Australian motels are having a moment right now as savvy buyers cash in on opportunity

Like so many other mid-century marvels, motels are having a moment right now. The commercial real estate equivalent of the vinyl record or Kombi van, motels are experiencing a renaissance of sorts as modern-day tourists embrace a retro way of travel.

After peaking in popularity during the 1960s and 1970s, motels fell out of favour by the time the nineties and noughties offered tourists resorts, cheap international travel and Airbnb.

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The Sails Motel in Brunswick Heads has been revived with plenty of retro flair thanks to owners Simon Johnson and Amanda Newman. Picture: Jenna Agius for Joe Sun

However in these post-pandemic times, the modest motel is ticking plenty of boxes for holiday-makers.

So, for buyers seeking a live-in business opportunity, a DIY project and an escape to the country all rolled into one, a motel could be right on the money.

Pop culture has even embraced them with Netflix’s Motel Makeover, a series where two 20-somethings revamp their second motel amid a global pandemic.

The Sails Motel that Simon Johnson and Amanda Newman bought. Picture: Jenna Agius for Joe Sun

Then there is the cult series Schitts Creek where The Rosebud Motel is as much a character as the celebrated cast.

Business is booming for Australia’s masterfully revived motels as some ask in excess of $600 a night during peak periods while gathering a load of Instagram fame along the way.

Six years ago, Simon Johnson and Amanda Newman left Sydney and jumped headfirst into motel ownership. Their property, The Sails Motel in Brunswick Heads, is a transformed 22-room mid-century motel with an on-site restaurant and pool club.

“For a while we looked for a property with all the right attributes, and this was the one. It had a bit of space and a good freestanding house we could renovate and incorporate into the business,” Mr Johnson said.

“Plus there was a pool bar area, a retail space at the front and an existing licensed restaurant,” adding that the mid-century building had “some really good bones”.

“The rooms were totally underwhelming but we could see it would be fairly easy to refurbish them to the original style of the motel. Overall, it was such a cool old design,” he said.

The motel has a luxurious Palm Springs vibe. Picture: Jenna Agius for Joe Sun

If a potential buyer was hesitating about getting into tourism in the wake of Covid, Mr Johnson said he believed their small scale operation and a hot location meant the business had been relatively pandemic-proof.

“Interestingly, we discovered the layout was quite Covid-friendly,” he said.

“There are no closed corridors or lifts and people can drive right up to their front door without using any shared areas.

“It meant we could do contactless check ins and everything was quite private and Covid compliant,” he explained.

“Even though international travel is slowly coming back, I don’t think there’ll be a cooling-off period for domestic travel for another couple of years. People have found there’s so much fun to be had in their own backyard.”

Buying a motel business, especially a run down property, has the potential to be an emotional and financial challenge, but Mr Johnson said baby steps can really pay off.

“When we got into this property by the financial skin of our knuckles it was a blessing in disguise that we didn’t have the immediate capital to get stuck into renovations,” he said.

“Looking back, we needed to spend some time here running it so we could have a more sympathetic approach to the motel.”

For budding buyers who want to take a leave out of Simon and Amanda’s book — there are a few possible properties on the market right now that could help you live out your tree-change DIY dream.

Mermaid Beach, Queensland

Price guide: On application

This old school motel on the Gold Coast is in the heart of holiday territory. Picture: Supplied

Right now it’s a well-presented 3-star motel operating at Classic Motel with a three-year lease in place, but this traditional motel on the Gold Coast has all the ingredients to revive the premises into a retro charmer. It currently earns $109,000 a year (net) according to marketing and is conveniently located on the upcoming light rail line and is just minutes to the beach, Star Casino and Pacific Fair.

Biloela, Queensland

Price guide: $3 million (FHGC)

Complete with neon palm tree sign, this Queenslander already had mid century vibes. Picture: Supplied

Rocking a classic California mid century vibe – and a totally Instagramable palm tree neon sign – this 25-room motel on 4037sq m has the quintessential pool and is close to the local town centre and is 120kms inland from Gladstone. According to the marketing material, there would be an attractive 16.3 per cent return on investment.

Wellington, NSW

Price guide: $2.8 million

On the Macquarie River, Motel Mandalay is a Wellington landmark. Picture: Supplied

Sitting just 200m from the Macquarie River, Motel Mandalay is a Wellington landmark and right on the thoroughfare for travellers making their way from Sydney to Orange, Bathurst or Dubbo (and back again). The two-storey establishment has 23 rooms, a dining room, commercial kitchen and a three-bedroom caretaker’s brick cottage.

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Corio, Victoria

Price guide: On application

Looking for a place to crash between Melbourne and Geelong? The Corio Bay Motel is the first one you’ll find along the way. Picture: Supplied

The Corio Bay Motel holds the title of the first motel you’ll come across when travelling between Melbourne and Geelong as well as the closest motel to Avalon Airport. With 25 rooms, the period property also features a two-bedroom manager’s residence, dining room and plenty of parking. It’s currently earning $153,415 a year under a five-year lease which commenced in 2018 so there’s time to consider your next move before bringing the tool belt.

Ingham, Queensland

Price guide: $1.775 million

Although this 19-room motel has been recently renovated, but there's scope for a buyer with vision to give it some mid-century magic. Picture: Supplied

Home to 19 rooms, this classic Queensland motel has been recently renovated, but has scope for a buyer with vision to give it a little period pizzazz. It comes complete with a barbecue area for guests and is within walking distance of major shops. Marketing material suggests a $322,200 net profit for the year ahead with plenty of repeat business.

Tumby Bay, South Australia

Price guide: $560,000 to $580,000

A pint-sized inn on the popular Eyre Peninsula in South Australia. Picture: Supplied

Located in one of the coastal holiday hot spots on the Eyre Peninsula, this pint-sized motel could be in ideal starter property offered as a walk-in walkout freehold opportunity. The Tumby Bay Marina Motel has 11 units, a breakfast room, on-site swimming pool and guest barbecue area, plus a two-bedroom manager’s quarters.