By Sarah Townsend
Midmarket hotel firms sees strong prospects in Australia while Middle East economy slows
Midmarket hotels firm Action Hotels, which manages brands such as Ibis and Novotel in the Middle East, is targeting an initial public offering (IPO) in Australia within the next three years.
In an interview with Arabian Business, Action Hotels founder and chairman Sheikh Mubarak Al Abdullah Al Mubarak Al Sabah said that Australia has proved a lucrative market since the company launched operations there in 2012 and the intention is to swell its pipeline.
It has three hotels in Australia at present – two in Melbourne and one in Brisbane – and this month announced plans to build its fourth, a $69 million four-star hotel at Melbourne’s new Convention and Exhibition Centre.
Sheikh Mubarak said the company is considering a listing on the Australian stock exchange in the next few years.
He said: “Ultimately I think there’s an opportunity for a listing or trade sale in Australia; the value proposition is there.
“[Australia] is a triple A-rated economy and looking at the current problems we have in the [Middle East] region it’s a good idea to enhance our capabilities in Australia.”
However, he said Action Hotels has yet to commence discussions and plans to grow first. “I think we need a bit more scale, but ultimately there may be a liquidity event there either to raise more capital to grow or create some sort of structure.
“This is a three-year plan, which is a short time in this business.”
Action Hotels is listed on the AIM of the London Stock Exchange, and Sheikh Mubarak said the company is also targeting a full listing on the LSE within the same time period. However, he said the company needed to "hunker down" in the meantime.
“We need to get through the next three years aggressively, get our numbers up and then look to the next phase.
“Overall, we are doing relatively well in an environment with difficulties. With austerity measures, even governments are using our hotels more.”
To read the full interview with Sheikh Mubarak, click here.