Tragedy a blow but result still a record
ACCOMMODATION operator Mantra Group’s Gold Coast operations took a big hit following the Dreamworld tragedy last year.
The Surfers Paradisebased company was forecasting up to 7 per cent growth in revenue per available room prior to the accident, which claimed four lives.
However, the final figure was slashed to 2.1 per cent when Mantra delivered its full-year results yesterday. Chief executive Bob East said the figure was still a record for Mantra on the Gold Coast but well below expectations.
“We think this market is fantastic but clearly while it eked over the line to be a record year, it was certainly on track to do significantly better than that,” he said.
“However, the overall market was down 2 per cent, so we were pleased to get a record but it was against some pretty significant headwinds.”
Mr East said the accommodation market was returning to normal, but at a slow pace.
“It has not been the best year for the Gold Coast but it also showed it is a resilient market,” he said. “Even with that terribly tragic event, the Gold Coast was still able to perform, and now with the Commonwealth Games next year we all look forward to the future.”
Mr East said they are seeing strong demand in the runup to next April’s Games.
“We’re nearly full now. There are rooms available. We have applied our attention to a lot of the group business and contracted business through the Gold Coast 2018 Commonwealth Games Corporation,” he said. “In terms of the discretionary market, mums and dads and kids wanting to come to the Games, there are still rooms available but there is no doubt the Coast will be full when the Games arrive.”
Revenue increased by 13.7 per cent in FY17 to $689 million and underlying net profit rose 14.2 per cent to $47.2 million. The standout performer was Mantra’s resorts division, where revenue rose 29.5 per cent to $316.2 million.
The result was fuelled by contributions from acquisitions in FY17 including the Ala Moana Hotel by Mantra in Hawaii and Mantra Residences at Southport Central as well as increased occupancy and average room rates. But the CBD division had revenue growth of only 1.6 per cent to $316.6 million.
The CBD result was dragged down by difficult market conditions in Brisbane, Perth and Darwin.
“We are seeing green shoots on the demand side but in Brisbane and Perth particularly there are new hotels entering the market and that has made setting prices more difficult,” Mr East said.
Mantra declared a final dividend of 6¢, bringing its total dividend to 11c for FY17.
Shares closed down 6¢ or 2 per cent at $2.86.