Are We There Yet?

I’ve taken up golf recently and it turns out I’m quite gifted at the royal and ancient game.

I’ve traditionally been completely ambivalent when it comes to belting a small white ball around but with impending old age comes a need to find a sport less strenuous than the pastimes of my youth. I’ve also noticed that if you play in every available accommodation industry golf day you can pretty much tee off most days of the week and call it work (or at least networking).

For those who have had the pleasure of accompanying me on the course you’ll know that I started off a few years back hiring clubs and playing once in the proverbial blue moon. The frequency, if not the skill, increased over time and I took the plunge a few months ago and bought a set of clubs. The bloke at Golf World couldn’t believe his luck. A punter who purchased purely on the colour of the golf bag was obviously not the usual state of affairs although, in fairness, the salesman did offer to fit me up and video my swing. Not being partial to an offer of a filmed fit up from a complete stranger I declined. No need for that I advised, unless a series of air swings was the intended filmed result.
And so, suitably kitted out, I sallied forth.

It’s true that in some cultures a brave but failed attempt at a new skill is held in high regard. Sadly, not this one. My golfing partners paid no heed to my newfound golfing credibility and continued to deride my limited talent and hopeless attempts at actually connecting with the ball. Not even my pretty bag and club covers (I presume to keep the clubs nice and warm) offered any chance of on-course respect.

But then a funny thing happened. The cost of the new clubs has motivated me to play more often and using the same sticks all the time seems to have it benefits. Recently I played in two accommodation industry days and not a single wild animal was injured. By wild animals I mean ducks, kangaroos and the like, not my playing partners who deserve all the injuries I can visit upon them.

Here’s the thing. Now I think I’m going okay as a very poor golfer I’ve started to try and exert some influence over where the ball goes, as opposed to just being happy to connect. Sometimes I even share my thoughts on likely trajectory with my fellow players. It seems to amuse them and when the miracle happens and the ball actually does go where I predict they seem genuinely happy for me or at least relieved the thing didn’t go sideways and hit one of them in the head (or worse).

So, in terms of predictions and accuracy I’m probably not the best bloke to listen to. However, if you are like my golfing partners and like a little amusement with your crystal ball gazing here’s a thought. The market, like the golf course, is all over the place, has its ups and downs and is very unpredictable.

Just when you think it can’t get any tougher there’s a water hazard or a bunker. The trick is to pick the bottom and know when to move. I’m seeing some signs that suggest we may have reached that point although we may be bumping along the bottom to some degree. The last few months have seen an increasing enquiry rate from people looking to move into the accommodation sector and, while many are extremely cautious, settled transaction numbers and dollar values across the industry are steadily increasing.

There is improving demand for management rights across a number of price points although smaller net profit buildings with short agreements continue to suffer almost no buyer interest and limited prospects. Post GFC buyers tended to chase the perceived security of large permanent buildings although we are seeing improving demand for leisure assets across several states. Corporate short stay is hot at present, particularly in Queensland and NSW with some demand in other states. Regional motels, particularly in resource sector dependant areas, are in high demand with buyers keen to take advantage of limited room supply and strong mining company accommodation requirements.

My stats suggest that multiples for management rights are firming (other than the before mentioned small net properties) while yields in the motel and caravan park sector are stable or improving. The challenge now is to determine if these apparent improvements in the market are here to stay or, like my golf swing, just an aberration in a continually challenging game.

See you on the course. If you see me first… duck!

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