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Tue 21 Feb 2017 03:39 PM

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Anantara brings a little bit of Thailand to the GCC

Chairman and CEO explains why the region is so enticing

Anantara brings a little bit of Thailand to the GCC
Heinecke says Minor International remains committed to its five-year strategy.

What is your outlook for the GCC hospitality sector? What new locations are you eyeing, for which brands, and why?

Outside of Southeast Asia, the GCC remains our main area of strategic focus. Where feasible, we are looking to create synergies with our existing portfolio as well as entering new markets and bringing in new brands.

We are building upon our clustering concept and strengthening our portfolio in destinations where we already have a presence. For example, in Abu Dhabi, where we are already managing five resorts under the Anantara brand, we are developing a cluster of two resorts along the coastal area of the Al Gharbia region, close to the ferry departure point for Sir Bani Yas Island, where we already have three resorts. This new cluster will operate under two of our brands: AVANI Jebel Dhanna Hotel and Anantara Jebel Dhanna Villas. Both are scheduled to open in 2019 — in the same location but catering to different market segments in terms of facilities, design and rates.

In terms of our pipeline for Anantara in the region, Anantara Dubai Creek Hotel is under development and will open in 2018, while Anantara Mina Al Arab Ras Al Khaimah Resort will be Minor Hotel’s first property in the emirate of Ras Al Khaimah when it opens in 2019. Also scheduled to open in 2019 are our first resorts in Bahrain, Anantara Durrat Al Bahrain Resort, and Saudi Arabia, Anantara Jeddah Resort.

This is on top of our two openings in Oman last year: Anantara Al Jabal Al Akhdar, the highest five-star luxury resort in the region, set 2,000 metres above sea level; and Al Baleed Resort Salalah by Anantara, which offers the first pool villas in the area.

You recently opened not one but two hotels in Oman — a country that prior to Anantara had only a couple of five-star resorts. What was so appealing about the country?

Oman is known worldwide for its spectacular natural beauty, rich cultural heritage and heart-felt hospitality and, as such, it has been on our horizon for many years. It has maintained a strong sense of identity, celebrating its rich heritage and staying true to its Bedouin values, whilst having a progressive outlook. At Anantara we are passionate about connecting guests to the world’s most exciting locations, people and stories through personal, indigenous experiences, so Oman is a natural home for us.

Anantara has typically chosen locations where there are few other resorts (for example, Liwa Desert, Abu Dhabi and Jabal Al Akhdar, Oman). What is the business case behind that?

The strategy behind this is twofold.

We know our guests and we know they are always keen to explore new territory; we offer them a window into each destination. This is at the very core of Anantara as a brand — it is all about connecting modern travellers to each place by offering indigenous experiences and a high level of expertise. We are extremely passionate about opening up new destinations and we spend a lot of time getting to know the local culture when we are designing our resorts — again, this part of the fabric of the brand. For example, in Oman, the rich heritage, fascinating culture and natural splendour of each destination have inspired every aspect of both of our new resorts.

From a business perspective, over 16 years ago we saw a gap in the market for resorts in exotic destinations offering authentic experiences and we seized the opportunity.

Located at Saiq Plateau in Oman, Al Jabal Al Akhdar is the highest five-star resort in the Middle East.

On top of offering guests more choice and catering to their thirst for new destinations, having a portfolio of Anantara hotels and resorts in diverse locations spreads risk and plays a crucial role in producing sustainable earnings growth for our shareholders.

Our efforts in building the Anantara portfolio across multiple regions have given us competitive advantages.

Why is diversity so important in your strategy?

Since the day I set up my own business I have always believed in having a diverse portfolio of investments. From our humble beginnings in Pattaya in 1978 and the first Anantara which opened in Hua Hin in 1991, I am proud to say that Minor Hotels is now one of the fastest growing hospitality owners and operators in the world.

At the beginning, having our own brand — Anantara — as well as managing hotels under international brands, meant that we could grow quickly with the support of investment partners, bringing our management and design expertise to the table and opening up new destinations.

We now focus on both hotel investment and hotel management contract businesses. Whilst management contracts yield higher profitability, they produce less income than owned hotels as we only receive management fees. Therefore, we still need to focus on hotel investments in order to achieve the level of growth we are aiming for.

We focus on what we call an ‘asset right’ strategy, expanding our hotel business through a combination of an ‘asset heavy’ model with our owned hotels and an ‘asset light model’ via management contracts to drive a growth in earnings as well as profitability.

Anantara Al Jabal Al Akhdar is one of two hotels Minor International operates in Oman.

Over the past decade we have deliberately and strategically developed a multi-brand portfolio to appeal to different segments of travellers. Our portfolio of brands includes PER AQUUM Hotels & Resorts, our ultra-luxury boutique brand which we bought a 50 percent stake in three years ago; Anantara, our home-grown luxury brand for modern travellers; AVANI which we established in 2011 and is now one of our fastest growing brands; The Elewana Collection — luxury safari camps, lodges and boutique hotels in Kenya and Tanzania; the European brand, Tivoli Hotels & Resorts, which we acquired in full, earlier this year; through to Oaks Hotels & Resorts, which offers good value serviced apartments in strategic locations worldwide.

Having a multi-brand portfolio plays a crucial role in producing sustainable earnings growth for our shareholders and our efforts in building each brand have given us competitive advantages, which help fend off competition.

On top of this, our diversification strategy in terms of our guest profile and geographic reach provides a solid foundation and ensures we stay resilient in challenging times.

In terms of future growth overall, Minor Hotels is targeting a portfolio of 250 properties within the next five years. We have ambitious plans to further expand Minor’s existing brands and to explore strategic acquisitions with strong joint-venture partners.

What is the intention behind the new The Residences by Anantara brand?

Branded residences are popular because buyers are buying a lifestyle they are familiar with — and with a brand they trust. Family time is the most important thing to the ultra-wealthy when they holiday these days.

I kept this dynamic in mind when designing The Residences by Anantara — a project I oversaw personally. From a lifestyle investment perspective, The Residences could provide a financial return partly because the location is so rare — a private estate of 15 luxurious villas set on a hillside overlooking the stunning Sirinat National Park and Phuket’s secluded west coast.

There has been a lot of interest in our stunning residential properties at Anantara Layan in Phuket from the Middle East market, actually — one of The Residences has already been acquired by an investor from the region.

Why are you expanding beyond Southeast Asia?

We are expanding our business rapidly outside of the Southeast Asia region so that we are not dependent on any particular area.

In 2008, Minor earned only 13 percent of its revenue outside Thailand; by 2015 the figure was 29 percent, and today we operate 156 hotels across 24 countries. By 2020 my goal is for at least 50 percent of sales to originate from outside of Thailand. Outside of Southeast Asia, the GCC remains our main area of strategic focus and we will continue to explore opportunities to grow our portfolio across the region. With nine resorts in the pipeline across the GCC as well as imminent announcements about new brands entering new markets, the Middle East is vital to the growth plans for Minor Hotels. Our annual results for 2016 have not been published yet but I can tell you that in 2017 approximately 25 percent of our revenue for Minor Hotels is forecast to come from our properties in the Middle East.

Testament to the importance of the GCC from a revenue perspective, we are currently building a regional hub and decentralising the corporate team from our headquarters in Bangkok, including business development and sales and marketing functions. In fact, we just created a new position — vice president of development for Europe, Middle East and Africa — based in Dubai.

Meanwhile, our source markets vary from destination to destination; this helps spread risk given the volatility of the travel and tourism industry and economy these days as well as giving our loyal guests more choice.

The Middle East, particularly the UAE, is one of our top source markets worldwide — both in terms of outbound travellers and guests staying at our hotels within the region.

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