ASPIRING MILLIONAIRES DRIVING HOTEL MARKET

ASPIRING MILLIONAIRES DRIVING HOTEL MARKET

MANTRA Group is revelling in the growth of the hotel market, and it credits aspiring millionaires from Asia for placing Australia in an enviable market position.

"It is worth noting that Australian hotel operators are well placed to experience the greatest opportunity that we have ever experienced," Mantra CEO Bob East told shareholders at the company's annual general meeting.

"Australia holds the enviable position of being the number-one destination to visit for aspiring high net worth individuals and the proximity of the Asian market to Australia supports the increase in demand into the Australian accommodation sector."

East's optimism is buoyed by the latest tourism statistics showing international arrivals to Australia rose 6.9 per cent to 7.23 million in FY15, while overnight trips lifted 5 per cent to 83.2 million.

He says supply has failed to keep pace with this growth at just 3 per cent, based on the existing development pipeline nationally.

East says Asia will account for 46 per cent of international visitors to Australia by 2033, up from 28 per cent in 2003 and this will be overwhelmingly led by the Chinese market.

Mantra capped off a solid FY15 with a 9.7 per cent increase in revenue to $498.8 million and a maiden net profit as a listed company of $36.5 million, both above prospectus forecasts.

Acquisitions and improved market conditions led to a 19.2 per cent increase in the company's underlying profit after posting EBITDAI of $73.1 million.

Australia's second-largest accommodation provider says it is on track to lift that figure by at least 15 per cent in FY16 with forecast EBITDAI of between $84 million and $87 million.

The Gold Coast-based Mantra Group has 126 properties in Australia, New Zealand and Asia, and another seven are to be added in both FY16 and FY17. This follows the acquisition of 11 properties in FY15.

East says further acquisitions are planned, including another major holding on the Gold Coast where it has been highly active over the past year. He says the Gold Coast acquisitions, namely Outrigger, Soul and Chevron Renaissance, have exceeded targets, as have the Adelaide Waymouth and M on Mary (Brisbane) acquisitions.

Mantra has added 2800 rooms in FY16 to date, boosting its total portfolio to more than 18,000 rooms under the Peppers, Mantra and BreakFree brands.

"Our three-brand approach continues to deliver good results for our properties," says East. "We have strengthened all three brands by the addition of larger and well located properties."

In recent years, Mantra has lifted its presence in the CBD market and it has reiterated its desire for a bigger share of the profitable sector.

"Our Peppers CBD strategy is well under way and we expect over time to have a Peppers CBD property in every state capital," says East.

"The Mantra brand has gained the most traction in market and is likely to continue to be our largest growing brand."

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