Nick Lenaghan | April 1, 2022
Fund manager Salter Brothers is ramping up for the return of travellers, bringing on board hotel giant Accor to run its newly acquired Travelodge portfolio in one of largest hotel management portfolio deals in more than a decade.
Under the management agreement, Accor will roll out its brands – ibis Styles,Mercure and Novotel – across the 11-asset Travelodge portfolio that Salter, partnering with offshore institutions, took over last year from Mirvac and the NRMA in a record $620 million deal.
Managing director Paul Salter said the fund manager, which manages about $2 billion in assets including a separate hotel portfolio operated by InterContinental and Hyatt Regency, compared a range of top operators alongside Travelodge, a major UK player.
“On balance, we felt Accor provides the bestmix of brands across the suite of hotels weacquired. It’s about putting the right brand onthe right asset. We took the view we wanted to manage this with a single operator,” he told The Australian Financial Review.
With flagship hotels at Sydney’s Martin Place, Wynyard, and Surry Hills and the Travelodge Southbank in Melbourne, the portfolio comprises more than 2000 beds. Salter was backed by Singaporean sovereign wealth fund GIC and Swiss-based global private equity firm Partners Group in the deal, which settles at the end of this financial year, allowing the Accor brands to roll out from July.
A big bet on hospitality’s future when the deal was struck last July, the punt is paying off, with the sector’s revival gaining momentum, propelled by the end of lockdowns and opening of borders.
Although challenges remain, demand is building and will be helped by the return to offices, Mr Salter said. Leisure travel is already rebounding in Salter’s other hotels.
In what may be a first in the Australian market, the Accor agreement includes ESG targets for green energy procurement, waste and energy, water reduction and importantly staff diversity.
“It’s a sign of things to come in the sector,” Mr Salter said.
The portfolio will join Accor’s existing 340-strong network of hotels in Australia, tapping the benefits of the Paris-based giant’s global network. The deal is Accor’s largest integration since its $1.2 billion acquisition of Mantra Group in 2018.
“These hotels are located in amazing central city locations and the best metropolitan areas and we are working with Salter Brothers to reinvigorate the portfolio, setting them up for success with the next generation of travellers and signalling our confidence in the return of corporate travel,” said Accor Pacific chief executive, Sarah Derry.