Big investors ready Byron Bay for next tourism wave

The 55-acre Sun Ranch coastal estate in Byron Bay is on the market.

Private equity firm KKR has backed new leisure concept Drifter on the acquisition of its first local property in the famed coastal destination of Byron Bay, where the chain plans to open mid-year and provide guests with a blend of traditional hotel and hostel experiences.

The one-time countercultural capital is now attracting heavyweight investors keen to provide holiday experiences on par with the mansions that populate the area and draw a celebrity crowd.

The group quietly picked up the Vali Byron Bay for about $27m and will remodel it before opening in June. This will add to Drifter’s planned property in a heritage-style building in Christchurch, New Zealand, where two more sites are in the wings.

The hotel was sold by Scott Didier, the founder and chief executive of the listed Johns Lyng Group, via JLL Hotels & Hospitality. Mr Didier had acquired Vali in 2021 and then undertook major renovations.

Drifter is billed as a new design-led hybrid hotel brand which aims to offer a fresh approach to accommodating free-spirited travellers, with an emphasis on having shared social experiences.

Drifter will have 52 rooms ranging from superior private suites to premium shared bunk rooms, as well as work spaces, bars, dining areas, wellbeing studios, and performances from local and international artists and musicians. Drifter co-founder Joshua Hunt believes the idea will be embraced.

“With Drifter, we want to create experience-based precincts that appeal to all types of travellers from across the globe. Drifters have the vibrancy and energy of a shared accommodation venue combined with the curation of music, art, food, drinks, and culture most often seen in boutique hotel offerings,” he said.

The high-powered Leisure Accommodation Collective is behind Drifter’s roll out of experience-based venues. It is led by hotelier Luke Moran, as chief executive, and chaired by former Tourism Australia chair Bob East.

Other properties are also now in play in Byron Bay, with the well-known Sun Ranch, a 55-acre coastal oasis, formally hitting the market. Designed by Jamie Blakey and Julia Ashwood, with the backing of a private consortium, it has shot prominence since opening last September, with its unconventional luxury styling winning a strong following.

Sun Ranch has a five-room luxury guesthouse, two pools, double badminton courts, private creek frontage, and wellness retreat complete with a wood-fired sauna and ice bath.

The property can house 34 people across The Rambler Longhouse and two-bedroom Sun Ranch Barns, and aims to provide unique luxury experiences.

The up-market estate believes that its business model could be expanded along the lines of famed establishments such as Soho House, Ace Hotel, The Standard, The Proper, and even Aman.

Sales agent, HTL Property managing director Andrew Jolliffe says the property has the best of the Byron Bay lifestyle.

Other big names are already in the area with Merivale’s Justin Hemmes owning backpacker bar Cheeky Monkeys premises and a pub fund run by MA Financial owning Byron Bay’s Beach Hotel.