REGIONAL REPORT
A junior suite at Ovolo 1888 Darling Harbour .
TFE Hotels ). Currently , Mantra has eight projects and 1,160 rooms in the pipeline . “ With some of the Asian investors , there ’ s a lot of family money coming into this market , and often what doesn ’ t work for institutional investors may indeed be something that a family fund will entertain if there ’ s other motivation for the development ,” East continues .
That family money may well end up grabbing up Mantra . At the end of March , speculation surfaced that the Australian company was being targeted for a potential takeover by either an Asian party or InterContinental Hotel Group . Mantra wouldn ’ t comment on the rumor , calling it “ utterly fabricated .”
While East says he still sees plenty of opportunity in the country ’ s upper luxury market , he points to a real need in the
WE HAVE A BURGEONING ASIAN VISITATION IN AUSTRALIA , AND A LOT OF THIS IS MORE SUITED TO THAT MID-MARKET HOTEL .
— BOB EAST
middle sector , partly as a result of that influx of tourism .
“ We have a burgeoning Asian visitation in Australia , and a lot of this is more suited to that mid-market hotel – that is where there ’ s an absolute strain in that sector , particularly in Sydney and Melbourne ,” East says . “ We think that ’ s probably the greatest potential for hoteliers such as ourselves .”
SYDNEY ON FIRE Both Sydney and
Melbourne are trading at levels not seen before , as solid tourist numbers continue to boost occupancy and RevPAR . In development , Sydney dominates with 19 projects and 3,567 rooms in its pipeline – which equates to some A $ 2.3 billion worth of hotel projects already approved and a further A $ 1.9 billion ( US $ 1 billion ) of projects
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JS : I ’ m quite heavily invested in the Hunter region , which is north of Sydney in Newcastle and the Hunter Valley . I ’ ve got three hotels there which I ’ m developing and I put my brewery there . I ’ m also setting up a seaplane service to run between Sydney Harbour and the Hunter region .
H : How big do you see your portfolio getting , and what are your plans for divestiture ?
JS : My wife keeps telling me I ’ ve got enough hotels ; I don ’ t need any more ( laughs ). I keep telling her that ’ s just in my blood and as my hotels make money I generally put the money back into the business . I ’ m generally an acquirer for two main reasons : The first is because I put a lot of effort into each asset that I purchase and it ’ s always sad to see it go ; and the second reason is the disincentive of the Australian government to sell things once they have improved in value because we have capital gains tax .
H : Your family was your point-ofentry into the hotel industry …
JS : My father started with hotels and then when he died , my mother and I increased the size of the portfolio and improved our hotels . When she died , which was 12 years ago , I continued it myself . So hopefully my children will also embrace the idea .
H : What attracts you to the business and what made you want to expand ?
JS : Because it ’ s a fantastic type of business . Hotels encompass so many different things . It ’ s tourism , dealing with people , making rooms which people spend the night in , giving them technology , doing the bars up , giving people an experience , working with staff , working with IT . There ’ s so many different facets in hotels and it ’ s a really exciting business .
28 hotelsmag . com May 2017