Mantra Group Reports Strong End of Financial Year Results

Australian accommodation provider, the Mantra Group, has reported strong end of financial year results with a 9% growth in EBITDA (YOY) to reach $60.6 million, reflecting a successful 2011/2012 financial year across both CBD and resort markets.

Overall room revenue across the group’s Australia and New Zealand network of Peppers, Mantra and BreakFree hotels increased by 6.2% on 2011 reflecting a growth in RevPAR of 5.8% across the group’s 22 CBD properties and 5.2% across over 85 resort properties while ADR grew by 1.7%.

“Mantra Group enters the new financial year in a strong position following what has been a year of great growth for the company,” said CEO, Bob East. “We reached beyond our targeted EBITDA; added four new properties to our Peppers brand; and increased revenue despite reducing our room stock following strategic divestments to strengthen brand equity.”

“Solid growth in ADR and occupancy was also achieved across the network and we were able to grow our domestic leisure business through dynamic marketing campaigns, despite challenges experienced across the industry in the face of a strong Australian dollar,” Mr. East added. “We also effectively capitalised on activity from the mining and resources sector, a resurgence in the MICE sector and an increasingly strong Chinese and Asian inbound market to contribute to our overall growth.”

The impact of the continuing growth of the mining and resources sector was most prevalent in Perth which saw 32% room revenue growth from 13% occupancy and 12% rate increase. Similar impact was felt in Brisbane - combined with a strengthening conferencing market - with 11% room revenue growth, 13% in occupancy and 3.5% rate increase; and in NT where 3.7% room revenue growth was driven by increased occupancy.

ADR growth driven by government and corporate sector activity saw a room revenue increase of 6% in Canberra and 2% in Sydney, with Melbourne and Adelaide remaining largely static.

Mantra Group’s resort properties in Tropical North Queensland felt the positive impact of the increase in Chinese and Asian inbound tourism reporting a 7% increase in revenue. Peppers and Mantra properties in Cairns and Palm Cove achieved record numbers for Chinese New Year celebrations this year and initiatives at property level to cater for this market are proving popular with inbound operators. Complemented by a growth in domestic leisure travel, this region is once again enjoying a high level of popularity with interstate visitors.

Despite often difficult trading conditions on the Gold Coast, 2% room revenue growth has resulted from increased domestic leisure room nights and conference related demand in the Broadbeach precinct. The group’s Peppers Broadbeach property is a stand out success with consistently growing occupancy over holiday periods and increasing demand as an accommodation option for conference delegates at the Gold Coast Convention Centre, located less than 200 metres walk from the property.

The Sunshine Coast saw a 4% room revenue increase and also felt the effects of a revival in the domestic leisure market with Mantra’s family friendly properties benefitting from the drive market and interstate bookings.

In New Zealand a significant 20% room revenue growth was achieved from increased occupancy and growth in rooms under management. The New Zealand network has seen a great amount of activity for Mantra Group in New Zealand this year adding two new hotels with further expansion planned for the coming year.

“We are buoyed by these results and confident that Mantra Group is well placed to achieve the same levels of growth and success in the year ahead and solidify its position as a leading operator in the accommodation sector,” East said.

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