hospitality, as Bill enumerates. “In Africa, we are responsible for looking after hundreds of thousands of hectares; we also have huge tracts of land in Cambodia which we preserve for wildlife conservation and to prevent illegal poaching and logging. These affirmative actions are very important to us. We usually ask ourselves what is important besides making money, and for us we consciously want to give back instead of just taking. This is something we now have the luxury of being able to afford time on.”
Beyond just rescues, the Golden Triangle Asian Elephant Foundation provides elephants with a comfortable living environment and helps their mahouts find employment.
Apart from real estate, Bill has also set up a number of foundations for different causes. The Heinecke Foundation, for example, is primarily involved in education for children of all ages, providing about 1,000 scholarships a year that can range right through to university. Other Heinecke initiatives include the Golden Triangle Asian Elephant Foundation and the Mai Khao Marine Turtle Foundation, which are focused on rescuing and releasing elephants and turtles respectively. He is also spearheading a dugong conservation programme which will help rehabilitate areas with sea grass to make them more hospitable for these vulnerable sea mammals.
Apart from corporate social responsibility (CSR) considerations, the bedrock of MINT’s management philosophy is to deliver an outstanding experience for its guests.
“We are not trying to be the biggest or most profitable hotel group in the world. We have small hotels in Africa with just 20 cabins and you can never make a lot of money with such a small inventory. But if you enjoy wildlife and photography in Africa, these are incredible experiences,” Bill shares. Going deeper, he adds, “I enjoy doing things in new countries and sharing the experiences with other people. That to me is worth more than money. As a result, we will probably never challenge the Marriotts and Starwoods who concentrate on profit maximization.”
The Heinecke Foundation provides about 1,000 students a year with scholarships right through to university.
As an employer of over 50,000 people in labour intensive industries, a major challenge for the company is attracting and retaining talented employees.
“One of the main positions is not the chief financial officer (CFO), but the chief people officer (CPO), because we have the responsibility of finding another 50,000 people between now and the next five years,” states Bill. While employees within the company get first pick, recruiting new employees is still a necessity – which often needs more than just money as a draw. “That is why it is important to have our sustainability programmes. People can earn the same amount of money regardless of which hotel they work in, but our emphasis on giving back to society will attract the right people. Many talented individuals may have already achieved financial success, and would be looking for something more fulfilling in their careers.”
Bill credits his wife of 49 years, Kathleen Ann Worthen, for being a pillar of strength during his darkest moments of despair.
While its hospitality brands may be the first to come to mind, MINT’s food and beverage (F&B) operations are just as extensive. Bill is credited for introducing pizza to Thailand in the 1980s, chomping the largest slice of the market after his epic battle over it with Pizza Hut. He now owns one of the largest fast food service operations spanning Asia, the Middle East and Australia. Besides his own home grown The Pizza Company, he also owns the local franchises in Thailand for Burger King, Dairy Queen, The Coffee Club, BreadTalk, ThaiExpress, Swensons and Sizzler.
n the lifestyle front, his company operates retail trading and contract manufacturing and is a leading distributor of international lifestyle consumer brands in Thailand. Focusing primarily on fashion, lifestyle and household products through retail, wholesale and direct marketing channels, the division’s biggest brands include Banana Republic, Espirit, GAP, Bossini, Charles & Keith, PEDRO, ANELLO from Japan and even Etam, an upscale lingerie brand from Paris.
The US native, who became a Thai citizen at 42 has earned enough battle scars to write a book, titled, The Entrepreneur: 25 Golden Rules for the Global Business Manager.
But he gamely states that rules he propounded in his book are meant for the “obedience of fools and the guidance of wise men” and that the reader can bend or break all his rules and still be successful. “It is mostly common sense but the one quality you need is luck, without which you cannot prosper.”
However, Bill’s recipe for success is beyond just sheer luck. Many times along his entrepreneurial quest, he faced situations that could have not just completely wiped him out financially but sunk him deep into debt had he not turned them around. These included dire situations like when his CFO absconded with the company funds, sparking a confidence crisis among his lenders; or when he was scammed into paying US$500,000 which he scraped and borrowed for the land rights to a bungalow-style hotel in Pattaya in the 1970s that did not exist. However, the latter led him to a fateful meeting with a senior advisor to the Thai monarch in the King’s Private Property Office, which opened doors to a lasting friendship and myriad business opportunities.
Without a doubt, Bill has worked hard. He believes that someone who puts in 16-hour work days would get to where he wants to go twice as fast as someone who only clocks eight.
All About Family
In his darkest moments of financial ruin and depression, Bill credits his wife of 49 years, Kathleen Ann Worthen, for being a pillar of strength and to his two sons, David and John.
His older son, John, 45, is the COO of the company’s hot food line while the younger son David is involved in the social programmes and the family office.
Despite this, the company is not partial to nepotism, as Bill explains, “The public company has won many awards for good governance. This demonstrates that we are not a family business. Even though our family has a large share in the company, it does not control it. Succession planning for me means that my place will go to the most qualified person and that might not necessarily be a Heinecke.”
Bill’s 45 year older son, John (R) is the COO of the company’s hot food line, while his younger son David (L) is involved in the company’s social programmes and the family office.
While MINT does not celebrate birthdays, it does have a Founder’s Day. On 4 June every year, Bill celebrates his birthday by giving each of his 50,000 employees a day off to do charity work.
“That would be the best gift that they can give me,” says Bill, who has implemented the practice across the Maldives, Middle East and Africa. Some employees donate blood while some donate money. Others spend a day with children from orphanages, or help paint and build schools.
Summing up his charitable philosophy, Bill says, “I think the best and most sustainable programme is when people can get passionate about something. It is no good to simply dictate social responsibility. We need to find something that appeals to the people. We have realized that when we recruit people, they want to know what the company is doing for both society and the world at large.”
This article was first printed in MillionaireAsia Issue 45 - Aug 2017