Mantra hotels on expansion path
Hotel owner and operator Mantra Group is rapidly expanding its portfolio to take advantage of the improving tourism sector and new hotel/apartment offerings.
Over the past year since its listing, the group has added 11 new hotels, some they own fully, partially or just as the manager. The properties range across the Peppers, Mantra and BreakFree brands.
Mantra's chief executive Bob East said the potential to expand the assets was strong underpinned by Mantra's flexible ownership and development model.
This was further enhanced by the deal in July to buy four properties from Outrigger, Breakfree on Collins in Melbourne and the rebranding of the Soul, Surfers Paradise into a Peppers.
Mantra's hotel and apartment concept is also increasing in popularity with investors able to buy a "key" or room under a normal residential strata plan and either live there or rent it back to the hotel.
One of its largest is in Melbourne, where a prototype room has been completed for the waterfront's first five-star hotel, Peppers Docklands Melbourne.
The prototype hotel room is the first glimpse of what future guests can expect at the M Docklands project undertaken by Capital Alliance Investment Group, which is on track to open early 2016.
The $140 million, 19-level development will feature a Peppers Docklands hotel operated by Mantra with 87 hotel suites; 186 residential apartments and 11 retail shops.
"Melbourne is a very strong market with its arts and sporting events and also for our food and beverage offerings. People like to travel and treat themselves with a nice meal," Mr East said.
In its maiden year as a public company, Mantra achieved earnings above that forecast in its prospectus for IPO, with net profit at $36.2 million, which was at the top end of the updated guidance range announced in May this year.
The new properties helped the group deliver total revenue of $498.8 million, a rise of 9.7 per cent on the previous year.
In line with the prospectus on IPO, a final dividend of 5¢ was declared, taking the annual payment to 10¢ for the 2015 year. It will be paid on August 31.
The revenue per available room rose 1.4 per cent to an average $148 per room for the city-based hotels and 5.9 per cent to an average $105 per room for the resorts.
"We are always looking for properties that can offer a different mix to our guests," Mr East said.
"There are opportunities to keep expanding, whether we buy and develop the assets, part own them or manage them. We see the coming year as very strong for tourism and we will look to expand into a range of regions."
Mantra operates across Australia, New Zealand, Bali.
"The low Australian dollar and being geographically fortunate, is expected to see more inbound tourists to the country and also more people holidaying at home," Mr East said.
This was borne out by the Deloitte's latest Tourism and Hotel Market Outlook which covers the first half of 2015.
It says the tourism dashboard has lit up with signs Australians are rekindling their love affair with local holiday destinations.
Much of the shift is owed to the 25 per cent improvement in relative prices as a result of the Australian dollar's depreciation over the past year.
Lachlan Smirl, Deloitte Access Economics partner, said after a decade growing at an average rate of 11 per cent a year, growth in outbound holiday travel by Australians has ground to a halt. In fact, the number of Australians holidaying abroad fell marginally over the year to June.
Sydney, with the highest hotel occupancy, saw room rate growth of 3 per cent, while rates in Melbourne grew 3.5 per cent for the year to June.
Source: The Sydney Morning Herald, Carolyn Cummins, 27th August 2015
Originally published as: Mantra hotels on expansion path
