Staywell founder aiming for 100 hotels
Simon Wan says Staywell Hospitality Group has ‘one of the largest overseas footprints of any Australian hotelier ... something we are very proud of’
FROM nondescript offices in Clarence Street, Sydney, Simon Wan is juggling a string of international deals — even though his Staywell Hospitality Group does not yet have a hotel presence in every Australian capital.
Mr Wan has just negotiated joint ventures in China, Britain and India in his bid to build the homegrown Staywell Hospitality Group, which he launched seven years ago after selling global hotelier THL for more than $200 million to the since-failed MFS group.
The Hong Kong-born entrepreneur’s ambitious plans for Staywell Group — which controls the Park Regis and Leisure Inn chains — is to build a network of 100 hotels by 2016.
So far Mr Wan, chief executive and shareholder of Staywell, has amassed 34 hotels in Australia, Indonesia, New Zealand and Singapore — either buying their bricks and mortar or by striking a management agreement with their owners.
“We have one of the largest overseas footprints of any Australian hotelier. This is something we are very proud of,” said Mr Wan, who has been an Australian citizen since 1986.
He values the Staywell business, which he has built up with his two partners, former Baker & McKenzie partner Richard Doyle and businessman Bal Sohal, at between $350m and $450m.
But he is not stopping there.
In Britain, Staywell is developing a £65 million ($117m) hotel in London and an £85m hotel in Birmingham with local partner, the London-based Seven Capital. Both will be managed under the four-star Park Regis brand.
In China, Mr Wan has just signed a heads of agreement with a state-owned enterprise that has more than 40 hotels and is hoping to form a global alliance. In the United Arab Emirates, he has a heads of agreement with a company that owns 13 hotels in the Middle East to develop more in that region. In May, he struck a joint venture management agreement with South African hotelier Mantis Collection, which has 60 properties. It will see the Park Regis and Leisure Inn brands introduced to sub-Saharan Africa.
In India, Mr Wan is developing two hotels in Jaipur and New Delhi with a local group. Another four are planned.
“The reason they (local companies) are forming joint ventures with us is because they appreciate our weight of management, our systems, our intellectual property, our service standard, they still think we are more sophisticated than them in this area,” Mr Wan said.
But Mr Wan, who owns the Park Regis City Centre in Sydney, the Park Regis in North Quay Brisbane, and the soon to open Park Regis Southbank in Melbourne, admitted he had big gaps in the Australian market.
As such, Staywell is negotiating a management contract for a $65m hotel in Adelaide’s Chinatown as well as a deal to develop a 262-room hotel in Perth worth $80m. Mr Wan is hoping to sign a management contract on a $35m, 80-unit apartment hotel in Surry Hills in Sydney and has a Chinese partner in to build a $48m hotel in Mackay, Queensland.
“We have these live deals in Australia, (but) if you look at our footprint we obviously need to bulk up in Darwin and Perth … and we need to go to Canberra which is a boring market but we need to be there,” Mr Wan, who was part of the management team when French hotel giant Accor listed in 1992, said.
“We are looking at strategic cities that would complete our Australian capital city network for better representation and customer referral. ”
He is keen on developing in Sydney, although he won’t touch the two sandstone heritage buildings the NSW government is attempting to sell to a hotelier, judging the resultant hotel conversions as too up-market. But he wants to develop.
“If a city like Sydney is running at an 85 per cent occupancy for 10 years, that’s not rocket science — there is room for more hotels. The climate has changed, there’s a lack of new hotel supply, banks are willing to support development funding.”
Mr Wan said it was easy to juggle multiple deals because debt was more freely available. “We spread our capital thinly. Each country we go to we try to come up with a different funding model, we like a local partner.
“But the biggest challenge for me is to balance my lifestyle and my balance sheet. The more I grow, the more money I need.”
So what is the exit strategy?
At 57, Wan says there are three ways out: a management buy out of Staywell; a float; or a trade sale to another hotel operator like Mantra or Accor.
Source: The Australian - 23 June 14
