07 Nov 2012
Words Tim Admin

Many Faces Make Our Industry

DIFFERENT PATHS LEAD TO ACCOMMODATION OWNERSHIP If you set out to profile a ‘typical’ motel or management rights owner, you would soon find ‘typical’ is not a word that applies. So, who are the people who drive our industry? Where have they come from? And how did they get here? No formal qualifications are needed to enter the accommodation business. Certain licence requirements must be met. And training in hospitality and management can be valuable. But no traditional career path really exists. Resort Brokers’ consultants meet dozens of motel and management rights owners day in, day out. We are always struck by the depth and diversity of the characters behind Australia’s dynamic accommodation industry. Many come from senior public and private sector backgrounds – former executives, bureaucrats, bankers and professionals. Some have hospitality backgrounds, but most have no previous experience. From plumbers to pilots, tellers to teachers, they come from all walks of life, and often from very humble beginnings. John ‘Foxy’ Robinson, for example, a titan of the Northern Territory’s accommodation scene, began his working life as a boner at the meat works. After starting with a small caravan park in Katherine, he went on to develop a multi-hotel complex around Darwin Airport. Last year, he sold two of the properties to a Sydney Hotel group for a reported record $70 million. Another success story that springs to mind is that of Tony and Jackie Segat. After entering the industry in 1978 with a small $30,000 motel lease, they went on to own multiple motels in New Zealand and Australia, before doing very well in management rights. Tony started out as a migrant construction worker. This month, informer introduces the first in a new series of articles exploring the many faces of our accommodation industry. We hope you enjoy meeting some of your inspiring colleagues and hearing their stories. The series begins with Richard Arbon, a straight-talking former farm boy turned management rights mover and shaker. Healthy crop under management Richard Arbon left school mid-way through Year 11. They were a man short for the shearing, and he was destined to be a fifth generation farmer. His family’s farm near Balaklava in South Australia’s mid-north was a long way from Queensland’s coastal resort cities. These days, Arbon Property Management commands a management rights portfolio which, at various times, has ranged from 15 to 25 properties and stretches from the glittering Gold Coast to tropical Cairns. These days, Arbon Property Management commands a management rights portfolio which, at various times, has ranged from 15 to 25 properties and stretches from the glittering Gold Coast to tropical Cairns. It would be easy to describe Richard’s story as a ‘rags to riches’ tale. He has battled a few times to keep the wolf from the door. But really, it is a story of determination driven by necessity, of self-belief and perseverance. As a young bloke on the farm, being a Gold Coast businessman would hardly have seemed conceivable. Not that you get the impression Richard would have been daunted by the prospect. It’s just that it wasn’t on his radar. “I was brought up to take over the farm,” he says simply. Football, on the other hand, was on his radar. “I was very keen on football, though. So I moved to the city, to Adelaide, and played A-grade for Woodville in the SANFL. That was 1987 and ’88,” he says, seemingly unaffected by this impressive achievement. But country life beckoned again. More to the point, Richard had his eye on the future, and he knew football stardom was not a secure long-term prospect. “I saw some of my footy idols retire with very little money or prospects,” he said. “That’s not the future I wanted. I retired, got married and bought a mixed livestock and cropping farm on the York Peninsula.” Life on the land is never easy. But the rough patch that hit the Arbons from 1989 was enough to break anyone’s spirit. First they were in an horrendous car accident, then interest rates climbed to 22%, and drought ravaged the land, followed by flood and mouse plague. One after another the live sheep trade, wool and grain prices collapsed. “I’d borrowed heavily and the farm wasn’t able to support the debt and our growing family,” Richard said. “We struggled to make ends meet. It was a turning point. I had no choice but to look off-farm for our security.” Always a strong shearer, Richard could make decent money in the sheds, and his wife was a nurse. Over time he developed other businesses, including what turned out to be a successful venture, buying a liquid fertiliser franchise. In fact, he did so well, the fertiliser company invited him to go to England to help set up the UK operation. Now, this is where you might expect a young farmer with a wife and three children under four years old, to hesitate. Not Richard. “We leased out the farm, put all the machinery in the shed, took what money we had, and poured it into this business opportunity. It was hugely successful …. until my business partner took me for everything I had!” The Arbons were back at square one. Worse than that. They were on the other side of the world, penniless, with no family support, and a fourth child due in a matter of weeks. Richard’s trademark determination was about to be severely tested again. With difficulty, he managed to bring his family back to Australia. At least, at the farm, they still had a home. And, he eventually worked his way through the legal mire left by the UK crooks who perpetrated the elaborate swindle that blind-sided him. “It set me on the back foot for four years,” Richard said. It was also the catalyst for a big life change. “I put the farm on the market straight away. I just needed a new start.” Looking for a way forward occupied most of the four years it took to sell the property. He began business studies at university, but soon realised that a slow climb up the ladder was not the answer for a man in his 30s with four children to support. “The prospect of a job, or placing our future in someone else’s hands, wasn’t something I knew or trusted. In business, I felt I could control my own future. So small business was my only real option,” Richard said. “I looked at hundreds. But my biggest problem was finance. You have to buy goodwill, and not too many financiers would lend on the thin air that is goodwill.” Then, by pure chance, a visiting family friend from Queensland introduced Richard to the concept of management rights. “It just clicked. I could see I would actually be able to borrow enough to buy management rights, and I felt sure it was something I could do.” Furthermore, there was the back-up security of a caretaker’s salary. Two days later, Richard hopped a plane to the Gold Coast and started his search. It was early 2001. By May, the Arbons had bought the management rights at a 217-unit residential complex, Sailfish Cove. Even that was not without a heart-stopping hiccup. “I arrived from South Australia, all our belongings in two trailers, my wife and (now five) children following by plane, drove in to settle the sale and the owner had changed his mind!” In the end, the deal went through. Living on site with five children wasn’t exactly ideal, though. “The kids just thought the whole place was ours, and all the other residents were visiting us,” he laughed. “They’d keep disappearing into other people’s houses.” After 18 months, it was clear they needed to move off site. But, with everything tied up in the business, they couldn’t afford to. Richard’s solution? “The only way to grow was to buy another management rights. I bought Central Brunswick, a serviced apartment hotel in Brisbane’s Fortitude Valley. Talk about chalk and cheese!” While Richard speaks calmly of this time, it’s clear he was on a steep learning curve, and it was very hard work. Still, he was not afraid of either. And a pattern for growth was emerging. After turning around the Brisbane property, he moved to sell it and signed up to buy another at Main Beach. Again his mettle was tested. Just as the purchase went unconditional, his sale fell over. Nail-biting times. In the end, a three-quarter share in Central Brunswick was sold, and Richard was yet again on the lookout for opportunities. Arbon Property Management has flourished under Richard’s confident stewardship. He still has his very first management rights and owns, either outright or in partnership, many others across the Gold and Sunshine Coasts, Brisbane, Whitsundays and Cairns – permanent and holiday, corporate and student complexes. “I’ve always believed determination is the key. You can always put in the hard work, and acquire the knowledge you need, but you have to have the belief and determination to succeed,” Richard said. “In my case, need was the primary driver. With five kids to look after, the farm just wasn’t going to do it. My children gave me the energy to succeed.”