The Hotel Industry is an innovative and dynamic industry that has enjoyed solid trading conditions in Australia’s major east coast cities over the past 2 to 3 years, and from our observations, and discussions with clients, those conditions look set to continue for the foreseeable future.

Of late there have been limited hotels offered for sale, and anything that does come to market is quickly acquired and consolidated by long-established hotel groups. A good example of this is the recent joint venture between Australian Venue Company and Coles, which kicked off further expansion plans with the purchase of Open Arms Hospitality’s Brisbane hot-spot, Riverland. And in Sydney, Iris Capital’s acquisition of the iconic Steyne Hotel for a record price.

This has led to the continued compression (lowering) of yields that sees hotel prices continue to grow. At the same time banks have been tightening their credit policies and taking a cautious approach.

With this in mind, now more than ever it is critical that operators in the industry have a good handle on the key metrics of their business and, in-particular, an understanding of how the banks view these metrics – to ensure that funding remains available to you, and with optimal pricing, conditions and structure in place.

If you would like to discuss anything that’s happening in the market then please contact Edwin Jan at Balanz on 0413 996 480 or Edwin.Jan@Balanz.com.au

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