Gold Coaster to chair nation-leading pub, hotel and venue chain after $200m Coles deal

One of the nation’s largest portfolios of pubs, restaurants and function centres is set to be chaired from the Gold Coast following a $200 million sale by a supermarket giant.

Fridays Riverside, at Eagle Street, Brisbane.

ONE of the nation’s largest portfolios of pubs, restaurants and function centres is set to be chaired from the Gold Coast following the $200 million sale of venues owned by supermarket giant Coles.

Former Mantra Group CEO Bob East is chairman of Australian Venue Co, which has inked a deal to buy 78 Coles hotels and pubs which is expected to settle in coming months.

The acquisitions, part of a joint venture deal with US private equity firm Kohlberg Kravis Roberts (KKR), will see Coles continue to manage and profit from its 243 retail liquor outlets while AVC manages and profits from the Spirit Hotels branded venues.

The sale, once finalised, will take AVC’s portfolio from 70 venues to 148, ranging from chef-hatted restaurants to suburban pubs.

A freshly suntanned Mr East has just returned from a long family break in Europe after selling his formerly-listed Mantra to Accor Hotels for $1.2 billion in May.

He sees no reason AVC could not become an even bigger success story.

Former Mantra executive Bob East. Picture: Jerad Williams

“We’ve got 4800 staff and it would be not inconceivable to see that go to 10,000,” Mr East said.

“Mantra only had 6000 when we sold last year, and we’ve only just put this together, so it is something that could be really quite big.”

As well as chairing AVC, Mr East remains chair of Tourism Australia and adventure tourism company Experience Co, and is also on the Federal Government’s National Brand Council.

The plans for AVC are to network the venues with technology and clever marketing, centralising operations like sales, finance, social media and fly-in event teams so venue managers can do more with less.

An app with shared rewards programs, offers, table service, phone payment and popup event notifications will also be expanded to the new venues once the sale is settled.

A comprehensive events planner will be the centrepiece, allowing venues to capitalise on an influx of potential customers in real-time using the resources and expertise of the wider company.

“More and more people are organising things around major events,” Mr East said.

“They’re looking to bring conferences or incentives in or reward their top 50 people with a celebration.

“We’re all so busy and if we have a wedding or major function on we say `let’s wrap a holiday around it’.

“We will have an accommodation aspect around this as well, which will be starting smaller but has some potential.”

Louryan Babekyan from the Regatta Hotel, which is part of the AVC portfolio. Pic: Jamie Hanson

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The group’s Gold Coast portfolio will include Runaway Bay Tavern, Ferry Road Tavern, Burleigh Town Tavern and Salt Bar in Kingscliff and it also has a high presence in Cairns and Darwin.

In Brisbane, the Regatta Hotel and Fridays are in, while Sydney hotspots Kingsleys Restaurant, Cargo Bar, Bungalow and 12-Micron round out the high-end offerings.

“We do an enormous amount of popups in CBDs or down on the beach,” Mr East said.

“That stuff is taking it all to a level that individual operators can’t compete against.

“Anyone can have a venues and bricks and mortar and an establishment and friendly staff member, but how do you give them the expertise, rather than them running around doing everything and then saying `oh my God I should do a popup this weekend on the beach’, have a specialised team that goes around the country and does that kind of thing.

“The venue manager loves it because they get experts and labour coming in to set it up, they get rewards because they’re all incentivised by the amount of money they make in their venues.”

Pub baron Bruce Dixon. Picture Rebecca Michael.

AVC was born after KKR bought a majority stake of Dixon Hospitality for $190 million.

Founder Bruce Dixon remains a shareholder, and Mr East also has some skin in the game — a strategy he said had been crucial to Mantra’s success.

“We’ve got people working for the company who have put their cold hard cash in basically,” he said.

“Which is precisely the story of Mantra and why it was so successful — 12 people stayed for 12 years — 12 of us put money in and years later we were all there.

“It was very comforting through the journey to know that you’ve got people, side-by-side, who are equally as worried about the business as you are.

“It does impact their livelihood, it’s not just play money, it’s cold hard cash that’s meaningful to people. I just think that there’s no better mechanism.”