The tourism industry says an influx of wealthy investors is creating more confidence among smaller players, despite a number of resorts having collapsed over the past 12 months.
Trucking magnate Lindsay Fox has revealed to the Australian Financial Review that he has been approached to invest in the industry, and would consider it if the Government were willing to provide more support. Fellow billionaires Clive Palmer and James Packer have also put money into the tourism market over the past year.
Tourism and Transport Forum chief executive John Lee told SmartCompany this morning the increased activity is great for confidence.
“The good thing is this is not just a personality or ego-driven investment of the rich and famous, but people who have made an assessment on what sectors to be operating in.”
“It does increase confidence, and people look for leaders in their industry to start investing. Then others follow and then it creates a chain reaction.”
Fox said he had been approached to buy the former Club Med resort on Lindeman Island, with the managers of the sale process having received about 200 offers. Fox declined, although said if he were to invest it would require government support.
“Tourism is a very tough business. You would want, strategically, a tremendous amount of government support.”
But there have been sales. Mining magnate Palmer bought the Hyatt Regency Coolum on the Sunshine Coast last year, but Palmer’s relationship with Hyatt has soured and is now in the courts. He has purchased two other golf courses as well.
Linc Energy founder and managing director Peter Bond purchased Dunk Island resort in December but has been tight-lipped about its future, with some reports suggesting a small-scale eco-friendly resort development.
But it has been a horrid year in tourism, with several Queensland resorts collapsing. While the high dollar is hurting the industry, Lee says these investors are taking a long-term outlook, which is boosting confidence among smaller players.
“This is a two-speed economy and we feel that in tourism many of the major cities are doing well. The yields from rooms are growing and some are experiencing double digit growth.”
He says regional areas remained a challenge: “We’ve seen several resorts close, and the short-term outlook isn’t clear.”
Lee says cheap prices for integrated resorts had spurred the recent interest.
“For these resorts, it makes sense to be in these places right now. Others are watching what’s happening, and that’s going to encourage them to be in on the industry as well.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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