QUEENSLAND-BASED Oaks Hotels and Resorts has expanded its portfolio in Western Australia with the acquisition of a second property in Broome, naming the Kimberley location as one of its investment ‘hot spots’.
Oaks bought Grand Mercure Apartments Cable Beach late last year, with the 155-apartment style accommodation to be rebranded Oaks Cable Beach Resort when it reopens in early February.
The first property, Oaks Broome, was established two years ago. Oaks Hotels and Resorts director Brett Pointon told WA Business News acquiring a second property in the popular tourism destination fitted well into the business’s strategy.
“We are looking at locations right throughout Australia that we believe have a future. We identified Broome a while back as one of those locations,” Mr Pointon said.
Perth and Karratha are also on Oaks’ radar; Mr Pointon is keen to establish a presence in the state’s capital but said it was a matter of waiting for the right property to become available.
“Anywhere where the mining sector is, we have a real interest in. We like Perth because that seems to be the centre. It is tough to get accommodation in Perth, so we are just going to have to work a little bit harder,” Mr Pointon said.
“Ideally we would love a strata-title property because that is what we do, but basically we just need a property that earns good money so that we can earn good money in. It is all about financial gain.”
Oaks’ strata title model has attracted close to 5,000 owner-investors across its properties nationwide including Brisbane, Sydney, Melbourne, Adelaide and regional locations such as Port Douglas and Mackay in Queensland.
The business was bought by Bangkok-based hotels group Minor International 12 months ago and the acquisition has allowed for greater access to capital, allowing for an aggressive growth strategy, although Mr Pointon said the property had to be right for Oaks to take it on.
“We report to individual owners, mums and dads, every month. When you are dealing with strata title you have to find locations where you can give an owner return very, very quickly,” he said.
“Lots of hotel groups are about their offering, their brand, their ego and whatever it is, they hope the owner earns some money at some particular time. Ours doesn’t go that way. We have a look at the property, figure out how to get the owner the best possible return and build an operational model around that.
“We have to perform from day one, that is the fundamental difference.”
Tourism is an obvious drawcard for visitors to Broome and Mr Pointon is confident the leisure market will continue on its positive trajectory; but the resource-focused corporate clientele using Broome as a base for site access is an equally important market for Oaks.
As far as a third property in Broome is concerned, Mr Pointon said the focus for the moment was on quickly establishing the company’s management model into Oaks Cable Beach Resort alongside distribution channels, networks and positioning the product at the right price in order to deliver owner returns.
“If this property establishes itself and we find there is a greater demand for accommodation than what we have then we will look at a third, but at this particular point in time my priority is to make sure the first property is going exceptionally well, which it is, and the second property is built up to go exceptionally well as well,” he said.