HM Q&A: RACE TO THE TOP

RACE TO THE TOP

AT AHICE 2022, OUTRIGGER CEO JEFF WAGONER SPOKE TO JAMES WILKINSON ABOUT HIS AUSTRALIAN PROPERTY WISH LIST, TAKING RISKS ON COMPLICATED DEALS, AND THE COMPANY'S MISSION TO BE THE BEST.

As a resort brand, with properties in some very remote places, how important is sustainability?

Through our program OZONE (Outrigger’s zone), we’ve been focused on conservation for a long time, supporting coral reef preservation and so forth. But the bigger element here, for us anyway, is the rising sea level. Asa premier beach resort brand, it’s honestly hard to get your head around. I was at a conference recently where someone started talking about different countries that will be underwater in the future. It’s tough to have that really sink in and think about how we can do something now it’s going to make a difference in the future, but it matters.

Outrigger plans to grow its presence in Asia Pacific

In Hawaii for example, they have started to drawboundaries in certain places around all of the islandswhere you cannot develop. If your asset becomesdamaged inside those boundaries, you cannot recreatethe asset in that particular location. That’s how importantconservation and sustainability are. This isn’t just aboutsingle-use plastic bottles or straws, it’s literally about thesustainability of our planet for the future that we all needto be involved in.

You’ve just acquired a hotel in Kona, Hawaii. When you are acquiring these assets, what kind of sustainability initiatives do you have in place to be one step ahead?

We really try to look at authenticity in developing resort experience. In Kona, for example, KingKamehameha III was born on that property. We want to learn into the history of the places that we operate in, so we’ve been able to develop – in each one of the properties that we have – a playbook of how to go in and research the market to find out what happened on the land and who was there before. That’s so important to us in the curating of each asset that we have.

Jeff Wagoner, Outrigger

When it comes to new markets, Australia is very high up on your list. What kinds of areas are on your wish list at the moment?

Australia is certainly high on Outrigger’s wish list. We actually hired the global consulting firm McKinsey during the pandemic to do some research to understand the customer is looking for different things in the future. Through that whole process, we learned that we need to evolve, and we need to change. We learned that the consumer across the globe said that if you can walk to the beach, you can call that a beach property – so that’s what we’re looking for today. We’d love to be ‘toes in the sand,’ but if we can’t, that’s fine too. Australia is high on our list, Bali is high on our list as well, and then a lot of the Hawaiian Islands, we’d love to be able to grow there. We’ve got 26 properties already in Hawaii, so we’re really concentrating outside of Hawaii in Asia Pacific and the Australia market.

We’ve seen a lot of investment from KSL into the business since they acquired it. They have really gotten behind the company to drive it forward.

Outrigger recently purchased a five-star property in the Maldives

Absolutely. Outrigger is spending US$320 million right now on renovation projects across the entire portfolio. We’ve just bought a five-star property in the Maldives and six months ago we bought three new properties in Thailand as well as a 22-acre resort in Kona. We’re now looking at three additional beach properties, so probably nine to 10 properties over this last 12-month period. That’s a lot of investment in the company and we look forward to continuing to grow with our mission to be the premier beach resort brand in the world.

Where else do they want to take the brand?

We’ve talked before about the US mainland, which is obviously one of your biggest source markets. McKinsey does geospatial work, where they examine cellphone pings to determine where travellers go in certain locations. Everybody from the US mainland that travelled to Hawaii had a cell phone ping; when they went back to the US mainland, [McKinsey] looked at where else they had a ping in the resort market to determine where we should grow. We learned that the first place they went to after Hawaii was San Diego, the second was Miami. And so, we are looking in Southern California and we are looking at Miami. Miami would be an awesome launchpad into the Caribbean for us, and we’re also looking at a property right now in Cabo.

Outrigger has been pushing further into Asia as well. Now that Thailand has removed all travel restrictions, how confident are you in the resurgence in travel at the moment?

Travel into Thailand has been a little slow to return. Back in 2018, the traveller from China going into Thailandslowed, and then the second highest geo source going into Thailand was from Russia. Thailand is coming back a little slower than we anticipated.

At Outrigger’s Fiji resort, guests can grow coral during their stay

We bought three properties there, as I indicated. We’ve renovated the properties in Phuket and Khao Lak – both of which are serving guests today. Our KohSamui property is still under renovation; we’re going to open that on August 1st. The slowdown gave us the opportunity to close resorts to completely renovate them and reopen under the Outrigger standards.

How many properties do you think you’ll bring on in the next two years?

I think Outrigger will bring on 10 new properties in this last 12-month period. If we do three to five a year for the next four years, I think that’s probably healthy and manageable for us as a company. We have plenty of investment capital to be able to go out and do it, it’s just a matter of finding the right assets and bringing them in.

Almost every one of the properties that we [signed] over the last year was a complicated transaction. When a property is halfway done and you’ve had concrete sitting for two years – that’s complicated, and it’s risky. We’re willing to take a little bit of risk to get the property that we want.