Quest celebrates 25 years, predicts doubling in 10
Quest chairman Paul Constantinou is committed to staying with the corporate sector that has been the company’s backbone for the past 25 years.
The holiday market, while very welcome, is very discretional and destinational whereas the corporate market is more certain in it requirements. Although he described the corporate sector an easy market to service he stressed value as a major factor.
Quest celebrated 25 years in style by recognising the leading franchises across the network at its annual gala awards dinner held at the Melbourne Museum last Saturday evening.
Paul, who started the business in 1988 at Quest Royal Gardens in Melbourne, sees Quest doubling its portfolio of properties to 300 in just 10 years.
Despite the rollout of Quest Studios in six properties, he sees multi-tier branding as not an option for Quest. He maintains that multi-tier branding “gets confusing” and a single brand can be more disciplined in giving the customer exactly what they want, Paul told accomnews. He believes in keeping brands as simple as possible.
Quest will focus on the younger corporate traveller that requires more facilities and less space than the older business guest. They are increasingly dependent on technology require connectivity albeit using their own devices.
As regards overseas expansion, Paul says “it is a given they will take the Quest concept overseas” but it will have to be where it can roll out new complexes. Just having a Quest presence is not enough.
“Moving into New Zealand wasn’t easy,” Paul remarked. “We had to deal with a different culture and a different way of doing business. It worked but it wasn’t easy.”
Providing the corporate traveller with the facilities they need is paramount but, Paul concedes, growth in technology has been “too fast” and there was a very real prospect of “overproviding” that can, in turn, lead to “a bad room experience”.
“Don’t change for changes sake,” Paul warns. “Gather info from your guests – timely information as to what they really want. We can’t keep going at the rate we have been,” Paul told accomnews.
Paul does not see Quest going down the “drip feed” road in pricing any time soon. “The corporate sector want certainty and surety in pricing,” Paul asserts. “They want a place to go back to time and time again at a stable rate. Cheap confuses your market.”
As to the future, Paul predicts that the number of Quest properties will double in the next 10 years but only in certain locations – “we are not going to build new complexes for the sake of building”. But demand continues to be far in excess of supply and he predicts growth will be immense over the next decade.
Quest is negotiating to sell its development pipeline to an institutional partner, in a move that could reshape the future funding of the nation’s accommodation sector. Quest’s adviser, Goldman Sachs, is attempting to secure a capital partner to initially buy five Quest assets, plus the company’s future developments, potentially creating an unlisted property trust worth up to $300 million.
Quest develops up to 10 serviced apartment complexes valued at up to $50 million each annually. It operates more than 150 properties in Australia, New Zealand and Fiji.
Paul said it was easier for a capital partner to buy Quest’s future developments for a yet-to-be-determined period, rather than selling them off piecemeal. “We can find the one-off deal. Earlier this year, for example, we sold Quest Albury. But we are trying to find an institution who has an appetite for this asset class, we would like to see it grow.”
Quest will initially offer five serviced apartment complexes, including Quest’s Sydney Olympic Park complex, to a capital partner, which is likely to create an unlisted trust solely devoted to serviced apartments – a first for the nation’s property sector.
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