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Tourism and hospitality

BRI Ferrier’s tourism and hospitality industry experience includes work with accommodation and leisure related property, hotels and motels, resorts and tour operators, catering companies, restaurants and bars, as well as their advisors and other stakeholders.

We are familiar with the sector’s specific challenges, such as skills shortages, world economic events, currency fluctuations, high taxation rates, an increasingly globalised marketplace, fuel cost volatility, security and safety issues.

KEY PEOPLE

PAST EXPERIENCE

Integrated resort

A 150-room hotel, residential estate development and significant resort and leisure facilities had been under varying forms of formal administration for over five years. The hotel and some leisure facilities had been under management by a major international operator. The property had failed to sell and was subject only to offers on a ‘distressed sale’ basis. BRI Ferrier was appointed to improve returns from a sale of the property. As a precursor, this involved placing the strata title operations on a sound footing, a trading review, a critique of sales and operations, recommendations for improvement of sales and operations, and monitoring the implementation of such improvements. After 18 months, the trading improvements resulted in the property becoming increasingly attractive to mainstream investors. A contract for sale was settled (representing a 40% increase in realisation from the previous distressed sale offers).

Maritime transport operations

BRI Ferrier was appointed to undertake pre-purchase due diligence on the merger of two major ferry and passenger transport operations that serviced an island tourism trade. We conducted extensive investigations into transaction risks, the validity and longevity of operator permits, the likely ongoing savings from the improved scale of operations, reduced overheads and reduced competition offered by the intended merger. We also conducted a detailed review of the proposed merged entity’s business model.

Apartment hotel

BRI Ferrier was appointed to review the trading, cash flow and value potential of an apartment hotel trading with management rights tenure and short-term guaranteed return obligations to owners. The review identified trading opportunities and risks, short-term and long-term structural issues, the commitments of the manager, and valuation realities. The secured financier was able to structure its commitment to continued support in light of the review findings.

Motel and conference centre

BRI Ferrier reviewed the operations, trading and marketing of a significant leasehold motel and conference centre. We provided recommendations to the operator and secured financier for improvements to operations warranted as a result of changes to operating and economic conditions. We provided advice to the secured financier in relation to likely valuation and security issues. We also negotiated, on behalf of secured financier (and indirectly for the lessee), with the landlord.

Four-star management rights operation

Over approximately eighteen months, BRI Ferrier resolved real estate license and regulatory issues for a distressed four-star management rights operation. We conducted a fraud investigation, managed the pool of units and traded the business. Trading benefited from a review of operations and sales activities, including re-establishing an online sales and distribution presence, concentrating effort on identified specific target markets and recommending that unit owners revise the letting agreement.

Hospitality business

BRI Ferrier was informally appointed to liaise between a lender and its client, who was the owner of a successful hospitality business and a commercial real estate portfolio. With the client’s loan-to-valuation ratios deteriorating and the bank wanting to avoid a forced sale, we were engaged to resolve the client’s financial difficulties. We negotiated to put the majority of the client’s properties collectively on the market, and a portion was sold at reasonable prices. Additionally, the client’s core hospitality business was successfully removed from the issues with the lender. It continues today as a going concern.