GLOBAL UPDATE : PROFILE
‘ FLEXIBILITY ’ MANTRA
Australia ’ s Mantra Group grows its three brands mostly by eschewing traditional management models .
By Jeff Weinstein , editor in chief
Among the four newly signed Peppers hotels is the Cradle Mountain
Lodge in Tasmania .
Mantra Group , Surfers Paradise , Queensland , Australia , believes it has been successfully growing its portfolio because it has recognized the need to be more flexible in the way it structures deals . Currently , the 110-hotel company with some 15,000 rooms under management primarily in Australia and New Zealand has another 14 stylish Peppersbranded properties , 15 core Mantra hotels and resorts and three valuedriven BreakFree assets set to join its network over the next 12 months .
“ We consider all model types ( management agreements , earnings guarantees , leases , equity stakes , management letting rights ) and hybrids of these to achieve the most project-effective outcome rather than simply push the traditional management-agreement structures well known with hotel circles ,” says Michael Moret-Lalli , Mantra Group ’ s director of acquisitions . Taking it a step further , Moret- Lalli says Mantra Group also is willing to take an equity stake in completed developments . Currently , it owns and operates 75 % of its hotels , manages 20 % and franchises 5 %.
That refreshing approach for owners might have something to do with its recently announced 9 % year-over-year growth in EBITDA to reach A $ 60.6 million ( US $ 62.9 million ) for its range of self-contained apartments , luxury resorts and retreats . Room revenue increased 6.2 %, reflecting a 5.8 % jump in RevPAR across the group ’ s 22 CBD ( central business district ) properties and 5.2 % across more than 85 resorts . ADR grew 1.7 %. This news comes despite a move to cull eight BreakFree hotels to enforce brand standards and strengthen brand equity .
Mantra claims growth was buoyed via marketing through brand ambassador and local tennis legend Pat Rafter , renewed activity from the mining and resources sectors , resurgence in MICE business and an increasingly strong Chinese and Asian inbound market .
If there is a weakness in the Australian market , Moret-Lalli points to development / supply constraints , as well as shortfalls in infrastructure and demand-generating events .
The pipeline Peppers , which is evolving from a focus on boutique retreats to luxury resorts and city hotel offerings , has signed four new hotels in 2012 , including its first ski destination , the Peppers Rundells Alpine Lodge in Mount Hotham . Imminent are two CBD Peppers — one in Brisbane and another in the New Zealand capital of Wellington .
Furthermore , a new Peppers development will be announced this year in Bali , while a residential / leisure development is set to open next year on Fiji .
“ It is the combination of trust and aspirational accommodation experiences that make the Peppers brand ’ s move into the CBD market both obvious and seamless ,” Moret-Lalli says . “ We have the right mix of ‘ street cred ’ and market appeal , as well as functionality and profit generation .”
Peppers will grow in CBD locations via traditional management agreements and management letting right / strata hotel contracts , where apartments are acquired and returned to the letting pool . “ The strata hotel model is emerging as the next wave of supply in CBD locations due to a favorable feasibility equation , newer or larger stock and offering multiple exit options ,” Moret-Lalli says .
The Mantra brand has new projects in Bali , another in Port Moresby in Papua New Guinea to feed a burgeoning mining sector , as well as a leisure facility in Noumea , New Zealand .
In a tougher Australian market , Mantra Group plans to focus on refurbishments for the core brand . An initial A $ 20 million ( US $ 20.7 million ) investment has been completed with a similar infusion set to continue through 2013 .
14 HOTELS September 2012 www . hotelsmag . com