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Issue 276 | August 2019 | $13.75 inc. GST
The Monthly Magazine for Accommodation Industry Professionals
www.accomnews.com.au
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The legal stuff...
The views and images expressed in Resort News do not necessarily reflect the views of the publisher. The information contained in Resort News is intended to act as a guide only, the publisher, authors and editors expressly disclaim all liability for the results of action taken or not taken on the basis of information contained herein. We recommend professional advice is sought before making important business decisions.
Inside our August issue FRONT DESK Editor's Note: Selfish isn't a dirty word........................................................ 05
Advertising Conditions The publisher reserves the right to refuse to publish or to republish without any explanation for such action. The publisher, it’s employees and agents will endeavour to place and reproduce advertisements as requested but takes no responsibility for omission, delay, error in transmission, production deficiency, alteration of misplacement. The advertiser must notify the publisher of any errors as soon as they appear, otherwise the publisher accepts no responsibility for republishing such advertisements. If advertising copy does not arrive by the copy deadline the publisher reserves the right to repeat existing material.
Disclaimer Any mention of a product, service or supplier in editorial is not indicative of any endorsement by the author, editor or publisher. Although the publisher, editor and authors do all they can to ensure accuracy in all editorial content, readers are advised to fact check for themselves, any opinion or statement made by a reporter, editor, columnist, contributor, interviewee, supplier or any other entity involved before making judgements or decisions based on the materials contained herein. Resort News, its publisher, editor and staff, is not responsible for and does not accept liability for any damages, defamation or other consequences (including but not limited to revenue and/or profit loss) claimed to have occurred as the result of anything contained within this publication, to the extent permitted by law. Advertisers and Advertising Agents warrant to the publisher that any advertising material placed is in no way an infringement of any copyright or other right and does not breach confidence, is not defamatory, libellous or unlawful, does not slander title, does not contain anything obscene or indecent and does not infringe the Consumer Guarantees Act or other laws, regulations or statutes. Moreover, advertisers or advertising agents agree to indemnify the publisher and its’ agents against any claims, demands, proceedings, damages, costs including legal costs or other costs or expenses properly incurred, penalties, judgements, occasioned to the publisher in consequence of any breach of the above warranties. © 2019 Multimedia Pty Ltd. It is an infringement of copyright to reproduce in any way all or part of this publication without the written consent of the publisher.
INDUSTRY
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News In Brief............................................................................. 06 Person of Interest: Paul Shih................................................10 Q&A: Options, Variations & Top Ups ...............................12 ARAMA Report: Escalating fees are resident managers paying too much?.....................................................................14 State Report: Voting Rights and conflict of interest..............................15 SCA Report: Finding solutions, not defendants.....................................16 BCCM Report: Part 2 of 3 - Annual general meetings: Tips for best practice.............................................................. 17 MANAGEMENT Legal Ease: It stops at the border…....................................18 Thinking MR: I want value… but what do I actually want?....................19 Intonet: Selling to Millennials............................................. 20
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Still selling rooms? Sell the experience…....................... 22 White, white or white.............................................................. 23 Cashing in on the clicks........................................................24 The hidden costs of not having a facelift....................... 29 TOURISM Tourism Report......................................................................... 32 Tourism International............................................................ 34 The Last Resort: On a fast train to nowhere................. 35 EVENTS & APPOINTMENTS
PO Box 1080, Noosaville BC, Queensland, Australia 4566 Phone: (07) 5440 5322 Fax: (07) 5604 1680 mail@accomnews.com.au www.accomnews.com.au
EDITOR Trish Riley, editor@accomnews.com.au STAFF WRITERS Kate Jackson
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The Management Rights Formula: a unique how-to guide for success.................................. 36 Mid-year Christmas with a twist.........................................37 Star operators shine at ARAMA’s inaugural TOP Awards....................................... 36 Industry stalwart retires.........................................................41 DEVELOPMENTS:
DESIGN & PRODUCTION Richard McGill, production@accomnews.com.au
Development News................................................................ 42
ADVERTISING Stewart Shimmin, advertising@accomnews.com.au
PROPERTY
SUBSCRIPTIONS Gavin Bill, subscriptions@accomnews.com.au
Resort News Agent Profile: Jenny Zheng, Property Bridge............................................ 48
CONTRIBUTORS Arvo Elias, Chris Irons, Col Myers, Mike Phipps, Simon Barnard, John Punch, Trevor Rawnsley and Mike O'Farrell.
Tathra Beach House: A rare opportunity waiting for the right people.......... 50
Accom Properties Sales Report........................................ 46
Spotlight on Northern New South Wales: A region coming of age......................................................... 52 PROFILES
KEY Commercially funded supplier profile or supplier case study Supplier information or content Suppliers share their views in one-off, topical pieces General editorial. Case studies and features may cite or quote suppliers, please be aware that we have a strict ‘no commercial content’ guideline for all magazine editorial, so this is not part of any commercially funded advertorial but may be included as relevant opinion. Happy reading!
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60 FRONT DESK
On the Bay Apartments: A perfect island getaway...................................................... 60 Surfers Chalet: A big comfy family................................................................... 64 THE PREFERRED SUPPLIERS DIRECTORY 66
ResortNews | August, 2019
The very nature of accom and hospitality is demanding. You’re everything to everyone; from concierge, maintenance manager and housekeeper to counsellor, tourism guide, safety officer and authoritarian. You need to be available, both in person and via all forms of communication at all times of the day (and night), while simultaneously presiding effortlessly over channel managers, OTAs, websites and social media. And when that’s done make sure that you
August, 2019 | ResortNews
Trish Riley, Editor editor@accomnews.com.au communicate regularly with the owners, the committee and body corporate and stay abreast of any industry or legislation changes. And can you please be cheerful while doing all of the above. One of the latest buzzwords today is “self-care”. We’re all supposed to be doing it and it can involve anything from taking a walk along the beach to visiting friends and family or establishing a digital shut-down period once the office is closed. There are over 57 million google hits for the term ‘self-care’ but it wasn’t until I was speaking to a resident manager recently and she confessed to being “afraid to leave the property just-in-case” that I realised how much personal pressure and responsibility rests in this role. A high level of identification with work means that you’re
always hooked. If you identify with your business too much, then you relate all of your work experiences to yourself. You lose perspective and along with that, a clear vision of yourself and your life. Successes can become a boost to your selfesteem and experiences of failure can become a personal crisis. All decisions are made in accordance with your business. ‘Holiday? I can’t now. There is too much to do.’ ‘Children? Would be nice, but starting a family would be way too much for my nerves and anyway I’m needed at work!’ ‘Travel? Maybe in two or three years, hmm, well later anyway!’ ‘I am so tired. Sleep in? No, I can’t.’ It is totally normal, particularly in a people-centric environment where you literally work from home, to have times when your work takes up a lot of space. The danger lies in one-sided identification. Are you your job or do you have a job? There is a small, but important difference. Do you draw conclusions about your self-worth based on your successfully completed tasks or comments from your residents? Or does your selfworth remain untouched by life’s diverse ups and downs? If you don’t take care of yourself, you can experience burnout, stress, fatigue, reduced mental effectiveness, health
FRONT DESK
problems, anxiety, frustration and the inability to sleep.
Ultimately, it’s about finding balance. It’s time to let go of the expectations and the excuses, put your oxygen mask on and ensure that you are getting enough rest, exercising regularly, eating right and spending time with loved ones. Don’t try and be all things to all people - focus on your strengths and outsource the rest to others. You may have a to-do list with 50 tasks on it, prioritise your time and the tasks and tap into technology if it makes things easier (but remember to switch them off). Know and nurture your network, do what you love (something other than work and give it the time it deserves - it will energise and refresh you, and enable you to nurture the creative thought that is essential to every business owner. Last but not least, be realistic. At the end of each working day, ask yourself what worked today, what didn’t, what went wrong and how the issue can be fixed. Remember there are thousands of businesses just like yours learning the same lessons every day. Don’t forget to tap into the valuable resources around you – your peers – for help. I trust you will enjoy reading this issue. Have fun switching off.
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EDITOR'S NOTE
If you’ve ever been on a plane or have paramedic or first-aid training, you will have been told that in the case of an emergency you have to fit your own oxygen mask before helping others to fit theirs. While I’ve travelled on a lot of planes, thankfully I’ve never actually had to follow through with this instruction, but it is an important metaphor for those of you who run around taking care of everything and everyone except yourself.
isn’t a dirty word
NEWS IN BRIEF
The Ralan Group under administration With a development pipeline of over 3,000 residential units in the construction or pre-sale stage as well as operating accommodation assets comprising over 600 rooms, The Ralan Group has been placed under voluntary administration. It is estimated that the total value of creditors to the specialists in the development, marketing and management of residential and commercial property in Sydney and the Gold Coast (The Ruby Collective) is to be around $500m across the group. Grant Thornton are undertaking an urgent financial assessment of the Group and will be holding a first meeting of creditors shortly. But Said Jahani, National Managing Partner - Financial
Advisory, Grant Thornton Australia has said that in terms of the operating businesses within the Group, it is as far as possible, business as usual. When asked what this means for The Ruby Collective and existing bookings, Jahani said that while the Administrators remain in control, it is business as usual for The Ruby Collective and Parade Resort and people can be assured their existing bookings stand, and both properties are accepting future bookings at this point in time. “There should be no material impact for people that have purchased in Tower One which has been completed. The additional towers are not yet in construction phase and as such there are no contractors or trades engaged in building works on these towers. We are working with key stakeholders regarding
The Ruby Collective, Gold Coast
the next steps in relation to the towers still in planning”. More recent reports however, state that buyers in the four future towers at the Ruby development site have been told that deposits
from their off-the-plan buys have likely already been spent by the failed Ralan Group. There are approximately 300 – 350 people currently employed across the Ralan Group.
Owners lose $3.6m as Airbnb entrepreneur goes bust Almost 1000 owners have lost millions of dollars after handing over rental homes and units to a Sydney entrepreneur who promised to let the properties for high returns through Airbnb.
the dark about when properties
Callum Forbes, the young CEO and founder of company And Chill, pitched to property owners that he would earn them juicy returns on their rentals, the company’s promotional material promising: “You can enjoy your vacations with your friends and families while the managers will look after your property.”
said ‘there’s a delay because
However, clients repeated attempts to get their hands on the funds over the past two years were met with numerous excuses. Now 940 property owners say they have lost sums ranging from $20,000 to $100,000, with And Chill owing at least $3.6 million in rental payments and
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were rented out and what rates were charged on their behalf. One told the newspaper: “It was always excuses. “They’d said ‘it takes, at best, 60 days to get the money from the booking platform’. Then they’d we’ve missed a deadline’ or ‘we have to wait for the next report’. Eventually they didn’t take my Callum Forbes
the company placed in the hands of an administrator. According to The Australian, administrator McGrathNicol said in a report to creditors that “the failure” of Forbes and former director Jeffrey Feng to “maintain books and records” lead to “a presumption of insolvency”. “The director and former director may be personally liable for all accounts,” the report says.
calls and contact ceased.”
During more than two years as rental agent, the Australian alleges And Chill took Airbnb bookings on behalf of property clients worth an estimated $20 million.
A couple with six properties
The And Chill Property Management company was supposed to forward to clients the funds received from Airbnb, minus an agreed commission, but payments quickly dried up and clients say they were left in
is unable to comment about
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managed by And Chill told The Australian they believe they had lost around $100,000. With And Chill in the hands of administrators, Forbes says he the affairs of the company. He has, though, admitted claims of educational credentials made on his LinkedIn profile were inaccurate. ResortNews | August, 2019
Body corporate invokes rare review over sale A lengthy standoff that threatened to sink a management rights deal worth around $6 million into a lake has had a happy ending. The buyers of the rights to the three-tower South Lakes community overlooking Lake Orr at Varsity Lakes, Gold Coast are finally ‘on site’ in what is something of a better-late-than-never scenario. A deal to buy the rights was signed 11 months ago but things went far from smoothly as a process possibly never used before on the Gold Coast unfolded. It seems the South Lakes committee, or
some members of it, weren’t happy with a couple of aspects of the sales arrangement and the matter turned into a saga.
When a syndicate stepped forward and signed up in August, the Emandar partners looked ready to head for the door.
Sitting on the sidelines watching were developers George Mastrocostas and Evan Raptis (Emandar), who had retained the rights and installed their own management team when the 374-apartment project was completed 18 months ago.
The due diligence was completed, the parties involved entered into the assignment process and it was then that the South Lakes body corporate apparently stepped in and invoked a right to have a forced review of the sale terms.
It was March, 2018, that the South Lakes rights, with the associated caretaking agreement, were put on the market, and the sale package included a letting pool with more than 200 apartments, a manager’s residence, and offices.
Such a review, rarely if ever used on the Gold Coast, is only available to a committee when the rights are sold by a developer for the first time and not in subsequent sales. In the South Lakes case, it appears the committee wasn’t happy with the manager’s salary
or the schedule of caretaking duties. Things were going around in circles until eventually the buyer and seller each called in an independent assessor – the upshot of which, apparently on the eve of the squabble being referred to the Queensland Civil and Administrative Tribunal, was an agreement with which all parties were happy and the deal proceeded. Mastrocostas will probably have some more to sell in the next 18 months or so — he’s building a sold-out apartment tower at Labrador and has other projects in the pipeline on a $15 million Hope Island landbank. Source: GC Bulletin
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August, 2019 | ResortNews
hotelinteriors.com.au • 1300 876 055 INDUSTRY
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Couran Cove Island Resort sells for a buck
Airbnb host fined $177,000 for letting council apartment A man who made six figures from his Airbnb rental property has been forced to pay it all back after his property listing lie was exposed. An Airbnb host has been slapped with a $177,000 fine and booted from his home after renting out the apartment to tourists despite it being council property.
Couran Cove Island Resort
It’s been revealed the new owners of Couran Cove Island Resort picked up the four-star holiday destination on South Stradbroke Island for a mere dollar but it’s not the bargain of the century that it appears at first glance. That detail is contained in a report to creditors of failed ASX-listed Onterran which owned the resort before selling it to EDG Capital, a boutique Sydney property and investment group earlier this year. Before getting too excited about the bargain price however, the deal also involved EDG Capital and a related entity called WN
Developments taking on $17 million worth of debt owed by Couran Cove Island Resorts Pty Ltd and its various subsidiaries.
The Central London apartment, that has been advertised since 2013, had attracted more than 300 reviews from guests who enjoyed their stay. However, the “cosy studio” that included a hot tub was actually a council house he had been making money off under a fake name.
Liquidator David Clout, of David Clout and Associates, told creditors that Onterran, which also ran the failed construction companies Bloomer and McGrath Homes, purchased the resort and various assets for about $11 million.
Toby Harman, 37, had been letting his central London apartment out for years under the name “Lara” with a fake photo of a woman.
Onterran, which ended up owing unsecured creditors almost $20 million, is now the subject of a deed of company arrangement approved by creditors last month. Meanwhile the new owners of Couran Cove say they have “a vibrant plan” to upgrade and further develop the South Stradbroke Island property.
It is understood Mr Harman was caught with anti-fraud software after the reviews used his real name, which conflicted with his “host” name on the accommodation website. A council spokesman, Andrew
Smith, said the illegal practice was “dishonest” and the property would be reallocated to someone else in need of home assistance. Mr Harman has now been evicted from the property and told to pay back $177,000 in profits. An Airbnb spokesman said: “We regularly remind hosts to check and follow local rules — including on subsidised housing — and we take action on issues brought to our attention,” the statement read. “Airbnb is the only platform that works with London to limit how often hosts can share their space, and we support proposals from the mayor of London for a registration system to help local authorities regulate short-term lets and ensure rules are applied equally to hosts on all platforms in the capital.”
Party houses ruining short stay’s name Gold Coast residents have united with short-term property hosts in calling for a notorious Airbnb party house to be shut down. The six bedroom, multi-milliondollar Queensland home, boasting its own man-made beach, jacuzzi and private bar, rents for $4,000 a night on Airbnb. But according to 9News, neighbours say their weekends are “being ruined by drunken party-goers stripping naked, playing loud music, peeing on their lawns and parking their cars all over the street”.
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ASTRA – the Australian Short Term Rental Accommodation Association – says such properties are giving the entire sector an undeserved bad name. “Responsible short-term property renters want these shut down as well,” said spokesperson Peta Morrison. “Irresponsible hosts, owners and agents are causing massive issues for the short-term rental industry in Australia and the press is only too happy to keep sharing the bad stories.” Gold Coast City Council told 9News an investigation was underway into the offending
property following numerous complaints which have driven some to film the parties in an attempt to get them curtailed. “We work all week, we need the rest during the weekend and that’s what we face,” one local told 9News. Another, Peter Write, claims to have spent thousands soundproofing his home across the canal. “We pay enormous rates and taxes here to have peace and quiet… we pay for that, and council is not looking after us,” he told the media outlet. Owner of the party house, Jamie McIntyre, says it’s the residents who behave like obnoxious neighbours and
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attempt to sabotage his business by throwing garbage bins in the pool, pouring engine oil into the spa and mowing along the fence line early in the morning. He reportedly suggests residents should go away for the weekend if they object to his tenants. The issue of unregulated short stays has long been a contentious one, with accom’s major industry bodies, including the Accommodation Association of Australia and Tourism Accommodation Australia, arguing short stay hosts should be subject to the kind of legislation traditional providers are bound by. ResortNews | August, 2019
Accom in limbo over alleged OTA abuses By Kate Jackson, Industry Reporter
Accom operators are crying out for industry help to tackle OTA behaviour, more than a year after the ACCC began its review into the ‘conduct and practices’ of the dominant booking platforms. Back in August 2018 a spokesperson for the consumer watchdog told ResortNews: “The ACCC is continuing to investigate the conduct of online travel agents in enforcing price and availability parity requirements with Australian hotels and accommodation providers.” At that time, the Accommodation Association of Australia confirmed many of its members had already cooperated with the consumer watchdog over the investigation. A year on, the ACCC says it is “unable to comment on any potential investigations that may be ongoing”, leaving accom operators in limbo over increasingly brazen OTA practices which they claim are damaging profits and threatening livelihoods. We reported in March that Expedia and Booking.com routinely pressure operators into matching the lowest rates of competitor OTAs, saying they will reduce the online visibility of those that don’t comply. August, 2019 | ResortNews
Now new online listing platforms such as Nustay are increasingly encroaching on the market, trawling the web for wholesale pricing, listing properties without operators’ knowledge and refusing to remove properties from their sites or reveal where they get their discounted rates from. While they have distanced themselves from some of these new players, Booking.com and Expedia are demanding rate parity from operators for the rates those competitors are charging. And the big two OTAs also stand accused of driving down rates in a similar way through their own discount affiliates, including Agoda and Booking.basic. While operators are afraid to be named for fear of retribution by powerful industry bodies, one insider told ResortNews: “It’s getting terrible now. I have been in the hospitality game for about 30 years and its really getting dirty, the tactics that are going on. “What I think the ACCC needs to do is restrict these sites, affiliates etc. They should have approval from a property to sell rooms. They are just going around doing whatever they want and covering their tracks.” Another said of the online platform Nustay: “They won’t delete me, they say they can’t which I think is b***shit. The list of excuses just goes on and on. “We’ve also had issues with Agoda, Ctrip and Booking.basic.
“The trouble comes when somebody walks in off the street and you say ‘the room is $150’ and they pull out their phone and say ‘here it’s $137’.
Accommodation Association of Australia has described the issues of rogue OTA behaviour as the organisation’s “number one priority”.
“If I don’t honour that, the customer’s going to walk and he doesn’t want to hear ‘oh, this is a rogue OTA’.”
“AAoA is working hard to stop this behaviour as we know it makes it harder for accommodation providers to operate,” he said.
Tourism Accommodation Australia CEO Michael Johnson says the organisation is working to end the process of OTAs distributing rates without permission. “Recently at a revenue managers advance training course, TAA asked if anyone had heard of Nustay – no one was actually aware of the organisation – but I was able to show each and every one of them, they had rates on this new platform without any consultation with them whatsoever,” he said. “Obviously, the concern is the OTAs are distributing rates without permission. This process needs to stop and TAA will continue to have talks with OTAs to bring this practice under control.” An ACCC spokesperson said that under the Australian Consumer Law, businesses are prohibited from making false or misleading representations. “Online travel agents must not claim they have commercial relationships with accommodation providers unless it can be substantiated,” he said. Dean Long, CEO of the
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“Federally, it is our number one priority for government action and we are calling on the new Liberal government to support our industry and put an end to these unfair arrangements. “AAoA is the industry leader on this issue and we will continue to be, as we are working with the ACCC and other government departments to ensure they understand the impacts on our sector.” One operator, who again asked not to be identified, has called for the industry to run an awareness campaign educating the public on their booking options. “It would be nice to see the Australian government, ACCC and tourism councils get behind the small hotel/motels and do a campaign to tell Australians that by using these companies they are funding overseas economies rather than booking direct, getting a better deal for booking direct and keeping Aussie dollars in Australia,” he said. “We would gladly disconnect from all of the OTAs, but a number of our bookings come from overseas guests who use these platforms.”
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A BORN EDUCATOR 10
By Trish Riley, Editor
“Those who know, do. Those that understand, teach.”
– Aristotle
Born in Taiwan and the oldest of three boys, Paul Shih credits much of his entrepreneurial spirit and uncanny success to the atypical open-mindedness and foresight demonstrated by his parents when they made the confronting decision to relocate their family to the unfamiliar shores of Australia, and Queensland in particular. “It may not seem like an unusual occurrence,” says Paul, “but the decision to move went against a number of timehonoured cultural traditions. “In Taiwan, there is little time allowed for a carefree childhood; there is a strong emphasis on education, extra studies and tutoring and the focus right from the outset is which university a child is going to be accepted into,” he explains. “My father wanted the opportunity to raise his family outside of this rigid regime, so they applied to immigrate to Australia and when I was in grade 4 I was told that we were leaving Taiwan – I had never even been in a plane before. “I remember being very unhappy at the time,” says Paul, “but in retrospect I am grateful that my parents were brave enough to make that choice for the family.” The relocation turned out to be the first of a number of hurdles faced by the young student. At 11 Paul didn’t know one word of English and recalls sitting down with his brothers the day before school started to learn the English alphabet. Paul studied hard and excelled at school ultimately achieving an OP1, and as was the norm for
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ResortNews | August, 2019
children of Chinese heritage, it was expected that he would go on to take up medicine or law. He recalls considering a career in architecture as he was talented in graphic design, but after conducting interviews with those established in the industry and being told unequivocally “Don’t, it’s tough, competitive and there’s not much money in it” he once again sought his father’s advice. Again, contrary to tradition, his father encouraged him to choose his own path so he took on a dual degree in business management and arts Japanese (for which he spent year in Japan). Paul says he also realised he had an overwhelming interest in property and on completing his degrees, he completed his Masters in Project Management specialising in property. In 2004, Paul joined the Aldy Group – ostensibly to gain work experience, but he excelled and was promoted several times, achieving accolades as one of the top sales consultants in Queensland and going on to be marketing manager of Australia and New Zealand. Paul specialised in the Chinese market and was with the Aldy Group until 2008/9 when the GFC saw the collapse of several developers. When the directors started new concerns, Paul joined Yong Real Estate Franchise for two years during which time he started to teach part-time with Professional Real Estate Training (PRET) Australia – a Registered Training Organisation providing nationally accredited courses for the real estate industry, and he started to hear and learn about management rights. While happy to be immersed in training within the property sector, Paul was concerned that the growing number of Chinese candidates attending his classes weren’t achieving optimum understanding of the course material that was presented in English. After consulting with the ASQA and being advised that course delivery could be done in Chinese as long as the assessment and paperwork was all in English, the first bi-lingual real estate course was developed and presented in Mandarin. Despite the post GFC sentiment, the Chinese involvement in the property market increased and by 2010 Shine Real Estate and Joy August, 2019 | ResortNews
We recognise the need to raise the level of professionalism and standard of property managers for the greater good of the industry
Realty started holding seminars to promote management rights to the Chinese community.
case studies and actual incidences that demonstrate the reality of a management rights operation so that my students can better relate to it.
Paul continued to be involved in the burgeoning industry and when his youngest brother approached him for support to get into the management rights industry, they decided to look for a suitable complex together. The purchase of Richlands Rise, a townhouse development with 47 long-stay lets enabled Paul to apply his teachings and learn more about the industry – actively using situations within the complex as case studies for his students – while his brother and cousin managed the day-to-day operations.
“The most important initiative however, has been the establishment of the Australian Property Management Alliance (APMA) – an industry body set up as a support network to help managers, primarily Chinese, navigate the complexities of the industry including body corporate and committee interaction, legislation, compliance and day-to-day operation. Paul Shih is the honorary president of the APMA.
Within three years, in possession of his own property investment portfolio and extensive body corporate liaison experience, Paul saw the neighbouring land being developed and purchased the management rights to Brentford Outlook off the plan. The brothers are currently in negotiation for a third complex nearby. I go on to ask, from an educator’s perspective, how he believes the call for increased professionalism, further training and accreditation is impacting the industry. “The management rights industry has evolved significantly over the past 20 years,” says Paul. “The required licensing however - an RLA, is exactly the same as it was. The content is focused on property letting and the “do’s and don’ts” of handling a trust account – there is little, if any, content that relates to the management rights industry, body corporates and committees, compliance issues or understanding the schedule of duties. “What I have always done when conducting an RLA course is to bring in examples of situations,
“As an industry group of almost 1200 members – 80 percent of whom are former students - we recognise the need to raise the level of professionalism and standard of property managers for the greater good of the industry. “Ultimately, APMA wants to work with all other industry bodies to ensure their collective voice is heard by the industry and government when it comes to future law reforms and it’s important that the sector has a mutual agenda that is fair for all.” To this end, Paul encourages APMA members and students to also hold memberships with the Australian Resident Accommodation Managers’ Association (ARAMA) and ABMA, and to attend events where they are exposed to industry experts and can upskill. Paul himself serves on the ABMA review panel and has started to teach elements of the building management code to students and willing managers. “By participating and assimilating with other groups and by attending industry seminars, and information evenings, managers
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are able to share concerns and learn from others, as well as realising that the challenges they are experiencing are happening to all managers, and that they are not merely cultural,” adds Paul. Walking his talk, Paul has also just been elected the president of the Taiwanese Chamber of Commerce in Oceania after 16 years of participation. “In addition to the networking opportunities offered, this role enables me to share how the management rights system works in Australia. When compared to that of Taiwan, which has significantly higher density living and unfortunately, widespread corruption among bodies corporate, the Australian system is far more democratic; everyone is answerable. “Our model is the envy of our Taiwanese counterparts,” adds Paul, “So saying, there is a lot we can learn from each other and I’m happy to say that each year we will have a number of faculty students coming to Australia from Taiwan for work experience. “In Chinese culture, people respect their elders and teachers a lot and even after graduation my students contact me for advice and help, and I feel a sense of responsibility to help these managers to grow and succeed. “My impression is that most Chinese operators are trying very hard to be successful in this industry. They are willing to undertake additional training and to accept guidance from those in the know - they just want a level playing field when it comes to choosing the right service provider for themselves – whether it be training, financial or legal – rather than being ‘forced’ to work with parties with obvious vested interests. “As with any business, the management rights industry needs to be seen to be devoid of any bias,” says Paul. “The most important learning occurs once the manager is on site and only when all the processes are independent and competitive, will we be able to accurately determine how they are performing.”
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INDUSTRY Q&A
Q&A
Q:
What is the difference between an ‘Option’ and a ‘Top Up’ or ‘Variation’?
A:
Options, Variations & Top Ups
Mike O’Farrell, MLR Services
In an industry that is evolving as quickly as management rights is, there are always areas that appear a little ‘grey’. To this end, ResortNews will be posing questions about topical and current issues to industry specialists. In this issue I spoke to Mike O’Farrell, director of MLR Services about the complexities surrounding options, variations and top ups…
‘Options’ are sometimes called “extensions”. The term of the management rights Agreement that has been granted can be broken down into an initial term and any number of ‘Options’. The ‘Option’ terms can and will vary from Agreement to Agreement. The important thing to remember however, is for managers to know what they have to do to exercise the ‘Option’, and when. If a manager fails to exercise their ‘Option’, their agreement will come to an end. There is no recourse in this situation. As the onus on seeking to take up an ‘Option’ lies with the manager, it is absolutely vital that the ‘Option due’ dates are made as clear and concise diary and calendar notes as to when to start and complete the process; and if there is any doubt about the dates, please check with your legal representative.
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ResortNews | August, 2019
Remember, the Agreements are what were purchased and that asset should be protected.
votes with regard to the motion. In most cases, the appointed legal firm would prepare the motion and Deed of Variation and the body corporate would request its legal firm to review the proposed motion and deed.
‘Top Ups’ and ‘Variations’ is the process by which the management rights Agreements are extended. In other words, a variation to an agreement by creating a new term.
Unless otherwise negotiated, a manager should expect to pay the costs of both legal firms’ fees.
Q:
What sort of meeting is required by the body corporate for an ‘Option’ and/ or ‘Variation’ to be granted?
Q:
When should a manager start asking for a ‘Variation’ or ‘Top Up’?
Q:
What are the basic steps in convincing and then communicating to owners your request for a ‘Top Up’?
A:
A:
Seeking to exercise an ‘Option’ would normally be carried out by a manager’s legal firm, by writing to the body corporate with the appropriate request. Generally, Agreements will provide specific detail on this process.
This is not a matter that can be referred to the Body Corporate Commissioners Office or QCAT.
‘Variation’ or ‘Top Up’ to an Agreement is done at an emergency general meeting (EGM) or annual general meeting (AGM) and is approved by ordinary resolution; the simple counting of ‘for’ and ‘against
• Do the job and do it well.
•
Managers should be prepared to negotiate; a ‘Top Up’ that may require a new set of duties with a similar salary and added review periods will still be beneficial.
•
Managers should be prepared to solicit owner support once the AGM papers are distributed.
Managers should communicate their intention to seek a ‘Top Up’ to the committee while seeking feedback on current duties and whether they need to be reviewed.
Q:
•
Managers should communicate with the committee about the current salary, demonstrate how it is allocated and earned.
•
Managers should communicate with owners regularly through newsletters about the good things they do, as well as passing on any good feedback or references from guests, other
Standard Module – 10-year Agreements: I would encourage managers to seek a ‘Top Up’ every two years, and definitely no later than with seven years to run. Accommodation Module – 25-year Agreements: I would encourage managers to seek a ‘Top Up’ every five years, and definitely no later than with 19 years to run.
•
A:
A ‘Top Up’ is not an automatic right, it must be earned. There is no obligation at all on a body corporate or an owner to vote in favour of a ‘Top Up’, and there is no recourse if the request for the ‘Top Up’ is denied.
owners, the committee, tenants and so on.
In most cases, I would recommend at least 12 months prior.
Managers should clearly communicate their intention to owners, starting with the committee, well ahead of the AGM.
Agreements are regulated by the BCCM Modules, so when should one seek a ‘Top Up’?
A:
Source: MLR Services , Mahoneys
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ARAMA REPORT
Escalating fees: are resident managers paying too much? In the business of management rights, resident property managers must seek the consent of the body corporate committee (or owners corporation committee) to make any changes to their caretaking or letting agreements. Whether it is to seek assignment of the contract to an incoming manager (new buyer), a variation of contract terms, or ‘top-up’ or extension, it is becoming increasingly common in these instances for the body corporate to seek legal advice. While resident managers are obliged under relevant legislation to meet the legal and administrative costs ‘reasonably incurred’ by the body corporate,
Resident managers have little or no power over which legal firm a body corporate engages and therefore no control over the costs involved Trevor Rawnsley, CEO, ARAMA
in recent years there has been a sharp increase in legal fees and a growing expectation that they will pay for anything. Unfortunately, resident managers have little or no power over which legal firm a body corporate engages and therefore no control over the costs involved. Legal advice on straightforward assignments from one party to another, for example, can cost
almost triple what it did just two years ago. And challenging these fees during the sale process can delay the transaction or simply amount to additional legal fees. So, how can we protect resident managers from unreasonable fees when seeking body corporate consent? John Mahoney from independent law firm Mahoneys, explains that while a body corporate cannot be directed to use a particular law firm, it has appropriate regard to the costs its lawyers might charge when deciding which lawyer to appoint to act on an assignment. “A body corporate could be acting unreasonably and in breach of its statutory obligations if it appointed a lawyer whose costs are considerably higher than those of another specialist body corporate lawyer with similar expertise,” says John. “A body corporate should also avoid appointing a law firm with a history of quoting a low fee for an assignment and then increasing it significantly, a regrettably common practice.”
Australian Resident Accommodation Managers Association is the peak industry body representing the interests of people who are involved in management rights.
Frank Higginson from Hynes Legal, adds that while there is the ability for resident managers to seek a review of legal costs, those with a strong relationship with the body corporate would likely always avoid any dispute. “The industry has evolved substantially from where it was five years ago with more participants than ever, and body corporate committees are engaging legal advisers and even third-party consultants more often around important decision-making,” says Frank. “There are experienced lawyers who have been in the management rights industry for many years who understand both sides. If the relationship between body corporate and a resident manager is strong, it is highly unlikely to result in a dispute over legal fees. “Particularly around an assignment, outgoing resident managers can protect their position by doing a good job, maintaining their relationship with body corporate and producing a properly qualified and experienced buyer – this will give the committee confidence.”
QLD - NSW - VIC - WA
For membership enquiries:
national@arama.com.au | www.arama.com.au 1300 ARAMA Q (1300 27 26 27)
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INDUSTRY
ResortNews | August, 2019
STATE REPORT
Voting Rights and conflict of interest “Am I allowed to vote on this because I’m the building manager?” or “Can I be on the committee because I’m the building manager?” are common questions we get asked. The underlying issue is usually a question of whether there is a potential conflict of interest and how that conflict should be handled. The answers to these and other similar questions vary depending on the particular circumstances, as well as from state to state. In this article I will focus on a few of the answers that apply to owners corporations in New South Wales.
General meetings of the owners corporation
Strata committee meetings In an owners corporation, the building manager (caretaker/ letting agent) is not eligible to be elected to the strata committee unless the building manager is also the owner of a lot in the strata scheme. This means that the building manager (or their representative if a company) cannot be appointed to the strata committee if the building manager only leases or licences an area in the scheme. As it is common for individual shareholders in a building manager company to own a residence in the scheme in their own name (and not in the name of the building manager company) it means that only those persons named as lot owners could be appointed to the strata committee. For example, if Mr and Mrs Manager run the building manager company, but the lot is only in Mrs Manager’s name, then only Mrs Manager may be appointed to the strata committee. Once they become a member of the strata committee, the building manager will likely find that there are times when they have a commercial interest in a matter being decided on by the committee. For example, when the strata committee is deciding whether to accept the building August, 2019 | ResortNews
Col Myers, Small Myers Hughes
manager’s quote to paint a fence. When there is a potential conflict of interest like this, the building manager must disclose the conflict to the other strata committee members.
While there are rules preventing the building manager voting on conflict of interest matters at the strata committee level, those rules do not apply to building managers at general meetings of the owners corporation. If the building manager owns a lot in the scheme and has paid their levies, the building manager may vote on any motion at a general meeting, like any other owner, even if the matter being voted on grants a benefit to the building manager. While this might not seem appropriate to some owners, the key difference is that when voting at a general meeting, the building manager is just one of many who can vote on the matter, whereas at a committee meeting the building manager is just one of a few who can vote on the matter. When this power imbalance is removed it is entirely appropriate for the building manager to vote on matters that affect them as an owner, regardless of how it may also affect them as the building manager.
The need for disclosure is more obvious when the conflicting interest is less obvious, for example when the building manager is instead just a shareholder in the company that provides a quote to paint the fence. Once the conflict of interest is disclosed the building manager cannot participate in any part of the decision process unless the strata committee first votes to allow the building manager to participate. The building manager cannot be present when the strata committee deliberates on such a vote.
Proxies
A person on the strata committee (building manager or otherwise) is also not entitled to vote if the levies for the lot they represent were overdue when the meeting notice was issued and remain overdue when the meeting is held.
A building manager may hold and cast proxy votes at owners corporation meetings, except when the motion being voted on would provide (or assist in providing) the building manager with a material benefit. A material benefit includes for example topping up the caretaking and letting agreements, increasing
INDUSTRY
the caretaking remuneration or withdrawing from legal action against the building manager. When voting on matters that could provide a material benefit to the building manager, owners need to be instructed to direct their proxies to someone else for that meeting. Note that the net is cast fairly widely for this ban and it is not only the directors of the building manager who can’t hold the proxies, but all associates of the building manager who could be seen as acting as the building manager’s agent when holding the proxy. This may include all the staff and relatives of the building manager. When encouraging owners to vote on ‘building manager’ motions they should be directing the owners to forward their proxies to people not associated with their business. Also remember that there is a cap on the number of proxies that a person may hold and therefore managers may need to direct owners to multiple people to hold all the proxies. These are just a few examples of how the rules for voting at meetings apply differently to the building manager than they do to other owners. To avoid making incorrect assumptions you should always check the rules that apply to you in your circumstances at the outset. Liability limited by a scheme approved under Professional Standards Legislation. Disclaimer – This article is provided for information purposes only and should not be regarded as legal advice.
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SCA REPORT
Finding solutions, not defendants Stories detailing the evacuations of Mascot Tower, Opal Tower, and 19 Gadigal Avenue have been surfacing across all forms of media over the past year, with some experts predicting that the defects found in these buildings may just be the tip of the iceberg for the Australian construction industry. Images of cracks in concrete, steel braces supporting walls, and residents wheeling their belongings down the street have stirred community anger with those responsible for the construction of the buildings attracting most of the blame. However, before we convict them in the court of public opinion,
The prevalence of building defects and issues throughout the country suggests that changes need to be made
Simon Barnard, President, SCA, Qld
it must be noted, that there are many individuals and companies involved in the construction process and, at the time of writing, none have accepted fault in any of these three cases. We understand the anger and resentment associated with these buildings, and the financial uncertainty faced by owners must be borderline crippling,
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Over 40 years of service to the Management Rights industry, providing assistance in: Buying and Selling Ensuring Agreements Comply with the Law Agreement Negotiation with Bodies Corporate Representation to Licensing Authorities ‘Body Corporate & Community Management Act’ Advice Employee Dispute Resolution For expert advice please contact; Paul Jones John Punch Phone: 5570 9327 Fax: 5539 8745 Phone: 5570 9322 Fax: 5539 8745 paul.jones@spglawyers.com.au john.punch@spglawyers.com.au Cnr Bundall Rd & Crombie Ave Surfers Paradise PO Box 5164 GCMC, Bundall, QLD 9726
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but knee-jerk reactions and generalisations of shoddy developers will not solve the problem. Many developers pride themselves on their record and are quick to rectify mistakes or defects when they are brought to their attention. To lump these respectable organisations in with so-called phoenixing companies is unfair to those who strive to enhance their reputations by producing highquality and long-lasting work. Despite our hesitancy to blame the entire construction industry, we do believe that the prevalence of building defects and issues throughout the country suggests that changes need to be made. The unfortunate truth regarding regulations that set construction requirements is that they only outline minimum requirements and setting low bars does not encourage industry culture to excel. If developers only aim to reach minimum standards, then there are going to be some cases where they unintentionally fall short. If they aim to exceed the standards, then a mistake or two is unlikely to take them below the lowest level and consistent, substantial defects are unlikely to be an issue. Policymakers have had faith in the building industry to address its inadequacies and meet consumer expectations. It’s time they repaid that faith with a cultural shift towards a higher benchmark. Recent research has suggested that better, more detailed design could prevent more than half of the total defects, but it is often one of the first things to be scrapped due to its expense. Without these extensive specifications, issues such as water ingress become more prevalent.
INDUSTRY
Considering strata title schemes that are three storeys or more are not captured under the QBCC statutory Home Warranty Scheme, the discovery of defects places many bodies corporate in a highly uncertain position, where their only option in the case of defects is to take legal action. We believe that altering the statutory insurance scheme to include strata buildings over this arbitrary three-storey limit would be a sensible move allowing for owners to be better protected. Of additional benefit would be increasing the 6-year 6-month deadline for defect claims to ten years, thereby granting consumers extra time to discover these defects and begin the lengthy claims process. Strata owners would also profit from more accountability on the certifier, builder, and developer by way of increasing obligations at the first Annual General Meeting of a scheme or at the time of CMS registration. Consumers could even be saved from unnecessary expenses by, for example, requiring an original owner (developer) to hand over all development approvals relevant to the development work associated with the constructions of the building/s, creation of the lots, and the establishment of the scheme. None of these suggestions will come as a surprise to the Queensland government, as we have been advocating for them for many years. However, with increased public awareness and owners facing multi-milliondollar rectification bills, it’s now up to state authorities to consult with stakeholders and develop a workable solution. ResortNews | August, 2019
Get involved and take responsibility As I stated in part one, there really should be no surprise to anyone about when an AGM is to be held and what is involved in conducting it.
Part two of a three part series
Annual general meetings:
Tips for best practice
In last month’s article – part one – I covered some of the basic processes of an annual general meeting (AGM), including some of the key timeframes involved. With those details in mind, this article – part two – provides some AGM tips. You might like to think of it as some AGM ‘best practice’. None of this content is provided as legal advice or direction from my office, but merely tips that you might want to keep in mind. Every scheme is different, and so the circumstances of every AGM are therefore likely to also be different.
AGMs are for making decisions, not discussion Bodies corporate are in the business of making decisions. Once a decision is made, it can be implemented or, if necessary, challenged. This is why an AGM is, from my perspective, a place for decisions rather than discussion. By all means, owners should be encouraged to discuss issues amongst themselves. Ideally though, this should be happening before the AGM. There is nothing stopping owners contacting other owners to discuss agenda items beforehand, and there is also nothing stopping owners encouraging other owners to think or vote about things a particular way. August, 2019 | ResortNews
If you expect that others would respect your views and vote at an AGM, then the reverse is true also. This is particularly so at the meeting itself. Harsh, inappropriate or inaccurate comments and statements made in such a forum at which a number of other parties are present, may have long-lasting and negative effects on the overall harmony of the scheme.
Chris Irons,
Commissioner, Body Corporate & Community Management
That said, at the AGM, it is the decisions that are minuted, not the discussion around them. One of the reasons why timeframes for distribution of AGM papers are required under legislation is to ensure that everyone has sufficient time to consider agenda items in advance so that they can vote accordingly at the meeting.
“Do unto others” – show some respect The AGM presents all eligible owners the opportunity to cast their vote on what are critical issues not just for the scheme, but also for the owner and their financial interests. It is therefore quite likely that some agenda items might lead to heightened or emotive feelings among voters. There is nothing wrong with this and, indeed, it is healthy that there are strongly-held and debated points of view. That said, it is vital to keep in mind that all points of view should be respected, particularly where there is a vote to be had on the issues.
If there is disagreement about validity of AGM processes and outcomes, then this is something ultimately determined through the dispute resolution processes of my office.
If submitting a motion, make sure it can be achieved Taking the opportunity to submit a motion to an AGM is only a worthwhile exercise if the motion in question makes sense and involves something which can actually be achieved. For example, a motion that “all committee members demonstrate proper behaviour” sounds good, but in practical terms it seems almost impossible to achieve or measure something so aspirational. It might be a better idea to word motions so that they have an achievable and practical outcome. In the prior example, a more achievable motion might be that “all committee members should take the Commissioner’s Office free online committee member training module”. This has a practical, measurable
INDUSTRY
Given the amount of lead-in time involved in an AGM, there is ample opportunity for owners and committees to really get involved in what is the most crucial forum of decisionmaking for a body corporate. If, as an owner, you are concerned about how things are running at your scheme, then take the responsibility to not only do the basics of reading agenda papers and actually casting your vote, but also ensuring your contact details are up to date so that when the papers are distributed, you will ensure they get delivered to the correct address.
Cast your vote from an informed position Finally, in casting your vote, do so from a position in which you’ve gathered information. In other words, make sure you know what you are voting about. Ideally this information should be provided for you in the form of an explanatory note accompanying motions. Otherwise, if you are unsure about what a motion means and its impact, you can discuss it with other owners, seek clarification from the committee or other party (such as your body corporate manager, if appropriate) or better still, find out for yourself by contacting our office for general information. Some of the motions voted on at an AGM can, for example, involve significant amounts of body corporate expenditure. Remember, this is expenditure that you are contributing to via your body corporate levies so it is imperative you are informed about what the spending is intended to achieve. Remember, these tips are guidance only. Legal or other professional advice may be required depending on the circumstances. For general body corporate information, contact my office on 1800 060 119 or www.qld.gov.au/bodycorporate.
17
BCCM REPORT
outcome and it might also have more chance of getting other owners’ support if the motion has this kind of pragmatism.
LEGAL EASE
It stops at the border… When I am attending legally to transactions for buyers or sellers in buying management rights in Queensland, I often think how fortunate we are with our particular body corporate laws and the foundations that were put in place for them, particularly back in the 1990’s. Other states just do not have the legal structures in place to ensure that this area of commerce is fairly and reasonably covered for the protection of the activities.
financier to give a notice to the body corporate of its involvement and then includes arrangements to cover the financier if:
One particular area that comes to mind relates to the coverage of financers who supply capital in the form of loans, for which security is needed over the Caretaking Agreement and Letting Agreement (Service Contract and Letting Agents Authorisation). Normally, it is very difficult to arrange finance for the acquisition of a business relevant to the goodwill component. The real estate component has been readily catered to by the law through the ability to register a mortgage, but the interests of a business operator in management rights, that are protected by a Caretaking Agreement and a Letting Agreement from the body corporate, cannot normally be readily mortgaged or be the subject of a strong security to the lender, as the financier. When the Body Corporate and Community Management Act of 1997 was being formulated as a fully codified system of laws for all aspects of the needs of all parties involved in body corporate matters, the question of covering the financier’s needs was readily tackled. Of course, by that stage in Queensland, there was already a strong Management Rights industry and a strong interest by particular banks to create a lending structure catering to the needs of those who wish to become Management Rights operators. I was part of the group of the advisors who, at the time when
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(a) the body corporate wishes to terminate the Caretaking Agreement and Letting Agreement for the default of the manager, or,
John Punch,
Short Punch & Greatorix Lawyers
a proposed Act was being fully investigated and considered for introduction as legislation, were able to sit down with the government officers and reason out a means by which the legislation could cover all aspects of the needs of a body corporate. Other experts who assisted were Dave Allan, who was president of the REIQ and had set up the management rights chapter of that organisation, along with Howard Stewart, who had pioneered the area of body corporate management for the administration of body corporates. There were also representatives of home unit owners’ groups. The government of the day sought an honest, fair and pragmatic determination of the legal needs of everyone and such laws have set Queensland apart from the other states. Getting back to the question of financier’s protections, Division 4 of Part 2 of the Act contains a series of sections which define what a financier of management rights is, the requirement for a
(b) where the financier wishes to exercise rights under its security to sell the management rights to a third party, so that if a manager is in default then the financier can recover the amount of a loan by introducing a transferee to the body corporate, as though the manager was completing a sale itself. The law protects the body corporate and the financier in these areas. There is also a section which prohibits agreements direct between the financier and the body corporate, where the body corporate could impose unnecessary conditions on the financier, to disrupt the ordinary operation of the management rights as security, and their transfer to acceptable buyers. These provisions are generally seen as producing a level playing field, where no party is overly advantaged or disadvantaged by the provisions, to the detriment of others. As a result, in Queensland today, many banks have large mortgage portfolios and readily loan capital
MANAGEMENT
to buyers of management rights, knowing that they are well secured over both the manager’s lot and the agreements with the body corporates that give rise to the management rights. In recent years, there has been an unexpected decision by the Tribunal (QCAT), in a dispute between a body corporate and a bank, which has been very controversial. It interpreted a provision in the law in such a way where, in certain circumstances, a bank will not have its security protected, despite the obvious desire of the legislation to do so. It is most unfortunate that the current Queensland government has not seen its way clear to recognising the need to have a slight amendment to the legislation correcting that situation. Consequently, we have the Gallery Vie clause query by many banks often before they will lend money and this necessitates management rights operators needing the cooperation of a vote of owners to sometimes amend the provisions of their Agreements in that regard. Finalising that situation by a slight amendment to the Act, would be a worthwhile action by the current government. However, apart from that, overall the financier’s protection structure works very well and adds strength to the industry in Queensland, not existing in the other states and the uncertainty which could otherwise apply to any of the parties is avoided. When there is uncertainty, it is bad for everyone. ResortNews | August, 2019
“Value: A quality or idea that is considered important. The word value comes from the Latin Valere, which means: Be worth. Value is defined as the worth, usefulness or importance of someone or something.” – Courtesy of Professor Google
Value for money. I value our friendship. Value versus return. My personal values. Value of my personal wealth. Valuations. Loan to valuation ratio. Value of the dollar. Value of my time. Our corporate values. Value, value, value… it’s a blur but what does it really mean? I’m prepared to have a crack but first, a caveat. Given that trying to discern value in its many forms is a bit like attempting to quantify the meaning life (if anyone knows, call me please), I will confine my observations to management rights, motels and the like. Let’s start with the age-old misconception that price and value are somehow joined at the hip. They are not. It is true that the amount paid for an item or service may create some sense of value for a consumer but make no mistake, price is not the principle driver. A great example is the cost of, let’s say, a legal due diligence report. Is the best value the cheapest quote that fails to cover the bases or the dearest quote that ends up saving the buyer from possible bankruptcy? In my mind the value lies in the outcome and if ‘El Cheapo Lawyers’ miss crucial matters that place a consumer at risk then, at whatever price, there is no value in the service. You get what you pay for and paying for something that doesn’t do what it says on the box makes no sense. There is no value other than the illusion (delusion?) that a part of the process has been ticked.
play with, so demand suffers. In our game that’s not just demand for the assets we sell, finance or otherwise advise, it’s also demand from travellers who are in turn impacted. Basic economics tells us that price and demand move in concert, so any fall in demand will have an inevitable impact on value.
Mike Phipps, Director, Mike Phipps Finance
risk, quality and return. In our game the perception of value, as defined in the minds of buyers, is driven by numerous factors, some material and some imagined. There are those who would argue that the market drives value but what is the market if not the cohort of buyers who evaluate opportunities and make investment decisions accordingly. Some will see value in a proven business being sold on a 6.5-times multiple, while others will see value in lower multiples for higher risk struggling businesses with upside and the opportunity for higher capital growth. Neither buyer is wrong. It’s just that both must understand the dynamic at play. The whole value/risk ratio gets out of kilter from time to time and that’s when buyers come unstuck.
I guess the point here is that value, risk, quality and return are inextricably linked, and we need to ensure we bear this in mind at all times. Value can be quickly eroded by changes in the availability of capital and the cost of debt together with roll-on impacts on demand. A prudent buyer or advisor will certainly take future probability into account when making investment decisions. In closing, a few thoughts on retaining value. I’ve written about body corporate and landlord relationships and communication before so let’s focus on value as a mathematical outcome. In the somewhat esoteric world of economists and valuers there lurks the concept of the net present value of future cash flows. Put simply, mainly because that’s the only way I can, a future income has a value today. Put even more simply, your agreement top-up or
lease term extension has a real and tangible value. A 5x5 motel lease or a 25-year caretaking agreement is worth more than a 5x2 lease or 15-year agreements. Like any commercial arrangement or investment that makes you money, the longer you can lock in the income the more it’s worth. I reckon there’s almost never any real value in cheap and cheerful. You get what you pay for and if you don’t pay much you don’t get much. The trick is to determine how much you want to pay and what you are prepared to accept. If you don’t mind running out of oxygen at the top of Everest then surely the cheapest expedition will do. For me, a few extra bottles of air would be well worth a few more dollars spent. That’s value. PS : If you are a business borrower, here’s some unsolicited advice. Take a leaf out of the residential property sector and use this historically benign interest rate environment to pay off debt and build a rate rise risk buffer. I shall refer to this in future as the RBARRRB… there will be a test.
If we take the value concept one step further, we meet the elephant in the room. Yep, you guessed it, very, very cheap debt. Our domestic interest rates are at record lows so even at quite high multiples the value equation, seen through the prism of return on equity, is absolutely compelling. It won’t always be thus. At some point (don’t ask me when) rates will start to go the other way and value will erode. The cost of debt has a positive impact when rates are low and a double whammy when rates are high. As rates rise less people feel comfortable borrowing and those who do, have less money to
I would argue that if there is any real link with value it lies in quality, not price. In my mind the broader way in which we should be looking at value is inextricably linked to August, 2019 | ResortNews
MANAGEMENT
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THINKING MR
I want value… but what do I actually want?
INTONET
Selling to Millennials How often have you heard an advertisement which entices you to: "Buy this incredible foopdoey for a never-to-be-repeated low price now and receive not one, but two and because we know you want more we'll also include a set of steak knives for free." Much to my surprise I discovered just such an ad on TV and it really made me wonder why this technique is still being used after all these years. This was very much in line with web advertising in our industry, particularly when specials are being offered. Obviously, people still respond to such methods? Because my grandkids seem to have birthdays at an apparent, ever-increasing frequency, I decided to do some research on the effectiveness of advertising techniques and the most desirable format these days, just in case I was becoming a retrograde adviser. My research did suggest I was edging towards the Jurassic age because here is what I found: the world is very much a place for ‘age-grouping’ rather than a one- psychologicalsize-fits-all approach. Millennials hate ads but 58 percent of them wouldn't mind if it's from their favourite celebrity. Influencer marketing is a real thing, and it
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Influencer marketing and user generated content have become such significant parts of a modern marketing strategy Arvo Elias, Cybercons
has become far more important to Millennials than any catchy ad or commercial that big brands can come up with to promote their products or services. Millennials, in fact, are changing the entire face of marketing, and brands and businesses need to accommodate this new influencer marketing “thing” because Millennials are not to be ignored. They make up 25 percent of the population, are almost three times the number of Generation X and are also larger in number than baby boomers. According to the survey by Vice, they spend 69 percent of their annual income on a great life style, with food and holidays at the top of the list. Government data importantly reveals that they represent nearly half of the workforce and spend one in every three dollars of the total nation’s spend.
84 percent of millennials stated that they did not like traditional marketing and, what is more, they did not trust it. Does that mean the death knell of the "but wait there is more" type of advertising? Perhaps so, as they really aren’t viewing or listening to it either. They don’t watch traditional TV, preferring instead live streaming, video-on-demand on such platforms as Netflix and Anime. And YouTube is actually the most-viewed platform for video. In fact, another recent study from Defy showed that 85 percent
of their Millennial respondents regularly watch YouTube. The same study from Defy found that 58 percent of this group do not mind watching ads that support their favourite digital personalities. The majority, that is a whopping 80 percent prefers a 15-second pre-roll ad, while 53 percent will tolerate a oneminute spot. Up to 89 percent of respondents said that 5-second intros featuring a sponsor is mostly fine with them, while 87 percent approve of product placements in videos such as, for example, when
According to a recent study conducted by the McCarthy Group, MANAGEMENT
ResortNews | August, 2019
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abcm.com.au an influencer demonstrates a product or shouts out to a sponsor. Millennials want to be entertained. Brands that can enlist sponsorship by digital personalities who entertain, have a winning formula. Similarly, they want to be part of a cause. If, in their sponsorship, digital personalities can speak to a brand’s social responsibility or its support for an important cause, Millennials will not only be drawn to that brand but will be willing to pay more for a product or service. So, we can now start to draw some conclusions; Be relevant. Do not be a marketing robot. Authenticity is key. Now more than ever, people are looking for authenticity in content. That is why influencer marketing and user generated content have become such significant parts of a modern marketing strategy.
Here are some practices to consider: Use natural photos of real people. Eye tracking studies show that users tend to completely ignore stock imagery of “generic people." Avoid this without breaking the bank by utilising free, high-quality stock imagery websites. In the last couple of years, there has been an explosion of websites that offer Instagram and Pinterest quality photos. There is some really great content out there, you just have to seek it out. Use unique brand-themed illustrations. This is an effective way of giving your brand personality and improving brand memorability. Strategically choose themes that resonate with your audience. Nielsen August, 2019 | ResortNews
even did a study on global trust in advertising and identified themes that resonate with people based on demographic and geography. These higherlevel trends paired with your own consumer research can make for high impact marketing. Millennials will purchase based upon their “feelings” about a company, not on the hard sell of a product. The other “world” is that of influencer marketing, and it is powerful stuff. If millennials know that people they like and trust, whether friends, family, or digital personalities, support specific brands, they will support those brands as well.
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So, what is the key to effective marketing? Curiously and despite all of the above the formula has not changed significantly although definitions perhaps have. Be relevant. Don’t be a marketing robot. Authenticity is key. Nielsen even did a study on global trust in advertising and identified themes that resonate with people based on demographic and geography. This kind of information and your own market analysis can become a powerful combination. The psychology of the concept of "specials" still holds today despite a greater level of awareness of false ploys as the word still implies positivity, and also gives it a sense of scarcity which makes it seem more valuable than that which is the norm. So bear some of these points in mind when you refresh your advertising and website content. It seems that "steak knife" ads are for baby boomers.
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Still selling rooms?
Sell the experience… One of the most frequently uttered hospitality marketing catchphrases of recent years has been “selling experiences,” but while many marketers talk the talk, more than a few are a long way from truly walking the walk. After decades of touting their vast array of in-room amenities, fitness centres, pools and large-screen TVs, many marketers are still too self-indulgent and productfocused to recognise that it’s what happens outside of the property that really matters these days. Millennials are leading the way amid a rapidly growing consumer trend among all generations that places emphasis on spending money on experiences rather than material goods, and vacations are directly in the crosshairs of this purchasing revolution. Now more than ever, it’s imperative that hospitality marketers dig deep, review their digital marketing touchpoints and set a course of action for turning their property’s messaging from being productfocused to experience-focused.
Here are some key suggestions: 1. Position your venue as the epicenter of the destination. Modern travellers are increasingly basing their trip planning, research and booking activities around the destination in question, rather than searching for any specific accom brands in a given area. According to Google’s 2017 “The Traveller’s Road to Decision” report, destination-related keywords are the primary search terms consumers use when planning trips. (51 percent of the time when planning, compared to 31 percent usage of brand or specific website names.) That means your property’s location is your most appealing asset to new-era travellers. This goes far beyond just offering standard concierge services; try creating special themed
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destination packages that incorporate stays at the property with deals, tours and excursions to local points of interest, from museums and historical sites to artisanal shops and iconic eateries. That can also include favourite local pastimes. For example, most resorts would have access to a local surf school in order to offer guests the ability to sign up for surfing lessons while they stay. 2. Your advertising and website messaging should promise a unique experience. Building upon suggestion #1, be sure all messaging — website, banner ads, social — focuses on the unique experience your property provides. Play up the reasons why it’s best to stay at your resort to experience the location, aside from saving $15 per night with your competitor next door. One useful means of achieving this goal is to create a special page/section within your website for guests that’s devoted entirely to tips, itineraries and “insider” information regarding the local area, as well as any special corresponding experiences offered through the resort. Include invaluable tidbits like where to park for free, hole-in-the-wall spots the locals love, best hours for visiting popular attractions and ways to save money on admission fees.
You can also make this information downloadable/printable in PDF format, so guests can take it with them when they explore. 3. Showcase user-generated content (UGC) and review testimonials of past guests’ experiences. Social media has made UGC even more impactful than your own content, since viewers are more likely to trust the opinions and perspectives of fellow travellers than any corporate material they see on a branded website. So, by showcasing your guests’ UGC, you’re tapping into the underlying craving for authenticity and the all-powerful fear of missing out (FOMO), while also promoting your property more effectively than you could ever do on your own. But don’t just spend your time looking through past guest Instagram posts; it’s also useful to keep abreast of what your guests are saying on testimonial sites like Tripadvisor and Yelp. Beyond just viewing the feedback on your actual property, you can learn valuable information about what guests like best about your location and neighbourhood, as well as the useful travel tips guests have gathered on your locale. Repackage and integrate those insights into your own marketing materials and messaging.
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4. Change hotel imagery to focus on experiences, rather than amenities. No one wants to look at pictures of a pool or fitness room. Instead, show them images of the ideal experience you are selling them, whether its families frolicking along your hotel’s amazing oceanfront real estate, friends sharing a barbecue, spa-goers enjoying unique, signature treatments only available at your property, and/or compelling snapshots of the street-front outside the building, so guests can sense the excitement they’ll feel when emerging from the front lobby. Vacations and experiences are largely aspirational so demonstrate the types of experiences they’re likely to have. 5. Train guest-service personnel to know local unique experiences. It’s tough for you or staff to advise customers on how to best experience a destination if you don’t know it yourselves, so get out there and explore. Develop an information notebook and list the website pages of local information and tips you want your guests to know. Establish contact with nearby cafes, restaurants or entertainment facilities and negotiate a special deal that you can pass on to guests. Source: Tambourine
ResortNews | August, 2019
White, white or white... There’s something irresistible about the smooth expanse of a plush resort bed.
replacing the sheets, two of which sandwich and protect the quilt from contact, it saves time and money involved in purchasing and laundering expensive bedspreads.
The views from your room may be sensational, the artwork Picassoesque and the wifi lightning quick, but it’s the satin stripe bedding that really says ‘you’re on holiday’.
Cleanliness Triple sheeting also provides a sanitary environment for a clientele increasingly concerned with cleanliness.
Gone are the days of patterned coverlets with the whiff of suspicious fluids lingering within their weave. Today’s travellers lust after white, fresh and luxurious; whether they’re paying $100 or $1000 a night. And they’re so devoted to nights in white satin that the latest fashion is to supersize that soft, stripy whiteness to epic new proportions.
Luxe feel According to industry insiders, there’s a trend towards oversized linen on queen beds. It creates a luxe vibe and looks big and comfortable with a lovely overhang, so no-one is getting cold in the night because the covers don’t stretch over. A survey of 2000 people conducted as part of the UK’s International Hotel Show reflects that penchant for big beds and luxe bedding. The Perfect Hotel Bedroom Report showed the majority of respondents prioritising big beds over big rooms, with king and super-king beds being sought by a massive 89 percent of respondents. Those surveyed professed an appetite for ‘pure luxury’, even when travelling on a budget, but rated ‘vibe and feeling’ far more important than room size. Interiors blog Style Curator lists luxe accessories and opulent finishes which take inspiration from ‘old Hollywood’ as one of the year’s hottest trends – think grey velvet bed heads and rich, plush throws. That opulence doesn’t extend to mountains of scatter cushions, though. Accommodation houses are opting for fewer cushions that can be washed more readily, and August, 2019 | ResortNews
Bedding unlikely to have been washed since the days of A Country Practice – from grainy coverlets to yellowed bed skirts – no longer passes the guest smell test. White looks and feels clean.
Natural focus
guests say they are turned off by a plethora of pretty pillows. Just 11 percent of the Hotel Show’s respondents felt an urge to see numerous cushions adorning their accommodation beds. But while guests are opting for fewer pillows, they are becoming increasingly discerning about the ones they do want. Bob in Hanley’s Cottage may choose to rest his head on a brick, but Indira in the Calcutta Suite wants fluffy clouds - which is why pillow menus, once the domain of luxury hotels, are increasingly appearing in midprice accommodation houses.
Textural notes While ‘colour pops’ created by cushions, runners and artwork have long been the mode du jour, now texture and natural tones are in. An insider told ResortNews that to introduce colour elements, some accommodation houses were combining the triple sheet method with waffle-weave blankets to add texture and warmth. According to Style Curator, the latest look is named Nordic-coastal and is all about mixing textures and materials to create interest – a kind of Hamptons/Scandic mashup. Knotted rugs, hides, linen, rattan, timber and quilted or leather fabrics are all used to create texture over a base of white, sand, or grey tones.
Nature is an enduring design inspiration when it comes to accommodation, and the outdoors is touted as a major influence indoors this year. According to the Perfect Hotel Bedroom Report, guests are looking for a neutral palette paired with natural wood to help create a sense of cleanliness and peace when it comes to accommodation decor. The textural styling of NordicCoastal embraces natural elements as a central element of its light and airy Scandinavian feel. While dark wood mahogany features in glamour-inspired design this year, at the other end of the scale rustic wooden furniture and nature-inspired art, including fabrics featuring flora and fauna, are also inspiring current accommodation décor.
The triple sheet treat All of these trends, though, are dwarfed by the giant consensus – that white linen still rules supreme. Accommodation houses are using triple sheeting in ever-increasing numbers, while luxury homes and boutique hotels are stocking up on satin stripe doona covers. Triple sheeting allows accommodation providers to creating a luxurious-looking bed with three flat sheets and a doona, quilt or blanket. By simply
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As new materials and fabrics for bedding come into the retail sector, hotelmanagement.net reports that guests have come to expect similar products when they stay in hotels. For example, some high-tech retail bedding products do more than just keep guests warm at night. They draw moisture away from sleeping bodies and are designed with anti-microbial properties. The focus on hygiene means guest not only expect their white sheets to be sparkling fresh, but that those luxe throws and earth-toned waffle-weaves must be washable as well as beautiful. Cushion and pillow covers must be capable of a machine wash and the inserts themselves must also be made from a washable material, meaning foam is out. Aside from cleanliness, though, there are other advantages to white linen. For a soft upgrade, you only need to replace cushions and runners to create significant change – whether your bent is for luxe or Nordic-coastal finishes. And when it comes to housekeeping, cleaners will be singing your praises for the ease of bed changes involving only one colour, while commercial laundries are increasingly resistant to stocking and washing linen which is anything but white.
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Cashing in on the clicks “A good quality website acts as the shop window for the property, and a good one becomes a business asset and essential element of goodwill in the long-term.
By Trish Riley, Editor
Currying favour with a hotel or resort used to be a prized end destination and travellers had to demonstrate loyalty to brands in order to be rewarded. Today however, the paradigm has shifted. According to Brad Haines, regional vice president – Asia Pacific at SiteMinder, it’s accom managers who now need to show loyalty to travellers if they want to earn their business, and it starts long before they arrive at the door… Attaining guest loyalty, or perhaps something more akin to courtship, starts with knowing who the traveller is likely to be, what type of messaging they’re most likely to respond to, at what time of the day and in what format, as well as where they’re coming from, why they’re travelling and whether they have visited before. Ultimately, today’s traveller seeks both choice and personalisation, and accom managers who understand how to tailor the
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“Websites also need to be accessible on all devices, especially mobile phones,” adds Natasha. “Whether it be laptop or PC, or even tablets, the more accessible or reachable you are, the higher opportunity you have to capture direct hotel bookings.” guest experience from minute one, are in the best position to drive guest bookings directly. This means tapping into a plethora of technologies available to ensure that you have greater control over the booking process via your website, rather than through some other channel, and then fine-tuning their experience so that potential guests land on your website they are engaged with well thought out content, imagery and pricing, and it’s a simple process to go from looking to booking. Natasha James, general manager
of HiRUM Software Solutions says the first step towards having more direct bookings is to ensure your website is interactive and responsive, as well as a good reflection of the property. “Ideally, onsite managers should own their website and not rent it off a third-party provider. While it may seem the easiest option upfront - or it’s something that is inherited on purchase, it will invariably become difficult to control or update the platform when you need to, and you can quickly end up with a site that is outdated and ineffective.
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Mark Edwards from iEnhance agrees. “There are three main things to consider when upgrading or redesigning your website, audience, usability and search engines. There is no point designing only for desktop if your audience use mostly mobile. Demographics can also dictate imagery and colours that should be used. “Know what you want your website to do. It may be more important to have a functional website that performs well in search engines, rather than a custom design that can eat your marketing budget. ResortNews | August, 2019
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“Check your current analytics before you start your development to ensure that you know your market. We recently built a website that had an audience that was surprisingly nearly 70 percent iPhone users; it totally changed the way that we designed and tested the website. Usability should be addressed, as a booking should be as seamless and easy to make as possible, as few actions as possible. “Search engines should be front-of-mind when upgrading too, as not all websites are equal in the way they are put together. Some free packages come at a cost of code to content or can be slow loading. You should be thinking forward and trying to build with something that works with current technology, but also look to the future as much as possible,” adds Mark.
As first impressions are formed within seconds and since most of the information we consume and interpret is visual, quality design and compelling photographs can make your site and your brand stick in the viewer’s mind as professional and credible. Using professional photographs of your property, the apartments and amenities will help you market to a much larger audience. Photographs open your content up to a whole new audience through giving visitors the chance to share your imagery with friends and family.
Let your visitors know what you’ve got and what you offer to those who stay with you. Is it free wifi? Free laundry services? Or is it access to awesome recreational facilities? And don’t forget to highlight the activities and attractions happening in the nearby vicinity, including business and sports and entertainment as travel is not limited to just vacations.
Collaborate with local partners to garner links
Give your visitors a virtual tour
Use quality images If possible, provide a virtual tour of the property to your website visitors. Let them experience what it’s like to stay with you right from where they are - this will surely give them better reasons to book with you and push them to go to your booking engine right away.
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Highlight your amenities
Consider collaborating with local businesses for auxiliary services like dry cleaning, car rentals, floral, vegetable, poultry and meat supplies, catering services and business centres. It is a viable step to ask them to insert your property name with reciprocal links on the page that contains information about their clientele. These links could
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well be invaluable indicators of the fact that your website happens to be the official one.
Showcase reviews
Reviews pose as a key factor to help one zero in on the final decision. So, when potential visitors are checking out your competitors for their stay, show them different reviews of your guests telling about their stay with you. Or notify your visitor about the number of bookings made at your hotel today; giving them an assurance that your hotel is well known and accepted. Brad says” “Our data shows that online travel agents (OTAs) are now the most popular site for travellers to visit. They’re using it for research and inspiration but nearly two-thirds of guests prefer to book directly with the ResortNews | August, 2019
Digital Strategy and Website Design Websites that Rank!
property – this is the billboard effect. The benefit is you raise awareness from the OTA marketing your property, but the booking is commission-free.” Recent Google reports indicate that 65 percent of consumers who booked directly with a hotel online visited an OTA prior to purchase. In addition, Google found that over half of all travellers will visit an accom’s website after seeing it on an OTA. “Often ‘the billboard effect’ is diminished by frustration,” adds Brad. “Travellers make a shortlist of interesting hotels they find on the OTA and then
August, 2019 | ResortNews
check each hotel website for more information. If they don’t find the same room types, names, pictures, and policies they get frustrated and head back to the OTA. This is why it’s so important to treat your OTA profile like an extension of your own website so the offer you make to guests is consistent. “Be transparent with your visitors. Let them know what rates you sell your rooms at on the different OTAs you’re connected to. Have a price widget right there on your booking engine that will help them decide faster on booking directly with you.”
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Look – click – book The crux of the matter, is that no matter how accessible your website is or how great it looks, you need to ensure that you have a responsive booking engine blended with the website so that anyone from any device and any location can book with you easily. “When a traveller is investigating the idea of booking with your hotel, you should have an online booking engine they can engage with. One of the ways this technology will help drive direct bookings is through the use of deals and offers. When a guest clicks on your rates, use your booking engine to highlight hot deals, last minute offers, earlybird rates, or particular packages. This will create purchase impetus and give the traveller an extra incentive to buy,” adds Brad. So, now you have an amazing website – it’s mobile friendly, interactive and responsive and has all the embedded features that will impress and entreat potential visitors. But how do you ensure that it appears in all the right places?
would be followed up with a solid remarketing campaign, where you can continue to show banners to potential guests. You cannot control the first website a guest will land on, but you can control that they see yours more often.
“One needs to appreciate that despite the commission obstacle, OTAs effectively operate as your external marketing arm, and that they are spending hundreds of thousands of dollars reaching local and international visitors that you would never have been able to reach,” says Natasha.
“Google hotel ads is a program by Google that allows you to showcase your property directly in Google’s search results via advertisements. These ads connect with people looking for accommodation in specific locations. When they browse through the Google ads, they will see options to book with the property.
“The secret is to treat the OTA as in introduction agency; they may have brought the guest to your door but the onus, from the moment that booking is confirmed, is to take ownership of the accom/guest relationship and ensure that the next time they are considering a stay in your area, it’s you they call direct.” “Other advertising avenues that should be considered are Search, Display, and Social,” says Mark. “Search marketing consists of being the answer to someone's question or problem (where to stay?), Display helps you to stay front of mind when someone is making a decision of purchase, and Social consists of targeted campaigns that reach your direct market. “Search should absolutely be priority. In a perfect world, a good ‘search’ campaign (both organic Search Engine Optimisation (SEO), and Paid Google Ads
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“The beauty of digital marketing is that everything can be tracked,” adds Mark. “Google Ads for example, has great reporting as far as impressions, clicks, and cost per clicks. Add in ‘conversion tracking’ and you can easily figure out the cost per enquiry/acquisition. Once you understand that cost per acquisition, you can work out your conversion rate (how many enquiries make a booking?). From this point, you should know exactly how much it costs you to get a booking. A good Google ads manager will work over time to reduce this cost. Once the maths is right, it is simply a numbers game.”
to your hotel website,” says Natasha. “Accom marketing has grown by leaps and bounds through platforms like Facebook and Instagram but to ensure that you are reaching the ‘lowhanging fruit’, one has to really understand the demographics of who you are targeting – even the time of day that they are likely to be active. Build ads that are relevant to potential guests, integrate your booking engine with your Facebook page and let your fans book with you directly. “Where appropriate, one might also consider using influencers to boost your social media followers and property awareness. Identify a relevant ‘personality’ and for the cost of a complimentary stay and some VIP treatment you can reach a lot of people. “While web advertising, paid search and social media advertising are all reasonable options and should be part of the marketing mix, one of the most powerful options—
email advertising or edms —is often overlooked by accom providers, which means they could be missing out on valuable opportunities to drive engagement and revenue. “When happy customers leave the property, it’s not the end of the service. Keep in touch by sending special offers to happy customers on important occasions like festivals, long weekends, their birthdays and anniversaries. Incentivise them with special discounts to book online. Ask them to subscribe to your newsletter, and send them compelling newsletters from time to time and make them think about returning to your hotel,” Natasha adds. “OTAs are able to drive bookings for millions of properties worldwide due to their strong digital marketing play. You too can do that for yours. Just take a step, strategise and strengthen your online gameplay and start driving direct bookings to your own website.”
Make it social “Marketing through social media-based channels is an excellent tool for dominating search results and to drive traffic MANAGEMENT
ResortNews | August, 2019
The hidden costs of not having a facelift By Trish Riley, Editor
Just like humans, properties become old and tired-looking with age, so work needs to be done to give them new found appeal. Unlike humans however, properties can be more easily renovated and refurbished - several times over - through a range of cosmetic enhancements that ideally add more in perceived value than actual cost. Renovating or refurbishment is an active property strategy that gives people the ability to manufacture immediate growth in a property rather than adopting a passive approach that requires one to wait for capital growth but in the case of investment properties there is so much more at stake. Put quite simply, it’s all about return on investment. Depending on one’s motivation, one can make a profit on the renovation but you also increase equity through long term capital growth. The ultimate goal is to attract solid tenants or increase occupancy in short-term rentals, get the highest rental revenue and have minimal maintenance issues that detract from their August, 2019 | ResortNews
The ultimate goal is to attract solid tenants or increase occupancy in short-term rentals, get the highest rental revenue and have minimal maintenance issues that detract from their rental return rental return. There are also tax benefits for investors as they can claim depreciation. Speaking of the current refurbishment market, Lisa Biesel, operations and customer service manager of Home & Apartment Solutions says: “The accommodation market is becoming increasingly more competitive. There are a multitude of different offerings out there, development is on the increase and consumers are more savvy, and definitely more selective, about where their spend their leisure money. Travellers expect standards similar, if not better, to what they have back home. “Accoms need to make sure that the accommodation and facilities that they are offering stand out, particularly from properties within close proximity to them.
“Unfortunately, much of this stock is management rights-based, with resident managers having little control over the capacity or desire of the individual owners to keep their apartments up to a suitable standard. From an owner’s perspective, if occupancies are low or they are not “getting what they used to”, there is little motivation to spend more on the property – the investment goes on the ‘back-burner’ or worse, on the market and it becomes a self-perpetuating issue. “It’s a difficult ‘line to walk’ for resident managers,” adds Lisa. “They win (well everyone does) when they have nice properties in the letting pool, but there is often a perception that managers are always asking owners for money – whether it be for repairs and maintenance or an increase
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in charges to cover upgrades in services, but it’s also the manager who is on the coal face when guests are disappointed or when bookings and revenue drop off. “Some investors are older; they have retired and don’t have the disposable income to update their property while others simply don’t see anything wrong with the apartment – they have a similar environment at home.” It’s been proven time and time again that the value and equity of a renovated property increases by between 15 to 20 percent, while occupancies, and therefore revenue generated in a refurbished unit, generally doubles. If owners are able to review an actual project or see the results and values demonstrated from a case study in a property similar to their own, they will often see the benefit of investing back into the property. “Renovations are like running a business,” says Keith Farquhar, director of Make it New Renovations. “Refurbishments, particularly quick cosmetic renovations, are and always will be one of the safest, most reliable and least volatile property strategies that you can use. It offers investors the ability to add value, regardless of whether the property market is rising or falling.
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“The aim is to get the renovation done as quickly and efficiently as possible with insight into what buyers or renters want, and you want to do this while adding the most value possible at the least cost.”
Whatever the case, ensure that you engage with experts with a thorough knowledge of the industry when it comes to building compliance, insurance and working within a built environment.
Renovators also need to be diligent in keeping costs low to avoid overcapitalising on the property beyond the final value returns they will receive.
Renovations are disruptive at the best of times and keen attention to occupant communication and collaboration is as important as the rebuild itself.
“Before starting any renovation, the owner (investor or occupier) needs to think about the end result,” says Keith. “Are you renovating to rent or renovating to sell? Identification of this alone will intrinsically put you one step closer to understanding who the end consumer is and what changes may be required to add value in the mind of that audience. What changes can you make to a property that will add value in the most significant way?”
Keith says the best value for money comes from the least expensive cosmetic changes such as renewing or replacing damaged flooring, replacing old lighting fixtures, replacing the benchtops and handles in the kitchen and addressing window coverings.
Refurbishments vary from a basic freshen up – literally a coat of paint to upgrades of wet rooms, the installation of a furniture package or a phased-approach that addresses different areas over a period of time – right up to structural renovations that may or may not include body corporate involvement.
There are many ways to add real value to a property, but here are a few that can be made to a property with the minimum of disruption that will continue to deliver a high rate of return, time after time.
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“Focus on tenant needs, practicality, long-term durability of fixtures and fittings, and an appropriate level of style and quality to match the rental income of the property.”
A new paint job A new coat of paint is the easiest
and most cost-effective way to refresh the look of a property while boosting value. This investment alone would put the property at the top of the bookings list as the manager will always want the guests to enjoy their getaway in a bright and fresh environment. When renovating a smaller property, special consideration needs to be taken to achieve a space that is light filled and feels much larger and more inviting that it did previously - stay away from darker colours or colours you may like in your home. Neutrals are safe and lighter colours make the interior appear brighter and larger. “With renovations, neutral colours and finishes are king,” says Lisa. “While we’re happy to discuss current trends with our clients, we try to guide them away from implementing anything that is going to date. It’s far easier to bring colour into an environment through the use of soft furnishings – and easier to change when you tire of it.”
Updating the kitchen The area that provides the richest ground for differentiation is the kitchen. This area is the engine room, the pivotal hub of a property and will single-handedly
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add more value than almost any other room renovation. In an investment property, opt for a modern style that appeals to the majority not the minority of people, won’t date quickly and install decent fixtures and fittings relevant to your local market. The key to adding value through the installation of a new kitchen or remodelling an existing one is to increase the bulk and scale of the kitchen so it appears larger and of more substantial quality. “Remember, it’s easy to get carried away with all the latest bells and whistles, especially when it comes to appliances so exercise common sense and keep your underlying focus on your return on investment,” says Keith. “Always choose good quality products with sound warranties and service terms and work with local suppliers for efficiency.”
Simple swaps Bathrooms are the second most important room in a property and renovated well, will significantly improve the value of a property. Changing the tiles on the walls and floor delivers massive bang for your buck but if the room structurally has great bones, a great low-cost option would be to re-spray the tiles. ResortNews | August, 2019
If the vanity is outdated, replacing it will make a remarkable difference to the feel of the room while other affordable value-adds include replacing handles and taps and updating the fixtures like the basins, toilet and shower screen.
Colour me pretty Despite being a ‘holiday-let’ or ‘rental’, adding soft furnishings such as cushions, rugs and throws can make a big difference to the look and feel of the property. Update lampshades and consider some tasteful artwork and décor items. A sound design inspiration is that of a high-end expensive designer home with clean lines and a fresh feel. Bear in mind that your objective is to provide a comfortable yet simple and uncluttered holiday environment for guests to enjoy, and want to return to or refer.
Long-stay complexes Not all investment properties are beachfront apartments with weekly turn-arounds. Longterm or permanents are just as likely to need a refresh between tenants or prior to a sale, and all
of the recommendations apply. Depending on the configuration of the property and body corporate bi-laws, refurbishments are likely to be restricted to internal modernisation and potentially the upgrade of a deck, an external entertainment area and the landscaping. If permitted, window awnings may be replaced or a new front door with glass panels could be considered. Ultimately, a smart renovation that pulls the right emotional levers with tenants, guests or buyers can improve the value of a property significantly – this goes for common areas too.
Common areas It goes without saying that there would be little point in having beautifully refurbished apartments in a property that appears unkempt and run-down from the outside. Residential managers are tasked with the upkeep and maintenance of all common property and phased renovations of these zones should be kept in mind. It’s a well-established fact that
landscaping a property can lead to a higher return on investment, making it the perfect way to boost property value while improving appearance and functionality of outdoor areas. With the correct design, budget and construction, as well as a good balance between hardscape and softscape materials, landscaping can provide a greater capital return than any other type of property improvement. It also has the added benefit of improving overall lifestyle and allowing occupants to enjoy attractive outdoor areas that may incorporate features such as spas and barbecues. And don’t forget that if you have an investment property different tax rules apply, and as an investor you can claim a lot more than an owner occupier. In the eyes of the ATO, ‘You can claim a deduction for your related expenses for the period your property is rented or is available for rent.’ Items you can claim for immediately against your current year’s income include: •
Repairs to your investment property, specifically those,
‘to make good or remedy defects in, damage to or deterioration of the property’ •
Management and maintenance costs, such as advertising, body corporate fees and charges, cleaning, council rates, water charges, land tax, gardening, pest control, insurance (building, contents, public liability)
•
Interest on your bank loans and borrowing expenses
•
Travel expenses incurred managing your property
Major renovations, such as remodelling a bathroom, are classed as capital improvements by the ATO - and are claimed as capital works deductions. These cannot be claimed in the year you incur them. Deductions for depreciation and expenses incurred while building/ renovating are deducted over a number of years. This is done on a sliding scale, depending on when your property was built - and this is where you may need to consult the ATO guide to depreciating assets. Alternatively, get advice from a registered tax agent.
makeitnewrefurbs@gmail.com | M 0478 658 698 | 0478 762 492 August, 2019 | ResortNews
MANAGEMENT
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Queensland now offers WeChat CityExperience An innovative new ‘mini program’ within WeChat, China’s most popular mobile application, will provide a platform to showcase some of Queensland’s key attractions to Chinese visitors. The newly developed Queensland ‘CityExperience Mini Program’ is powered by content from Ctrip, Asia’s largest online travel company which has signed a Memorandum of Understanding with Tourism and Events Queensland. Tourism Industry Development Minister Kate Jones said users of the app would be able to make bookings and payments with the program through its back-end integration with Ctrip. “We’re working with the private sector to find new ways to grow our share of the international visitor market. This program will do just that,” she said. “This initiative will help to ensure Queensland is front-of-mind for millions of Chinese tourists looking to book their next holiday. “WeChat has a massive audience, more than one billion active monthly users, and we’re bringing Queensland content right to their phones through this new Queensland CityExperience Mini Program.” Ms Jones said the app would also help tourists to book direct
with Queensland companies. “This partnership with China’s largest online travel company means it will be even easier for visitors to make direct bookings with Queensland businesses,” she said. “This is about enhancing the travel experience for Chinese travellers and providing Queensland’s tourism operators an opportunity to connect with this market online.” Ms Jones said China was Queensland’s largest market for international visitors. The latest international visitor survey showed continued growth from China, with visitors spending $1.5 billion in the year ending March 2019 - that’s yearon-year growth of 27.6 percent. The program was developed in partnership with Tourism Australia, Ctrip and regional partners Tourism Tropical North Queensland, Tourism Whitsundays, Brisbane Marketing and Destination Gold Coast as part of the Queensland Government’s Connecting With Asia strategy. Federal Minister for Trade, Tourism and Investment Simon Birmingham said this was an exciting development for the tourism industry who will now be able to better interact with the growing number of Chinese visitors to Australia by using this hugely popular social media platform to help them design a unique travel experience.
Australia’s ‘smartest hotel’ is a game changer These days, you can’t get much for $150 when booking a hotel but this new concept will completely change the way you book your next getaway. A “world first” initiative involving a 40-square-metre shipping container, converted into Australia’s “smartest” hotel, has been developed to give travellers a taste of luxury without having to break the bank. The futuristic hotel has been launched by mobile phone company OPPO and aims to give guests a glimpse of what’s possible with the newly launched 5G network, The hotel, which will be travelling around Australia to locations that have 5G access, is the first 5G-powered smart hotel in the world. With a black matte exterior, the one-bedroom “hotel room” looks like a self-contained cabin with minimalist style furnishings throughout. For 40sq m, the space is more than adequate for a couple, with windows lining each side of the container. But the “smart” technology installed throughout the furnishings is what really sets the room apart from a standard hotel stay. The hotel is powered by a mobile phone
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TOURISM
device, which essentially acts as the “brains” of the container, powering the mirrors and television, the gaming suite and even the Google Home Hub installed throughout the room. For the gaming buffs, the hotel has a complete 5G gaming suite that allows users to experience the real-world applications of 5G. The new network, which launched in parts of Australia in July this year, means the hotel will only travel to locations where 5G is operational, and while capital cities are expected to see most of the 5G action first, both Telstra and Optus have indicated plans to stretch out to regional areas as rapidly as possible. “We know Aussies are excited for the arrival of 5G, so we’ve built the ultimate live-in experience for consumers to be able to fully immerse themselves in the advancements and innovations that come with the network,” OPPO Australia managing director Michael Tran said. “We look forward to customers experiencing our innovative 5G-powered smart hotel and see the real-life benefits of the new network.” ResortNews | August, 2019
Campaign generates $20 million for Gold Coast tourism A tourism campaign positioning the Gold Coast as the ultimate family-friendly holiday destination has generated an estimated $20 million economic return for the Coast’s tourism industry. Tourism Industry Development Minister Kate Jones said the $2.5 million ‘come and play’ campaign was all about capitalising on the Commonwealth Games where more than 1.5 billion viewers world-wide gave the Gold Coast the kind of exposure money can’t buy. Ms Jones said the results released showed more than 4000 holiday packages generating 21,000 room nights were sold during the campaign, with results still to come in from airline and theme park partners. “The challenge was always going to be converting that exposure into a win for the local tourism industry - today’s results show we’ve achieved that.” Ms Jones said the campaign had been delivered through a partnership between Tourism and Events Queensland, Destination Gold Coast, Village Roadshow Theme Parks and Ardent Leisure.
The Minister said a survey conducted as part of the campaign also revealed 84 percent of people agree that the Gold Coast is the theme park capital of Australia.
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“Half of the respondents surveyed said they intended to visit the Gold Coast in the next 12 months, so the campaign is set to deliver returns over the longer term for the Gold Coast’s tourism industry,” she said. “This shows that the key messages delivered by the campaign – that the Gold Coast is the place to come and play, whether at theme parks, on the beach or in the hinterland – have inspired families to book their next holidays here.”
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Destination Gold Coast CEO Annaliese Battista said the ‘come and play’ family-centric campaign repositioned the Gold Coast as Australia’s favourite playground. “The campaign’s extensive appeal saw interest convert into visitation, with bookings averaging 4.9 nights and the delivery of 86,500 leads to tourism businesses. “This investment resulted in $20 million uplift in economic return for the city and reiterates our ongoing commitment to the tourism industry.
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August, 2019 | ResortNews
TOURISM
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Global tourism hits record highs Tourism is on the rise. In 2018 there were a record 1.4bn international tourist arrivals, according to the World Tourism Organization (UNTWO), a rise of six percent over 2017. That doesn’t mean 1.4 billion people travel abroad for their holidays, as many people will clock up more than one trip. But it does mean tourism is playing an increasingly important role in the global economy. In 2018, it was worth about $1.7tn, or about two
is partly due to the rise of digital services. “The most recent development in the industry was a small revolution of online reviews and online bookings which reduced prices but increased satisfaction. Globally, France leads the way, followed by Spain, the US, China and Italy. The UK is the seventh most visited country in the world.
percent of total global GDP. Even the UNWTO is struggling to keep up, with current figures vastly exceeding expectations. In 1950 there were 25m international tourist visits,
Virtual tourism: the trend for wannabe travellers Imagine being able to have a peek into a unique travel experience while being miles and miles away from the destination. Tourism has us accustomed to comparing one offer to the next, and now new technologies have a bigger stake in this process. Almost as disruptive as social media, innovations linked to the digital world are now available to many tourism agencies, and consumers are being exposed to virtual tourism. Conceptualised as a marketing tool to influence consumers - both at the time they plan their trip, and in the decisionmaking process – virtual reality (VR) is particularly useful because it offers tourists access to information about the destination more accurately and reliably. With the addition of new dimensions such as ‘personal interaction’ and the representation of sensations, experts say the VR increases awareness, educates and even engenders a sense of
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respect for the destination and wannabe travellers are signing up for the virtual experience rather than the real thing. What began as a step-up from the printed travel brochure for future travellers to visualise destinations has evolved into a virtual tourism ‘experience’ in itself and some tourism companies are offering this type of 360º ‘getaway’ to their customers, with trip simulations similar to video games. Bringing this experience closer to home, Gold Coastbased Dreamworld have announced the introduction of a new virtual reality ride at Dreamworld that will have thrillseekers swooping, diving, gliding and jetting over iconic spots like Sydney Harbour, Surfers Paradise and the Barossa Valley.
rising to 166m in 1970, and 435m in 1990. The growth of budget airlines has made travelling more accessible while the growth of the global tourist industry
However, other regions are on the rise. Last year, trips to North Africa rose 10 percent, and tourism to sub-Saharan Africa and the Middle East is also increasing, as demand for unconventional destinations grows.
City in China to install microchips in bed linen to determine cleanliness If you’ve ever jumped into bed while staying at a hotel and wondered when the sheets were last washed, well, now you will be able to tell.
A city in China is giving tourists who stay at certain hotels and hostels a glimpse of how their laundry service works by embedding a microchip in bed linen that reveals the date of its last wash. Sources report that many people in China will often bring their own bed linen when staying in hotels because the cleanliness of sheets and towels is often not up to scratch. The chips will be scanned by people staying
at the hotels and hostels using the Wuhan Kunteng Laundry, which provide cleaning services. The water-resistant chip, according to Chinese state-run media outlet Xinhua, can be scanned by a mobile phone, which gives a QR code. Located inside the corner of each sheet or towel, the chip is also heat resistant so can withstand plenty of washes. It’s not the first time China has dabbled with technology to make a hotel stay better for guests. According to CNN, the Hangzhou Marriott Hotel Qianjiang and Sanya Marriott Hotel Dadonghai Bay have become the first of Marriott’s international properties to introduce facial recognition technology for check-in.
The ride is described as an “immersive live-action 4K adventure” which uses motion-programmed seating and special sensory effects to give riders the experience of “flying” over famous spots across Australia. Source: Tourism Review
TOURISM
ResortNews | August, 2019
THE LAST RESORT
The Santos Express Train Lodge:
On a fast train to nowhere
Halfway between Cape Town and Port Elizabeth, and right in the middle of the famous Garden Route of South Africa, nestles the seaside town of Mossel Bay; a bustling holiday resort in summer and the ideal retreat in winter. Mossel Bay is situated on a spectacular sun washed peninsula, embraced by the warm Indian Ocean and has a well-deserved reputation among the thousands of holidaymakers who frequent the area every year. Perched, literally, on a track that skirts the beach, the Santos Express Train Lodge is a genuine train situated on the Santos Beach in Mossel Bay with all cabins facing the sea. With the ocean so close, you really can’t beat its’ unbelievable position and exquisite views
August, 2019 | ResortNews
and an invigorating sea breeze keeps everything cool even on really hot days.
and units, all with spectacular sea and mountain views and hot, clean showers.
Opening its doors on December 1, 1994, the nine decommissioned coaches, similar in style to the Transkaroo first class that operated on South African lines during the seventies, were procured from South African Railways and fitted with the necessary plumbing and electricity.
In August 2007, a fire destroyed the train restaurant and offices (together with all the memorabilia and authentic train fittings) so a new restaurant area was built and the search continues to this day for artifacts to recreate the authentic Transnet train.
Originally, the Santos Express only provided accommodation, but due to its uniqueness and location, it proved very popular, especially with foreign visitors and it was decided that a restaurant was needed to complete the experience. The accommodation was upgraded and a bar and restaurant were added. Now the striking blue relic also features single, double, budget and deluxe compartments
When more luxury coaches were needed, two vintage wooden coaches called the Royal Suites built in England in 1919 and 1921 respectively, were acquired and they joined the prestigious fleet in December 2013. There are now four royal suites, all with ensuites and private sea view decks from where one can watch dolphins, seals and whales at play, and the colonial feel, authentic woodwork and attention to detail makes the facilities extra special.
TOURISM
The owners of Santos Express Train Lodge are passionate about trains and the preservation of the country’s rail history, and he’s more than happy to regale guests with stories from the train since 2001. The Santos Express has played host to many national and international celebrities who have stayed and dined there on a regular basis and won the Sanlam Top Destination Award for an Ungraded Lodge two years in a row in 2016 and 2017. As with the Royal Suites of Santos Express, the history of steam trains in South Africa is closely linked to Mossel Bay and it is, therefore, no wonder that Mossel Bay has become the biggest centre for restoring steam locomotives of all classes in the South African rail network. Enthusiasts from all over the world travel to the bay to see the real-life locomotives they’ve only read about.
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The Management Rights Formula: a unique how-to guide for success Participants within the management rights industry now have a venerable ‘how to’ guide for buying and operating a thriving management rights business with the launch of a book coauthored by Jessica Dong of SIRE Management Rights and a number of industry specialists, titled “The Management Rights Formula”. Replete with sound advice and strategies from eight management rights experts including Danny Little of MRAS Consulting, Jason Fu of
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Goldenwater Mortgage Services, Mike O’Farrell of MLR Services, Sylvia Johnston of HiRUM, John Mahoney of Mahoneys, Scott Lai of Q&T Accountants and JSY Capital and of course Jessica Dong and Richard Skiba of SIRE Management Rights, the user-friendly publication provides information on all aspects of management rights from purchase and operation through to sale. Developed out of necessity and from personal experience, Jessica realised that the industry isn’t lacking in good managers, but rather that there wasn’t a proven system (or formula) that would, when implemented, improve efficiencies, systemise processes and procedures
and utilise technologies to do all the heavy lifting required in running a successful business. She also realised that the secret to any successful venture is seeking out those who have prospered, and learning from them. She believes that the team she assembled share her vision to inspire and influence change, and to have a positive impact on the strata hotels, resorts, motels and the accommodation industry as a whole.
In that same spirit, Jessica has invited ResortNews readers the opportunity to attend any of SIRE’s ‘Prosper from Management Rights’ monthly events. Please use the QR code (below) and the first six to register will receive a free copy of The Management Rights Formula. For further information please contact SIRE on 0451 634 883, email info@mrformula.com.au or visit www.mrformula.com.au
Speaking at the event, Jessica gratefully acknowledged the support and efforts of the contributing authors, management rights owners and industry partners in helping to bring the publication to life.
EVENTS & APPOINTMENTS
ResortNews | August, 2019
Mid-year Christmas with a twist
While it wasn’t the piping hot turkey, glazed ham, mashed potatoes, cranberry sauce, and vegetables or Christmas pudding, the members of the Ladies in Management made merry at the much-anticipated, annual ‘Christmas in July’ event held on the Gold Coast.
Tucking into spectacular gourmet oriental cuisine, amidst tables festooned with decorations, the ladies had their eyes on the pile of ‘secret Santa’ goodies and couldn’t wait for the hilarity that came with hiding, swopping and outright stealing gifts from each other! As always, a wonderful afternoon of fun and networking took place and we look forward to catching up again the 21st August.
For more information about these industry events please email Marisa Millane on marisa.millane@freedominternet.org or call 0403 764 247.
August, 2019 | ResortNews
EVENTS & APPOINTMENTS
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at ARAMA’s inaugural TOP Awards The best in the management rights industry were recognised by their peers at the Australian Resident Accommodation Managers Association’s (ARAMA) inaugural TOP Awards 2019 held recently in Brisbane. Husband and wife duo Geoff and Tamara Hussin from Ivory Palms Resort in Noosaville, Sunshine Coast took out the first of the two top gongs, Resident Manager of the Year Award for Short Stay accommodation, while Michael Mitchell from Moda Melton in Nundah, Brisbane won the Long Stay category. With more than 150 industry participants in attendance, the awards, sponsored by AccomProperties and EBM Insurance, recognised the variety of stakeholders instrumental to the strength and success of the management rights industry which generates $55.5 billion to the Australian economy annually. Managing a resort with a short-stay letting pool of 93 apartments in Noosa, Geoff and Tamara Hussin have increased occupancy by 95 percent since taking over the management rights business seven years ago. “We had a successful building before this and thought Ivory Palms, which was underperforming when we bought it, would be a great challenge for us,” says Geoff. “With owners trusting us to manage their units, we have had the confidence to invest our hard-earned money back into promoting Ivory Palms Resort to visitors and subsequently increasing occupancy and returns by a big margin.” Geoff says boosting the performance of the resort
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has meant embracing new marketing strategies, and that none of it would be possible without their dedicated staff.” Long-stay award recipient Michael Mitchell, who operates a 78-unit complex in Brisbane’s north-east and manages an additional 30 external rental properties for investors, said he hoped to use the award to highlight the diverse opportunities on offer in the management rights industry. “I often tell people that management rights is the best kept secret because there isn’t too much out there that matches the lifestyle and income that it affords,” he says. “There are a lot of young people in good careers who can access finance and buy these types of businesses and build a lifestyle where they get to look after their own home and have some flexibility.” With experience as an assistant property manager as well as a landscaper, Michael said he had strong foundation skills before buying into the business just three years ago. Alex Cook from Resort Brokers and Tony Johnson from MR Sales were also named Sales Brokers of the Year and John Mahoney from legal firm Mahoneys was named Service Provider of the Year. ARAMA CEO Trevor Rawnsley said the awards initiative highlighted the professional skills, experience and opportunities within the management rights industry as well as its economic significance. “The inaugural Resident Managers of the Year have demonstrated the highest professional standards of management rights operators and we hope more people are encouraged by their success to participate in the industry.” EVENTS & APPOINTMENTS
ResortNews | August, 2019
2019
Winner
Long Stay Resident Manager of the Year
From Left: Michael Hart MP (Burleigh), Michael Mitchell (Moda Melton), Christopher Traill (EBM Insurance) and Eric Van Meurs (ARAMA President)
2019
Winner
Short Stay Resident Manager of the Year
From Left: David Crisafulli MP (Broadwater), Tamara and Geoff Hussin (Ivory Palms Resort), Christopher Traill (EBM Insurance) with Eric Van Meurs (ARAMA President)
August, 2019 | ResortNews
EVENTS & APPOINTMENTS
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From Left: Geoff and Tamara Hussin (Ivory Palms Resort), Tony Johnson (MR Sales), Trevor Rawnsley (ARAMA CEO), Alex Cook (Resort Brokers), John Mahoney (Mahoneys), Michael Mitchell (Moda Melton) and Eric Van Meurs (ARAMA President)
2019
Winner
Service Provider of the Year
John Mahoney (Mahoneys) with Stewart Shimmin (AccomProperties)
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EVENTS & APPOINTMENTS
2019
Winner
Sales Broker of the Year From left: Tony Johnson (MR Sales), Stewart Shimmin (AccomProperties) and Alex Cook (Resort Brokers)
ResortNews | August, 2019
Industry stalwart retires On 30 June 2019, Martin Punch retired as a partner of SPG Lawyers. This brought to a close a valued contribution to the advancement of the firm over many decades.
As an industry, we thank Martin for his invaluable contribution and wish him the very best for his retirement years ahead.
Martin first joined the practice known as Hill Collas Bradley and Short in 1970 and after the formation of Short Punch & Greatorix in 1974, Martin became a partner of the firm in 1977. Since that time, Martin practised exclusively in the area of commercial law. He developed a particular expertise in the areas of conveyancing, leasing and small business sales (including stamp duty and GST advice). Martin also became one of the leading solicitors in the emerging area of management rights transactions. He closely monitored and became specialised in the developing law for this particularly nuanced
Martin Punch
area of practice. Consequently, Martin became involved with a number of peak management rights bodies, including QRAMA and in later years, ARAMA. He frequently advised these bodies and presented to them in relation to changes to legislation and developments arising from common law decisions by the Courts. Martin has also been a valued member of the Gold Coast community. In 1977 he
co-founded BUSY Inc, at that time a not-for-profit organisation assisting long term unemployed Gold Coast youth. Martin remains the president of BUSY Inc, which has now become a commercial enterprise, with a multi-million dollar budget. Martin’s tireless volunteer work in this area, led to him being deservedly awarded an Order of Australia Medal in 1994.
Martin’s engagement within the community and his dedication to the legal profession will be missed. His contribution to the evolution and development of SP&G as a leading Gold Coast legal practice has been profound and has left the firm with strong foundations for its continued growth and development in the years ahead.
2019 ARAMA INDUSTRY EVENTS CALENDAR For registration and/or event information please contact us on 1300 ARAMA Q (1300 27 26 27), email national@arama.com.au or visit: https://www.arama.com.au/ BRANCH
EVENT TITLE
DATE
TIME
Brisbane
Management Rights Industry Training Program
Monday, 12 August 2019
8:30am - 4:00pm Riverside Hotel
Open
Gold Coast
ARAMA Industry Expo
Tuesday, 20 August 2019
6:00pm - 9:00pm Southport Sharks
Open
Sunshine Coast ARAMA Industry Expo
Wednesday, 21 August 2019
6:00pm - 9:00pm Maroochy RSL
Open
Brisbane
ARAMA Industry Expo
Thursday, 22 August 2019
6:00pm - 9:00pm Kedron-Wavell
Open
Gold Coast
Management Rights Industry Training Program
Tuesday, 10 September 2019
8:30am - 4:00pm Property Training Australia
Open
Melbourne
Training and Education Roadshow
Thursday, 17 October 2019
6:00pm - 8:30pm Campari House
Opening Soon
Airlie Beach
Training and Education Roadshow
Tuesday, 29 October 2019
6:00pm - 8:00pm Coral Sea Resort
Opening Soon
Gold Coast
Training and Education Roadshow
Wednesday, 6 November 2019 6:00pm - 8:30pm Kurrawa Surf Life Saving Club
Opening Soon
Sunshine Coast Training and Education Roadshow
Thursday, 7 November 2019
Opening Soon
Port Douglas
Training and Education Roadshow
Wednesday, 13 November 2019 6:00pm - 8:00pm Oaks Port Douglas
Opening Soon
Cairns
Training and Education Roadshow
Thursday, 14 November 2019
6:00pm - 8:00pm Brothers Leagues Club
Opening Soon
Brisbane
Training and Education Roadshow
Tuesday, 19 November 2019
6:00pm - 8:30pm The Colmslie Hotel
Opening Soon
Brisbane
Management Rights Industry Training Program
Thursday, 28 November 2019
8:30am - 4:00pm Riverside Hotel
Open
August, 2019 | ResortNews
LOCATION
6:00pm - 8:30pm Maroochy RSL
EVENTS & APPOINTMENTS
REGISTRATION
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Approvals slump reveals post-election ‘glee’ short lived Residential building approvals have hit a sixyear low, slumping 25.6 percent over the year as credit curbs continue to put downward pressure on the housing market.
Mellor said that the fiscal year 2019-20 should represent te trough for building. “It is not until mid-2020 that a suite of stimulus measures are expected to [facilitate] credit availability, reducing barriers to entry and boosting confidence.”
The largest decline was recorded in high-rise residential development approvals — buildings of more than 4-storeys — which collapsed 39.3 percent over the year to June. The ABS building approval figures were a much-awaited marker of whether the post-election pick up in post-election sentiment had translated “on the ground”. UBS analysts, led by economist
The good news is that the environment should propel the next upswing — with Mellor predicting the next construction peak within four years. George Tharenou, said that the residential construction outlook is still negative. “Building approvals are down 26 percent year-on-year and we forecast no recovery with
The letter calls for a national commitment to action on regulatory enforcement and compliance. The five groups — the Ai Group, Insurance Council, Property Council, Australian Construction Industry Forum and Master Builders — wrote that the property sector (“Australia’s largest industry”) is a “vital engine” of economic growth. “The economy must not be put at risk by the failure to provide certainty through a consistent approach in dealing with these issues,” the letter said. The news comes as a third Sydney apartment building came under scrutiny, with news reports stating that a Zetland block remains abandoned eight months after its occupants were
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“Australia’s dwelling stock deficiency will grow once again as rising undersupplies in Victoria, Queensland and Tasmania develop by 2020-21,” Mellor said.
BIS managing director Robert
Source: The Urban Developer
Sunshine Coast CBD feels the earth move
Urgent call for action on building reform The discovery of major defects in high-rise buildings across the nation has drawn attention to a “patchy and inconsistent” regulatory system, with five of Australia’s largest business groups calling for urgent reform.
dwelling commencements to drop to 170,000 this year. “We still don’t expect a sharp reflation given ongoing tight credit availability.”
evacuated over safety defects. The total cost to rectify the damages in the inner-Sydney block have left owners with a $5 million-plus bill. Strata documents showed that owners received a $1.7 million payout from their insurer — despite being covered for up to $9 million — and attempts to claim from the builder have come to naught. The five business groups said that regulatory inconsistencies have led to significant increases in insurance premiums, with insurers introducing strict cladding-related exclusions. “Building surveyors, engineers and architects are now struggling to obtain the insurance they need to do their jobs, which in turn could seriously affect future building or construction activity.” Master Builders chief executive Denita Wawn said that the building certifier insurance crisis has the potential to bring building activity to a halt.
Construction has officially kicked off at the new Maroochydore City Centre site, with the start of its first commercial building, the $30 million Foundation Place by local developer Evans Long.
The privately-owned eightlevel building, which will comprise office and retail accommodation, will be the first to emerge in the core commercial area of the Sunshine Coast’s new business centre.
Place, we are achieving a lot of firsts,” Evans said.
The 53-hectare site of the new Sunshine Coast's central business district will incorporate smart technology to create a “cleaner, greener city centre”. “It's truly rewarding to be part of the commencement of construction for the first commercial building to come out of the ground in what will be Australia’s most contemporary, sustainable and connected city,” Sunshine Coast Council Mayor Mark Jamieson said.
Evans Long partner Matt Evans said it was rewarding to see the project reach this point in the development process.
Foundation Place is the first privately owned building on the Sunshine Coast to sign a commitment agreement to achieve a Five Star rating under the National Australian Built Environment Rating System (NABERS).
“In delivering Foundation
Source: The Urban Developer
The Cottee Parker-designed project is expected to be open by mid-2020.
“The problem is already causing delays to building projects across the country and will only get worse as more insurers withdraw from the market,” Wawn said. Source: The Urban Developer
DEVELOPMENTS
ResortNews | August, 2019
Co-living operator to launch four new properties Singaporean co-living operator Hmlet has raised $55 million to accelerate its expansion along Australia’s east coast, with “immediate” plans to launch co-living properties in Sydney, Melbourne and Brisbane. The Singapore-headquartered Hmlet subsumed local operator Caper Co-Living into its orbit as it expanded into the Australia market earlier this year, taking over two Caper projects in Newtown and Marrickville. Since making its Australian debut, Hmlet has opened four co-living spaces in Sydney and has flagged plans for four more by the end of the year.
Hmlet said the fresh $55 million capital injection will allow it to expand its presence in markets with high-cost housing like Singapore, Hong Kong and Sydney. Plans to launch in Brisbane, Melbourne and Tokyo are also in the pipeline. The Series B funding round was led by Germany’s Burda Principal Investments with participation from Indian venture capital giant — and existing Hmlet investor — Sequoia. New investors in the latest round include Mitsubishi Estate Co and Westpac-backed venture capital firm Reinventure Group. The second round of funding comes less than a year after Hmlet raised $9 million in a series A round. Burda principal Albert Shyy
Hmlet
said he believes Hmlet is creating a product that addresses the changing lifestyle needs of today’s young working professional, which we are seeing globally. The sector has gained traction in Australia as an alternative to renting, with declining home ownership — falling to an alltime low of 66 percent in 2019 — and an increasing proportion of renters creating a prime
environment for the emerging asset class. ABS economist Bruce Hockman says the data shows that renters continue to devote more of their income to housing than home owners do. Hmlet currently manages more than 1,500 rooms, with a pipeline to expand into 10 cities across five countries within the next two years. Source: The Urban Developer
Tradies promised an extra year on beleaguered Jewel The chairman of Jewel developer Yuhu Group Jiquan “Jimmy” Huang has quietly sold his stake in its $3.2 billion Gold Coast and Sydney projects, three months after his billionaire father was exiled from Australia. The changes in structure come days after it was reported Jewel would not be completed for another 12 months, despite being flagged for a “mid-2019” completion. The project’s Chinese-backed developer Yuhu Group Australia has been quiet in recent months about progress at the triple high-rises in Surfers
Paradise, giving away little about sales, completion dates or the hotel operator but multiple sources can reveal: •
•
a year’s more work will be required on Jewel providing jobs for 600700 tradies, according to the Construction, Forestry, Mining and Energy Union (CFMEU); the luxury Langham brand will operate the Jewel hotel.
The site’s head contractor Multiplex has confirmed it had started interior design works.
on the map” and he had “every confidence” Yuhu Group would make it work financially.
get up and running, notch decent apartment sales and add to the city’s appeal. Gold Coast property guru Max Christmas said it had become an impressive landmark helping “put the city
“Multiplex completed the construction of the towers this month as planned and is undertaking internal fit-out works of the residences,” a Multiplex spokesperson said. “Fit-out works of the residential element is currently underway on site to ensure interior design excellence is delivered to the magnificent towers of the Jewel of Gold Coast.” While Yuhu Group is saying nothing about when it will open for residents, confidence is high Jewel will eventually
August, 2019 | ResortNews
DEVELOPMENTS
“It is impressive on the skyline and what it has done for the city in terms of wages, materials is fantastic. The prices will adjust to meet the market eventually.” The Langham has hotels in Sydney and Melbourne plus flagship properties in London, New York and the Middle East. This will be its first Queensland site.
QUEENSLAND WIDE
(07) 5443 5266 www.simpsonquinn.com.au Level 1, 13 Carnaby Street, Maroochydore
Management Rights Transactions Conveyancing and Property Law Estate Planning
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“Your Partner in Success” TOP MANAGEMENT RIGHTS OPPORTUNITY NORTH QUEENSLAND CONSIDER THIS TOP PROPERTY * TOP YIELD * REALISTIC MULTIPLIER RECORD TOURISM NUMBERS *LITTLE NEW COMPETITION
WONDERFUL PORT DOUGLAS
•
Exclusive 4 star Resort beautifully located in the quiet end of Macrossan Street.
•
Regal Port Douglas is one of the most desirable properties in Port Douglas.
•
Delightful mix of studio, one and two bedroom dual key apartments.
•
Cascading three story waterfall & fountain provides a great backdrop in the foyer area.
•
Rarely do properties of this calibre come along.
•
Large exclusive use office & two commercial areas, three bedroom Manager’s Residence.
* Net Profit $470,841 * Body Corporate Agreements 21 yrs * B/corp Salary $90,000 incl.
Manager’s Residence $550,000 MR Business $2,115,000 Price: $2,665,0000
Contact: Mobile: Phone:
Calvin Bailey LREA 0414 889 593 07 4059 1254
Email:
calvin@cbmr.com.au info@cairnsbeaches.com Postal Address: PO Box 266 Palm Cove, QLD, 4879
www.calvinbaileymanagementrights.com.au All information/figures are supplied by the seller and are subject to check by intending purchasers.
Australian Resident Accommodation Managers’ Association Member
JUST LISTED! New Exclusive Agency Listings Broadbeach Holiday Complex
Loads of Potential in Highland Park
• Well-presented complex in central Broadbeach • 200m to beach and short walk to shops • Easily managed with low maintenance gardens • Agreements through to 2037 • Pet friendly for the manager Exclusive Agent Warren Oliver 0416 216 625
Exclusive Agent Gerard Dixon 0433 617 515
ID8831
$125,000
$920,000
Neat Little Permanent
ID8869
$207,354
$1,600,000
Up Market Permanent
• Northern end of the Gold Coast, Oxenford
• Unique opportunity • Quality, well presented complex
• No set office hours
• Sought after Robina location
• No requirement to live onsite
• No office hours
• Located in high demand rental area
• Immaculately presented manager’s residence with water outlook
• 22 years remaining on agreements
Exclusive Agents Ian Forbes 0432 988 625 & Deborah Tilley 0424 428 489
Exclusive Agent Phil Trimble 0418 478 966
ID8389
• Permanent management rights with good income • $135,144 salary, minimum 4% increase PA • Close to shops and schools • Large 3 bed residence with private courtyard • Extra income available for handyman work
$54,000
$600,000
$129,620
ID8946
$1,200,000
SECURE YOUR FUTURE Beachfront Gem • • • • •
Solid and secure absolute beachfront building Major building refurbishment nearly completed Very strong return clientele All systems in place to facilitate handover 3 bed, 2 bath manager’s residence with ocean views
Listing Agent Phil Trimble 0418 478 966
ID8270
$184,000
$2,001,600
Committed Seller – Brisbane • • • • •
Edge of Brisbane CBD Great bolt on opportunity No real estate to buy, no requirement to live onsite No garden or pool to maintain 39 units with 17 in the letting pool
Listing Agent: Greg Jorgensen 0407 721 335
ID8878
MR Sales have an extensive range of listings Australia wide Visit www.mrsales.com.au to view them now or Phone: 1300 928 556 | Email: sales@mrsales.com.au
www.mrsales.com.au
$189,337
$852,000
www.accomproperties.com.au
Sales Report MANAGEMENT RIGHTS Gold Coast East View On Robina Woods & North Point Links
Fraser & Tracy Coop
Robina
TMR
Pacific Place Apartments
Michael Wood
Bilinga
RB
La Riviere
Luke Vaughan
Surfers Paradise
RB
Aquatic Terraces
Andrew Butler
Currumbin
RB
Jacaranda Gardens
D&T Realty P/L
Morayfield
TMR
Proximity
John Atkins
Redcliffe
TMR
Coolden & LIV4005
Ashford Assets P/L
Brisbane
MRS
Sixty Six Allen
Zestar P/L
Hamilton
MRS
Cleveland Terraces
Guang
Cleveland
CRE
Everton Grove
Billett
Everton Park
CRE
The Boatyard Bulimba
Warwick Donsky
Bulimba
RB
Vue
Highline Management P/L ATF
Brisbane
RB
Griffin Rise
Wei Qi
Griffin
RB
Gallery House
Aurora Assets Management Group Hamilton
Brisbane
RB
Sunshine Coast / Wide Bay / Fraser Coast Catalina Resort
Graham & Melanie Young
Maroochydore
TMR
Tingeera Apartments
Tingeera Partners
Hervey Bay
CRE
The Hastings
Holiday Management Noosa P/L Noosa Heads
Foreshore Apartments
CTTM Services
The Rise Apartments
Noosa Management Services P/L Noosa Heads
Maroochydore
RMS RB RB
North Queensland Agincourt Apartments
The trusted source for buying Management Rights, Motels and Caravan Parks from all the leading brokers.
Clifton Beach
Gerard Gallagher
Byron Bay
CBMR
New South Wales The Oasis Resort
RB
MOTELS & OTHER Queensland
1,000+
Salner Gardens
Mo
Chermside
CRE
Aspley Carsel MI
Thomas
Carseldine
CRE
Chermside Street
Foley
Teneriffe
CRE
Lees Hotel
Connell
Ingham
CRE
Augathella Palms Motel
Sharon Clements
Augathella
RB
Quality Regent Hotel
Wilpula Fernando
Rockhampton City
RB
Farmgate Backpackers
NAS Team P/L
Childers
RB
Acacia Motel
Gupta
Armidale
CRE
Barrakee
Biggs
Perisher
CRE
Park Beach Resort Motel
Swift
Coffs Harbour
CRE
New South Wales
Listings For Sale
Victoria Best Westlander Motor Inn
Amanda & Desmond Bolton
Horsham
RB
Quest Sanctuary Lakes
Nasim Bhuiyan
Point Cook
RB
Note: Agent/Broker involved in the sale is listed last.
www.accomproperties.com.au 46
John Assen & Sheree Paris
Agent - KEY: RMS - Resort Management Sales; CBMR - Calvin Bailey Management Rights; CRE - CRE Brokers; MRS - MR Sales; QTHB - Queensland Tourism & Hospitality Brokers; RBA - Resort Brokers Australia; RS - Resort Sales; TO - Tom Offermann; TB - Tourism Brokers; TMR - Think Management Rights; SC - Stratacorp. * In conjunction
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ResortNews | August, 2019
Same expertise, just better As the longest serving and only dedicated management rights agency on the Sunshine Coast, we are proud to announce the launch of our new company logo as part of the ongoing evolution of the company. Resort Management Sales has grown and evolved over the years, and while we have a well-respected brand, we felt it was time for a variation that better reflects who we are today as well as to symbolise our dynamic future. After careful consideration, we chose a more modern aspect of our brand that also effectively captures our history and commitment to the Sunshine Coast and the management rights industry. With more than 50-years combined experience in management rights sales, and over 400 sales between us, the team delivers
a unique mix of knowledge, experience and ‘old fashioned values’ that ensure a personal approach to every transaction. We believe we have the vision (and local knowledge) to match sellers, buyers and properties in an open and honest way.
While we’re showing off our new colours, here are some things you may not know: •
At RMS, every seller benefits from having three agents working for them as a team - dealing with one means access to the expertise of all!
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Our brand has extensive reach with effective advertising and SEO
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RMS have extensive contractual experience and a thorough understanding of what is required by all parties, effectively ensuring the best possible result for everyone.
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RMS have developed long-term, trusted business relationships with specialist
industry professionals over the years and therefore the ability to keep the contract ‘on the go’. •
RMS have been involved in the sales of some properties three or four times, and hold the record on the Sunshine Coast for the highest volume of management rights sales over the past four years.
•
We also hold the best conversion rate of “under contract” to “Sold” of any agency due to our experience in preparing a management rights business for sale and our extensive knowledge of the contractual process.
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RMS currently have eight properties under contract.
•
The ‘old fashioned’ approach of honesty, professionalism and integrity in the RMS operation is evidenced by the supportive friendship and support that exists between the partners across the client base – dealing with one means access to the expertise of all!
FOR ALL THINGS MANAGEMENT RIGHTS, PLEASE CONTACT:
Matt Campbell - 0410 343 219 matt@managementrights.com
Barry Davies - 0438 554 995 barry@managementrights.com
Lindsay Petty - 0407 029 138 lindsay@managementrights.com
Resort News Agent Profile:
Introducing... Jenny Zheng – Personal Profile As a pioneer in Management Rights operations within the Australian Chinese business community on the Gold Coast since 2007, I managed my own Management Rights business for 7 years. Since 2012, I have been actively selling Management Rights businesses on the Gold Coast. I have used knowledge acquired over the course of my last 12 years in the Management Rights industry to introduce this unique business model to many buyers who are keen to become a part of this rewarding and exciting industry. Maintaining my solid reputation and long-term relationships with both
sellers and buyers is my priority both during and subsequent to the selling process. Understanding each seller’s and buyer’s unique needs, quickly responding and following up with both parties from listing through to settlement is key to my success. In order to share reliable information, to both buyers and sellers, I have also conducted many sought-after Management Rights seminars on the Gold Coast.
Name:
Since settling down on the Gold Coast in 1998, obtaining a Masters Degree from Griffith University and commencing my Management Rights industry journey in 2007, I have witnessed significant growth in the popularity and take up of Management Rights businesses within the large and well qualified pool of Australian Chinese buyers.
Mobile:
0413 922 580
Agency:
Property Bridge
Servicing: Gold Coast Web:
propertybridge.com.au
PROGRAMME
MANAGEMENT
DIRECTORY
FOR RELIEF MANAGEMENT & POSITIONS VACANCIES
This months suppliers to the programme
MIKE McCALLUM Mb: 0417 716 385
ASTRID AND BRUCE MARTIN Mb: +64 2 7595 6650
ACCOUNTANTS & AUDITORS INSURANCE PAINTERS & DECORATORS
• Puma, Hirum, REI Master, Satin, RMS and Motelier Experience • Prepared to Travel • 15 Years as a Relief Manager • Previous Owner Operator of M/Rights
Husband and wife team with 10 years experience in property management
PEST CONTROL SOLICITORS
Area of Service
GC
BR
SC
WQ
CQ
NQ
GC Location Key: (GC) Gold Coast (SC) Sunshine Coast (WQ) West Qld (VIC) Victoria
(BR) Brisbane (NQ) North Qld (CQ) Central Qld (NSW) New South Wales
SOLICITORS SOLICITORS TRAINING & DEVELOPMENT
•
Available for casual relief management
•
Available from August 2019 onwards
•
Sunshine Coast area preferred
•
Very handy with maintenance
•
Knowledge of booking programs
•
Contact by email to selindenpark@gmail.com
Jenny Zheng
McAdam Siemon ProInsure Programmed Property Services Pest-Nett Hynes Legal Pevy Lawyers Short Punch & Greatorix Property Training Australia
All Preferred Suppliers have been recommended by other accommodation properties for their service and have qualified for inclusion in the programme. The next time you need to use a new supplier, why not make life easier and use a Preferred Supplier.
To advertise, call Gavin Bill on 07 5440 5322 or email service@resortpublishing.com.au To find a Preferred Supplier see the directory in the back of this issue © 2019, Resort Publishing. The Relief Management Directory is provided by Resort News to provide CONTACT details only of individuals and organisations promoting services in temporary and permanent management positions. Parties should satisfy themselves as to the competency and suitability of advertisers prior to ordering any services. We accept no responsibility for the standards of service.
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(07) 5440 5322
ResortNews | August, 2019
MANAGEMENT RIGHTS RESORTS VE
VE
I LUS EXC
I LUS EXC
SURFERS PARADISE
SURFERS PARADISE
ABSOLUTE BEACH FRONT
PARADISE ISLAND
We are proud to present for sale this stunning beachside high-rise holiday business. Great lifestyle combined with a handsome income. Reside in the lovely and spacious two bedroom, two bathroom manager’s apartment to enjoy the most of the coast. 20 years remaining on agreements with this upmarket management rights now offered in Surfers Paradise. The recent tasteful and extensive common areas renovations will also impress.
A new era is dawning in Chevron Island with construction of the Green Bridge, access to HOTA, Ferry Service and improvements to parks and lighting set to enhance the vibrant village lifestyle. Idyllic resort style permanent with sparkling lap pool, gym and well-maintained gardens. Delightful 3 bed, 2 bath, 2 car manager’s apartment. 25 years to run on agreements. High % of investors with popular mix of one & two bed apartments.
NETT $297,000 PRICE $2,376,500
NETT $84,000 PRICE $795,000
Bobo Qi 0438 027 771 bobo@propertybridge.com.au
Rhonda Perkins 0418 767 115 rhonda@propertybridge.com.au
VE USI L C EX
VE USI L C EX
WYNNUM WEST
MUDEGEERABA
BEAUTIFUL BAYSIDE
ROCK SOLID BUSINESS
This beautiful gated townhouse complex is five minutes away from the convenience of Wynnum Plaza and the waterfront. A lovely garden setting makes this well maintained community a pleasure to call home with the manager having a generously sized 3 bedroom townhouse combined with large fenced back yard. Generous body corporate salary of $67,000, annual 3% increases and 21 years remaining on management agreements.
Following a happy and prosperous 14 years in this business, it is now timely for the current very satisfied managers to retire. This low maintenance townhouse complex provides exceptional convenience with access to excellent schooling and Robina Town Centre. With long agreements in place and a supportive Body Corporate this adds real value for intending purchasers. This management rights business is a renter’s paradise and has proven the test of time since current managers purchased off the plan.
NETT $100,000 PRICE $930,000
NETT $153,000 PRICE $1,162,500
Jim Lowe 0403 418 115 jim@propertybridge.com.au
Jenny Zheng 0413 922 580 jenny@propertybridge.com.au
propertybridge.com.au | 1800 888 518
Tathra Beach House:
A rare opportunity waiting for the right people
to work with our broker now to find, and assist the right people to take over the business.
By Trish Riley, Editor
Speaking to Rob and Lesley White about Tathra Beach House and their future plans for this obvious labour of love is bitter sweet. The awardwinning accommodation destination is clearly so much more than a property; it has been their passion, business, family home and community for more than 30 years and now it’s on the market. Steeped in memories, the picturesque town has embraced the couple from the day they came to Tathra and rented a small shop, opened a café that evolved into a successful restaurant, to the expansion and opening of a gallery and gift shop, and then on to the development of the first stage of the Tathra Beach House Apartments in the late eighties. “Raising two boys, having an increasing commitment to the Bega Valley community and building the original six townhouses that front Tathra Beach in the early 90’s came with many sleepless nights,” says Rob. “When we first opened, our reservation system was a red diary on the counter and a pencil and rubber. Our advertising comprised of putting an advert in the NRMA Accommodation Guide each year and occasionally an advertisement in regional papers. We would also post brochures out to anyone who rang. Now we have mobile phones, computers, websites, online reservation systems, Expedia, Booking.com, Airbnb, and a plethora of social media.” The industry changes they have witnessed and at times encouraged, over the last 30 years, are a primary reason for the couples’ longevity in the industry. “We have loved being part of this dynamic and rapidly evolving
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“Management rights is rewarding, complex, delightful and sometimes challenging and we want to ensure the new managers are capable and knowledgeable about the sector, but more importantly that they are passionate and enthusiastic about being involved in the ‘people’ industry. “We thoroughly enjoy the area, the community and the proximity to the diverse attractions that this region offers, especially the amazing mountain bike tracks and the unique coastal environment. Being able to raise our two boys in such a wonderful area has been a highlight, and I would want all that for the new owners.”
Rob and Lesley White
industry,” says Rob, “and look forward to still being a part of it, albeit from the sidelines.” Rob and Lesley went on to develop and open the very successful second stage of Tathra Beach House with Kaye and Ian Murray in 2002 and won the first of five industry awards. The third and final stage of the development was completed and opened just a couple of years ago adding two accessible units. Rob said that it has been hugely satisfying to be able to accommodate guests with mobility disabilities so they can also holiday in beautiful Tathra. Superbly located directly opposite Tathra’s famous surf beach, the architecturally-designed one-, twoand three-bedroom apartments and three and four-bedroom villa houses are set among beautifully landscaped grounds featuring native plants, dry stack stone walls, handmade pavers, waterfalls and water features, swimming pools and spa pools. The manicured tropical gardens of Tathra Beach House are also home to many bird species including
Lyre birds, Bower birds, Bell birds and a multitude of colourful parrots that guests enjoy feeding from their apartment decks. The ponds feature beautiful Koi and children are encouraged to ask for special fish food to feed them. From time to time guests will also come across echidnas, goannas, wallabies and kangaroos within the gardens and close by. “It’s important to us to look after our beautiful environment,” adds Rob. “We generate our own power to heat and run the swimming pools, spa pools and water features and we have rainwater tanks to capture and reuse roof water for the gardens.” Now however, the two stalwarts of the Sapphire Coast tourism industry are contemplating more holiday time for themselves as they look to sell their business and open a new chapter in their lives. Rob says the decision to put the business on the market now makes sense: “We are still fit and healthy, but the business can sometimes be demanding. We would prefer
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Thinking of who the new owners might be, Rob and Lesley see great potential for further growth and success in the business. They also have a rare nugget that most management rights could never offer… being a selfdeveloped property, Tathra Beach House Apartments features a spacious, free-standing fourbedroom, beachfront home as the manager’s residence. It also has a stand-alone, street-front reception that separates the business from the family home. So, what is next for the inimitable couple? “When you spend close to 30 years building a business (and life) with the help of many people and some wonderful staff it becomes a big part of your life and I think we will miss it,” says Rob. Lesley says they will “definitely be staying in Tathra, but plan on spending time traveling and visiting their boys who now live in Griffith and Bicheno in Tasmania, as well as a fair bit of time in the Snowy Mountains”. For more information contact Neil Bourke, LREA, Broker, NSW M: 0447 448 824, P: 02 6495 2030, E: neil@abbrokers.com.au ResortNews | August, 2019
RESIDENCE
RESIDENCE VIEW
RESORT POOL
THIS IS WHAT THE HOSPITALITY INDUSTRY IS ALL ABOUT! The Property & Business
The Residence
This iconic NSW Sapphire Coast property is superbly located in the front row directly opposite Tathra’s surfing beach. The multi award winning property is set in beautifully landscaped grounds featuring two swimming pools, spas and water features. The varied range of accommodation options from motel style up to larger villa properties attracts strong leisure and corporate visitation. With 25 lots/28 keys and all properties under management, this is one of the larger coastal management-right situations in southern NSW. Supportive owners and committee make running the business rewarding and easier. While the current management couple no longer work full time in the business it is envisaged a committed management couple working full time in the business would net around $250k pa, including $70k + salary. The business is offered for sale at a realistic multiple of under 4. The conference room and commercial laundry are on-title and included in the business price! There would be opportunities to increase utilization of this facility.
More than a residence! A freestanding four-bedroom, two-bathroom family home, directly opposite the beach with stunning views. Ideal for younger or extended family who want more than the average small unit that comes with most management right situations. The Street Front Reception is on-title and included in the price! Not only does this high exposure stand-alone building separate the business from the residence, it also offers the unique opportunity to further grow the business to include off-site property management and real-estate services.
The Location, The Town, The Region Half way between Sydney and Melbourne on the coast, 2 ½ hours from Canberra and the snowfields. The NSW Sapphire coast is a growing destination for the booming Canberra market with the potential of capturing the new inbound international market flying into Canberra and the Sydney Melbourne coastal drive market. Close to Bega and Merimbula with daily airlinks to Sydney and Melbourne. Tathra itself is a beautiful coastal village, with a great community, excellent school options, world class mountain bike tracks, a friendly surf club and a fantastic place to live. Why not sell up in the city and escape to the coast!
Price Including business, residence, stand-alone street front reception, conference room, commercial laundry, $1,950,000 Neil Bourke, LREA. Broker, NSW. M: 0447 448 824 P: 02 6495 2030 E: neil@abbrokers.com.au
Spotlight on Northern New South Wales:
A region
coming of age to save money and enjoy the slower pace of life.” “For many people, running a short- term accommodation business does mean downsizing the family home. Many management rights businesses come with a unit, mainly two-bedders and for this reason, there aren’t many large families living the beachside dream – bigger families mainly opt for permanent complexes in more suburban type areas, that may offer a three or four-bed townhouse as a place to call home.”
By Trish Riley, Editor
Despite appearing to be a disparate region, covering everything from light industry and farming to the internationally renowned tourism magnet of Byron Bay, the northern New South Wales property market – and more specifically the management rights sector – is considered by those ‘in-theknow’ to be one that is slowly rising from a historically low base to one that is maturing and achieving equilibrium. Tony Johnson, a broker for MR Sales and Tourism Brokers is a firm advocate. “As a location - you have pristine beaches, wide rivers and waterways, beautiful rolling hills and well looked after state forests and national parks. Temperate weather includes warm summers without too much humidity and mild winters with cool, crisp nights. “And as
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a region, it offers some of the highest tourist occupancies in the country, attracting people from all over the country and overseas in their millions. Even the country towns like Casino, Lismore, Grafton, Nimbin, Kyogle offer beautiful countryside and friendly locals that make this a great place for couples and families alike to work and visit all year round. “Achieving some of the strongest tariffs in the country, the opportunity to purchase an accommodation business in this area and reap the rewards are endless and varied,” adds Tony. “Anyone purchasing a
management rights business in this region will be buying at a higher return on their outlay for the business than if buying on the Gold Coast, Brisbane or the Sunshine Coast, and they would also be saving money on stamp duty compared; this alone could save them significantly.” Confirming this sentiment, Col Myers of Small Myers Hughes says: “A lot of the management rights operators have come from Sydney, Melbourne or New Zealand with the lure of being their own boss and living the beach lifestyle. We are also starting to see more Queenslanders with experience in the industry heading south
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“From a commercial perspective there are apartment buildings and resorts that offer an onsite manager’s income ranging from $100K - $500K plus, in a number of beachfront or suburban options such as in Tweed Heads and Banora Point - close to major shopping, great schools and being on the doorstep to the Gold Coast. “There was certainly a major slowdown in the lead up to the recent federal election (as was the case everywhere),” adds Tony, “ but there is activity and well positioned holiday complexes with reasonable net incomes are selling reasonably quickly.” ResortNews | August, 2019
Seachange Opportunities Buy one or buy both
Side by side holiday complexes only 200m to the pristine white beach of Byron Bay
Complex One • • • • •
Complex Two
16 unit complex - 16 in the letting pool 8 x 2 bed, 8 x 3 bed units Low maintenance grounds, heated pool, BBQ Spacious 2 bed renovated managers unit No need to live onsite & no set hours
ID8202
$269,680
• • • • •
$1,822,000
Tweed Heads – Caretaking only • • • • •
Salary: $89,509
ID8197
$137,165
$1,198,000
Ballina – Views Forever
Well maintained grounds, pool, BBQ area Adjacent to shopping and golf course Renovated 3 bed, 2 bath managers villa Huge undercover patio area and private yard No set hours in agreements
ID7925
16 unit complex – 10 in the letting pool 9 x 1 bed unit, 1 x 2 bed unit Small footprint, minimal workload, only pool & BBQ Smaller 2 bed managers unit (in rental pool) Manager currently lives offsite
• • • • •
$798,000
41 unit mid-rise complex with 24 in the rental pool Majestic water views from many units Great onsite facilities for guests Low maintenance grounds, pool, gym, spa, BBQ 2 bed, 2 bath managers unit with private balcony
ID8545
$418,608
Coming Soon – Beachfront Seaside Village – $250K Net Profit Coming Soon – Beachfront Seaside Village – $920,000 Total Price These listings are being presented by ARAMA sales person of the year Tony Johnson, 0433 335 679 or email tonyjohnson@mrsales.com.au MR Sales have an extensive range of listings Australia wide, visit www.mrsales.com.au to view them now or Phone: 1300 928 556 | Email: sales@mrsales.com.au
www.mrsales.com.au
ARAMA TOP Awards
$2,498,000
Dan, from Sydney, bought The Crest Apartments in Byron Bay almost two years ago. He says he loves the laid-back, beach lifestyle and the eclectic mix of people who visit Byron every year. “You really get to see all dimensions of society on the beaches or in the pubs and clubs of Byron; you have everyone from overseas backpackers making their way around Australia and just checking out the surf to the North Shore Sydney executives, here to fulfill their childhood memories with their children on a beach getaway. I just love every aspect of running my own business and having time to enjoy all that Byron offers”. “There are a lot of empty nesters getting into the industry,” says Tony. “Couples who have raised their children and have decided it is their time to live and work together in a different location that offers a new opportunity. Couples come from all over to the Far North Coast but particularly from the southern parts of the country (Victoria or the greater New South Wales). They come for the warmer climate and to enjoy the country atmosphere.” Trudi and Peter bought a small motel lease from Tony earlier this year. They moved up from Bathurst and were looking to be closer to children and
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grandkids on the Gold Coast/ Brisbane but still wanted that country lifestyle. A cheap motel lease (low $300’s) gave them an opportunity to get a foot in the door and learn the ropes. They are enjoying the opportunity of working and spending more time together. Being their own boss also gives them flexibility in making changes, and running things the way they see fit. “If buying a leasehold motel, you can expect to get returns of 27-38 percent depending on the income of the motel and the location. Those in the coastal strip and being closer to the Gold Coast have lower returns but are in higher demand. The ones further from the coast (still only an hour or so) in the country towns offer higher returns. If purchasing a freehold your returns may more likely to be 13-17 percent ROI. Either choice can give you positive tax options and a great way of life,” adds Tony. Speaking specifically about the market in Byron Bay, John West of Beachside Apartments says: “Byron Bay is now the most expensive place in Australia to purchase a house, and locals who did not buy before the boom face the prospect of being forced out of the northern New South Wales tourist mecca. Comprised of 8000 inhabitants
and 2,000,000 tourists per year, the area continues to offer a mix of opportunities and planning problems requiring effective management. “The property component of management rights sales in Byron is disproportionate to nett profit,” adds John, “so sales to some degree require a purchaser with a desire to relocate to Byron Bay specifically. Sales continue to be quite strong, and despite taking a little longer and carrying slightly reduced pricing generally, the right properties at the right price continue to turn over quickly.” The Tweed Shire real estate market has experienced a slight easing in the past quarter but remains one of the strongest areas for both lifestyle and investment opportunities in New South Wales with the biggest moves in both the housing and unit markets. It is also where the only off-theplan sales are happening. The largest losses over the past quarter have come from Casuarina with units down 7.2 percent, Tweed Heads West down 6.8 percent and Kingscliff down 5.9 percent. Units in Banora Point and Tweed Heads South had the only positive quarterly growth of 1.8 percent and 1.7 percent respectively. There were mixed results for units over the past 12 months with Pottsville and Tweed Heads
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South making solid gains of 7.5 percent and 6.7 percent respectively, while Bogangar slipped down by 4.7 percent. First National Murwillumbah sales consultant, Paul Stobbie, said the Tweed real estate market remains strong with “very good sales results and strong buyer demand”. “There seems to have been a resurgence in confidence with investors returning to the market post-election and in light of recently announced interest rate cuts and a loosening of lending criteria from the big banks,” he said. “Prices remain strong in all sectors of our market despite a national downward trend with lifestyle changers continuing to relocate to the area from the big cities.” Mr Stobbie said there is strong demand in all sectors of the market. “Residential town listings in Murwillumbah continue to have very strong interest with a good mix of first home buyers, investors and lifestyle changers vying for property especially in the lower end of the market.” Elders Tweed Valley director and sales consultant, Craig Dudgeon, said prior to the election first home buyers and investors took a back seat. “They are back and looking for value,” he said. “Whilst our market has softened
ResortNews | August, 2019
Kingscliff on the Northern NSW coast
slightly, that adjustment has been driven by the buyers, primarily being more conservative in their assessment of what represents value, as opposed to 18 months ago when the market was being driven by an abundance of buyers active in the market place. “Lending constraints imposed by the banks have eased somewhat over the last quarter and the benefit of the stamp duty concession for first home buyers has encouraged sales for the lower end price range ($350 – $500k), which is a positive for many of our vendors.” “Younger buyers and investors are looking for a strong and stable return, while more mature buyers or couples downsizing often want to consolidate their finances with little or no mortgage and enjoy a comfortable home that offers a convenient low maintenance lifestyle, giving them more financial freedom,” he said. When asked about possible impediments to management rights sales at the moment, Col Myers says: “Developer’s lawyers in New South Wales have typically been the biggest impediment to the growth of the industry. They cost developers millions of dollars each year with their negative
attitude and advising them that they can’t sell management rights because they can’t guarantee that the agreements can be entered into. In NSW, long-term Building Management Agreements can’t be entered into during the developer control period. They can only be entered into after expiry of the Initial Period (where effectively 25 percent of the lot entitlement has to be sold and settled). The reality is that with proper disclosure in off-the-plan sale contracts, effective communication to the buyers and the fact that buyers don’t know each other and have not formed voting groups, it is quite easy to have the agreements passed at an EGM following expiry of the Initial Period. “The real estate licencing legislation in New South Wales is also currently under review by government and if the current proposals are passed, it will make it quite difficult for new operators to obtain a licence to operate their own letting business. ARAMA has been closely following the issue and has made representations to the NSW government that draws their attention to the difficulties that the proposed legislation will create and has suggested ways to overcome these difficulties.”
And in an area almost entirely dependent on tourism, when asked whether Airbnb (short-stay) is an issue/problem or opportunity in this region, Col says, “I see it as an opportunity for managers to increase occupancy. It only becomes a problem if it is not embraced – even if it sometimes means working with owners who are directly using Airbnb by passing over keys to occupants and doing room cleans for a fee.” “Airbnbs and OTA’s present all of the pros and cons in Byron that they do elsewhere,” adds John. “Unmanaged short-term stays disadvantage operators who have to deduct the cost of compliance
from their bottom line, and the consensus currently is that all operators including operations like Airbnb, Stays, HomeAway or any other OTA should be subject to the same regulatory and licensing regimes as real estate agents.” With a number of new developments in the region including the long-awaited Byron Bay town bypass, a $53m investment for stage 3 of the Lismore Base Hospital and $97m for the new Tweed Hospital to be built at Kingscliff, together with a very proactive migration initiative, both interstate and local, a cautious optimism exists for local management rights operators.
Peace of mind for your property decisions Management rights and unit valuations for all major financiers, presale advice and due dilligence for buyers
QLD - NSW - VIC - WA Gold Coast, Brisbane, Ipswich & NSW Far North Coast Tod.Gillespie@htw.com.au NSW North Coast & Hunter Martin.Gooley@htw.com.au Australia’s largest independent property advisory group
August, 2019 | ResortNews
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Welcome new reps to Tourism Brokers ANGUS COOKE (BASED INVERELL) Sales consultant: Lic REA and SSA M: 0437 949 113 E: anguscooke@tourismbrokers.com.au Service: Motels, and Caravan Parks Area: New England and North West NSW.
Experience: Angus has enjoyed concurrent careers in both the property sector as well as the hospitality industry. He originally entered the property sector in 2005, primarily in residential agency practice, as a sales consultant and licensee. More recently he has gained exposure to property valuation, with emphasis on commercial asset types. Angus is currently completing a Bachelor of Business and Commerce (Property) through Western Sydney University and will achieve Certified Practicing Valuer (CPV) status with the Australian Property Institute (API) at the end of the year. His career in the hospitality industry has extended for over 20 years. He is a trade qualified chef, having completed his formal training at TAFE New England, whilst employed at a highly regarded Armidale motel. However, he has more recently transitioned into motel operations, having managed the day to day operations of a busy motel on the Mid North Coast of NSW before deciding to relocate back to the New England district with his family. Angus is enthusiastic about the real estate and accommodation services industries and looks forward to adding value for clients, by drawing upon the diverse skill sets he has developed in each.
JAMES CARRICK (BASED PORT MACQUARIE) Sales consultant: Lic REA and Auctioneer M: 0498 965 005 E: jamescarrick@tourismbrokers.com.au Service: Motels, and Caravan Parks Area: Central and Mid North Coast NSW
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On the Bay Apartments:
A perfect island getaway Apartments it does however, all fall into place. Marianne is the personification of the calm and efficiently run property, which unlike most management rights, she manages solo as her husband has his own business.
By Trish Riley, Editor
One has to consciously remind oneself when viewing the quiet elegance and landscaped surrounds of On the Bay Apartments Bribie Island, that this is indeed a property catering primarily for shortstay or vacationing guests, as well as a few permanent rentals and some owner occupiers. The ambience of On the Bay Apartments is that of an undiscovered gem, refined and unexpected, speaking more to a boutique hotel or resort
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Marianne Mengel
than to a mix of 28 apartments – the majority of which are in the holiday pool. When one meets Marianne Mengel, the resident manager of On the Bay
Stepping into management rights for the first time five years ago after careers in teaching and doing fundraising and marketing for not-forprofit organisations, Marianne admits that right from the start she was determined to find an income opportunity located in a coastal area that didn’t involve commuting, and allowed her to work for herself. Marianne chose wisely. Directly overlooking the Pumicestone Passage and their ‘own’ little
PROFILES
sheltered beach, On the Bay is ideally located between Brisbane and the Sunshine Coast, and Bribie Island is the perfect destination for a holiday or weekend getaway. The property offers abundant bird and marine life including dolphins year-round. There is direct access for swimming, fishing, boating, kayaking and stand-up paddle-boarding, and kilometres of gently undulating pedestrian and bike paths as well as stunning views of the Glasshouse Mountains. It’s an easy walk to the local supermarket and shops; a flat stroll to Bongaree Jetty Precinct hosting cafes, restaurants and clubs and just minutes from two great sand-belt golf courses,
ResortNews | August, 2019
(the Pacific Harbour Golf and Country Club and Bribie Island Golf Club), as well as the patrolled surf beach at Woorim overlooking Moreton Island. Blessed with white sandy beaches, stunning national parks and magnificent waterways, the natural beauty and a number of renowned
wedding venues are the perfect ingredients for unique and romantic Bribie Island weddings and On the Bay benefits regularly from attending guests and those looking to experience the perfect island escape.
spacious, open-plan living areas, large picture windows with most offering water views and cool sea breezes, full size kitchens with modern appliances and sliding glass doors onto generous-sized balconies.
The apartments at On the Bay are all fully self-contained. Residential in style, they feature
All two and three-bedroom apartments are individually furnished and offer a master
bedroom with ensuite, spacious living and dining and fully equipped kitchen and laundry and all apartments feature flat screen TVs and reversecycle air conditioning. The complex also features a 10-metre saltwater pool with spa ledge, a central elevator and secure parking.
The Management Rights Lawyers BUYING/SELLING ASSISTANCE
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August, 2019 | ResortNews
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reviews,” says Marianne. “They usually reference our attention to detail, excellent customer service and cleanliness. Being a smaller business allows for a hands-on approach and we pride ourselves on being readily responsive to guests’ concerns. The property is consistently rated above 9.4 on Booking. com and 4.5 on Expedia.”
With everything looking picture perfect, it’s hard to imagine that Marianne has had many challenges at On the Bay Apartments, but I ask about her greatest achievements, and she is candid: “Getting my real estate licence was significant for me and I would encourage all resident managers, particularly of the smaller properties, to consider getting their real estate’s licence as a potential added revenue stream. “As the resident manager we are well-positioned to act as agents as we already have existing relationships with owners, a comprehensive knowledge about the complex, individual apartments and
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specific body corporate matters as well as greater flexibility to manage the marketing and sales process. The license also enables us to acquire additional letting appointments while
still maximising the letting revenue,” says Marianne. And what does On the Bay Apartments do differently? “I’m particularly proud of our
PROFILES
So, would Marianne consider management rights again, and what advice does she have for those thinking about getting into the industry: “Well, I’m not planning on leaving On the Bay Apartments any time soon,” says Marianne, “I love the property, the location and my role in the business.
ResortNews | August, 2019
10% discount “For anyone thinking about entering the sector however, I would strongly advise them to engage management rights specialists, particularly when it comes to legal and accounting. Trying to save a few dollars by using mainstream professionals may end up costing you a lot more in the longer term. “I would also recommend joining ARAMA, the official industry body that represents
for Resort News readers when booked direct*
the interests of those involved in management rights. It’s important to stay on top of what is happening in the industry, especially when it comes to legislation and compliance issues, and these industry bodies offer helpful workshops and seminars targeting current issues as well as excellent networking opportunities and access to experts in related industries.”
*subject to availability / minimum 2 night stay
Phone: (07) 3400 1800 Email: info@onthebay.com.au 131-133 Welsby Parade, Bongaree, Bribie Island Qld 4507
www.onthebay.com.au
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Surfers Chalet:
A big comfy family to have onsite managers that have embraced the property and management as ours have.”
By Trish Riley, Editor
It isn’t often when I meet with managers to chat about their property that I have the privilege of meeting one of the first (and still current) occupants of the 41-year old building, as well as being able to speak to the chairman of the body corporate who remembers running around the building site at the age of ten.
The onsite managers that Mick is enthused about are Carolyn and Garry Witt – new to the industry and taking on the property in November 2018, just one week before ‘Schoolies’ started. And if that wasn’t challenging enough, Carolyn says that when they purchased Surfers Chalet it was all run manually. Setting up the booking software, a channel manager and OTAs, while also settling into the property, was daunting and very challenging, but also exceptionally rewarding once she mastered it all.
Mick Innes is the said serving chairman and the son of Ian Innes, the original developer of the historical six-storey building that was considered “an absolute tower” in 1978. Mick remembers there only being one or two other multistoreys along the Esplanade, with The Sands and Focus being the largest. Back then, Surfers Chalet was built of white brick and had one lift, and he recalls sweeping and cleaning every unit while the builders were on site. And he laughs about the relatively narrow balconies. “The building was developed long before alfresco dining became trendy, but if truth be told, my father intentionally moved the marker for the rails to ensure the interiors would be as spacious as they are,” adds Mick. Opened in 1980, Ian presented Mick’s grandmother with a unit
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Onsite Managers Carolyn and Garry Witt
that she revered. “My grandmother loved living in Surfers Chalet,” says Mick, “she would walk along the beach every morning, and it was my favourite place for sleepovers as I could literally get out of bed and straight into the surf in the morning.” That same unit, which has never been rented, has been renovated a couple of times and is now the much-loved weekender for Mick’s Brisbane-based family.
He admits to being ‘particular’ about the property and how it is cared for. Having been on committee for 15 years, he has experienced the complete rendering of the building as well as an extensive recarpeting and repainting exercise ten years ago, and the instalment of new lifts three years ago. “Surfers Chalet is a great property, in a picture-perfect location,” says Mick, “and it’s wonderful
PROFILES
“During the first three months, Garry was also kept extremely busy with maintenance issues and bringing the building up to scratch,” adds Carolyn. “He has also managed to build a new reception area, renovate the managers apartment and create a number of ‘beachy’ artworks for the refreshed common property zones.” One would think with all this going on that the personable couple have had a lifetime of experience in hospitality, but Carolyn has a background in sales and admin as well as overseeing their other business that Garry runs which is a building and pest inspection company. So why management rights? Carolyn says that Garry had always wanted to go into management
ResortNews | August, 2019
rights and she was tired of the excessive driving she was doing for work, so the idea was hatched and they started looking for properties. “We fell in love with Surfers Chalet,” adds Carolyn. “It’s an older building but offers everything we were looking for. Surfers Chalet is a mixed property of holiday, long-term and owner occupiers in a range of studio/ hotel rooms and one-, two- and three-bedroom self-contained apartments. External facilities include a large outdoor pool with heated spa and a Swedish sauna. The property also features a spacious and bright manager’s unit that has plenty of room for the most important member of the family (and security detail), their beloved Labrador, Barney. Ideally situated just moments from the beach, close to a park with a children’s playground and BBQ’s and almost opposite the Northcliffe Surf Club as well as just an 8-minute walk into the hub of Surfers Paradise, Surfers Chalet is close enough for guests to participate in all the fun and then to relax in a private and more
tranquil setting. Not that they plan to rest on their laurels. When asked about future plans for the property, Carolyn happily shares that they have a great relationship with the committee and body corporate who have indicated that they are very pleased with the work they have done since arriving. “There are a number of projects that have been identified, but like all things, it’s a process. “In addition to trying to modernise some of the apartments, we will be working hard to attract new visitors as well as welcoming back our many repeat guests,” says Carolyn.
to their rooms and explain about the area and what’s on offer and know every guest’s name. By the end of their stay we always feel as though we’re saying good-bye to friends or family as we get to know them so well. Surfers Chalet is like a big, comfy family.” Being so new to the industry I wouldn’t normally ask how they feel about management rights or if they have advice to offer newbies considering a purchase, but Carolyn and Garry seem to have this complex operation in hand.
“Management rights is a great industry to get into if you love meeting and dealing with people from all walks of life,” says Carolyn. “If however, you are brand new to the industry like we were, then give yourself time to adjust. We were told it takes about six months to settle in and I have found this to be true. Treat your guests with kindness and respect and keep you listening ears on all the time. Attend to any guest issues immediately and make your place their home away from home.”
And it appears from the multitude of enthused and complimentary reviews, being listed as a ‘Super Host’ with Airbnb and taking the Booking.com rate to 9.4 that they are already doing things right.
Proud to be the preferred painter for
So, what I ask is their secret? “We both love the people-side of this business,” says Carolyn. “We enjoy meeting new people and helping to make sure that their stay is as relaxing as possible. We write to guests regularly, always personally escort guests
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August, 2019 | ResortNews
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• New Chairs • Tables • Sun Lounges • Umbrellas • Cushions & Accessories • Prompt Service Guaranteed REPAIRS - RESLINGS AND SUPPLY OF REPLACEMENT SLINGS TO P.V.C AND ALUMINIUM OUTDOOR FURNITURE
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0448 813 090
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0418 765 257
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coastalcasualoutdoors@gmail.com VISIT OUR SHOWROOM AT: Unit 4, No. 2 Cnr Captain Cook Drive and Kendor St, Arundel, QLD
Paul Grant 0448 417 754 paul@mikephippsfinance.com.au Cameron Wicking
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ResortNews | August, 2019
info@kudosfurniture.com.au
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Need assurance when looking for insurance?
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August, 2019 | ResortNews
The sign of an Industry Specialist.
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PREFERRED SUPPLIER DIRECTORY
Calvin Bailey LREA
0414 889 593 calvin@cbmr.com.au
Alex Barker-Re LREA 0414 835 128 alex@cbmr.com.au
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Specialists in management rights Off the plan sales qld & victoria Buying or selling best advice Rod Askew 0411 758 236 (QLD & VIC) Eric Brizuela 0413 060 683 (QLD) Philip Robison 0410 663 111 (VIC) Nationwide: 07 3554 0040 Email: sales@rcabb.com.au
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The Management Rights Specialists
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ASBESTOS REMOVAL QUEENSLAND WIDE
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1800 766 366
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Matt Campbell 0410 343 219 Barry Davies 0438 554 995 Lindsay Petty 0407 029 138 contact@managementrights.com
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SOLICITORS
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RIGHTS AND MOTEL
EXPERTS EXPERIENCE COUNTS We have the largest team of specialists across Queensland and New South Wales, covering management rights and motels businesses.
GET THE RIGHT ADVICE Don’t put your accommodation industry investment at risk. Our industry knowledge is second to none.
CONTACT US Receive the best information. Subscribe today to receive continual practical, useful and relevant content.
Think – Buying or Selling Management Rights Narelle Filmer 0459 229 744
Wayne & Linda Stoll 0452 181 505
www.thinkmanagementrights.com.au
Supporting and servicing the needs of both buyers and sellers of management rights throughout Tropical North Queensland PO Box 1037 Gordonvale 4865 • P 07 4056 6366
info@resortsales.com • www.resortsales.com
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(07) 5343 1000 Ask for Natalie
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The sign of an Industry Specialist.
PREFERRED SUPPLIER DIRECTORY
ResortNews | August, 2019
The sign of an Industry Specialist TV & VIDEO HIRE/REPAIRS
Heat Pumps
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with the same great
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20 Personal Service. Trusted Advice.
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Gold Coast: (07) 5592 0266 w w w. L M g o l d s t a r. c o m . a u
VALUERS - REAL ESTATE
SPECIALIST EXPERIENCE IN MANAGEMENT RIGHTS Short Punch & Greatorix Cnr Bundall Rd & Crombie Ave Surfers Paradise PO Box 5164, GCMC, Bundall QLD 9726 Fax: 5539 8745 Email: mnp@spglawers.com.au
MANAGEMENT RIGHTS VALUATION SPECIALISTS
Call Martin Punch on 5570 9304
CERVETTO COURTICE
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Buying or selling
Australian Valuers have proven to be the No.1 choice for this highly specialised work. Our valuation team operate on a national level providing advice to the majority of Australia’s Banks
australianvaluers.com.au mlr@australianvaluers.com.au 1800 664 094
Renewing or reviewing Negotiation and dispute resolution
Michael Kleinschmidt Legal Practitioner Director
www.stratumlegal.com.au info@stratumlegal.com.au
PH: 07 5406 1280
Leading Sunshine Coast Law Firm Flood Legal offers all the experience & expertise of a big firm while delivering accessible, personal & affordable service that comes with dealing with a small firm
Need advice regarding: • Buying / Selling • Legal due diligence reports • Variations including top up of term • Renewals/Extensions • Management & Letting Agreements • Body Corporate Issues • Off Plan Developments
Call Sharon Flood, Director - 0459 070 871 or 02 6674 5118 sharon.flood@floodlegal.com.au - www.floodlegal.com.au
SWIMMING POOL SUPPLIES/REPAIRS
1800 080 349 www.propertytraining.edu.au
Get it right the first time…call
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PHONE: 07 5535 6161
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August, 2019 | ResortNews
Reward your best suppliers by nominating them for the Preferred Supplier Programme. Simply send their details with a short testimonial to: psp@resortpublishing.com.au or call (07) 5440 5322
They’ll thank you for it!
PREFERRED SUPPLIER DIRECTORY
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