Flight Centre reveals grand plans for hotel management
Travel giant Flight Centre is expanding into hotel management, hotel leasing and ownership to help satisfy the 11 million hotel room nights it buys locally and internationally each year.
“We are putting some (hotel) product into the market where we can control the consumer’s experience,” says Flight Centre global hotel network general manager Kent Davidson.
The Gold Coast-based Davidson says Flight Centre is already managing hotels and resorts in Southeast Asia and is looking to lease hotels on 10-year-plus terms in Sydney and Melbourne, adding that hotel ownership would also be considered by Flight Centre down the track.
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The former high-ranking Peppers and Mantra executive says the first step is to manage hotels, with Flight Centre recently buying small Bangkok-based hotel management company BHMA, which has 20 hotels under management in Thailand, Vietnam and the Indonesian island of Bali. The acquisition, concluded in August last year, has given the BHMA control over several brands including the 4-4.5-star Away Resorts & Villas.
Davidson says the next step up from hotel management will be hotel leasing. He says he has looked at leasing hotels in Sydney, for example, because the city experiences heavy demand for rooms at certain times.
“We will lease anywhere where we have heavy demand,” he says
“We are very interested in leasing hotels in certain locations like Bali, Fiji and the Maldives.”
Flight Centre has looked at opportunities in Sydney, where Davidson says there is heavy enough demand for hotel rooms and constraints on the amount of product available.
“The idea is if we can undertake a lease in this destination we can underpin that lease and mitigate the risk associated with the lease by having our own Flight Centre sales and distribution businesses selling into it,” he says.
Davidson says Flight Centre’s hotel business, like the rest of the travel agent’s business operations, must stand on its own two feet: “We need owners to want us to manage their assets for them and we need that value proposition first and then we can put our travel business in behind it.
“Buying down the track is an aspiration, but obviously Flight Centre is a capital-light business. It has owned buildings in the past and divested. It’s something we would like to do and it’s a matter of providing an appropriate vehicle for that.”
This article originally appeared on www.theaustralian.com.au/property.
