G’Day Group eyes more acquisitions amid tourism M&A slowdown

Holiday park operator G’Day Group is looking to continue its acquisition spree despite a slowdown in M&A activity across the tourism sector.

The El Questro accommodation property in WA was acquired by G’Day Group in 2021.

Holiday park operator G’Day Group is looking to continue to its acquisition spree following a record year of visitation and spending in the country’s caravan and camping tourism sector.

The company has invested more than $60m in acquisitions over the past 12 months, including the Coffin Bay Caravan Park, Beachfront Camping and Cottages Narooma on the NSW south coast and the Porepunkah Bridge Holiday Park in Victoria’s High Country.

While M&A activity across the broader tourism sector has softened in recent months, G’Day Group chief investment officer Amanda Baldwin said the company remained on the hunt for “transformative” deals.

G’Day Group chief investment officer Amanda Baldwin.

With international airfares expected to remain elevated for some time, and households tightening their belts amid a cost of living crisis, Ms Baldwin expects travellers to continue to holiday closer to home.

“Australians still have the appetite to travel but are looking at more affordable options, which is the sweet spot for our industry,” she said.

“G’Day Group has an eyes-up approach, always looking for opportunity and transformative deals that will add significant scale or give us a distinct strategic advantage.

“While we’ve been able to find and execute these deals every two to three years, we remain active in the market for quality holiday park assets.

“We’re also increasing our focus on developing existing assets and investing around $80m to $100m per year.”

Ms Baldwin said a reduced volume of M&A activity over the past six months reflected capital constraints facing some buyers, while the challenging economic environment and rising insurance costs were driving some operators out of the industry.

“The combined result has seen a softening in valuations,” she said.

“However, tourism fundamentals remain strong and this has ensured our industry has weathered these impacts relatively well when compared with other commercial property sectors like office and retail.”

Ms Baldwin will be among the speakers at tomorrow’s William Buck CFO Summit, where she will speak in more detail about the current M&A environment.

William Buck corporate finance director Samantha Nicholls, who will also appear at tomorrow’s event, said the uncertain economic outlook had caused many businesses to take a more cautious approach to deals.

“Valuations and prices in general have softened, reflective in lower margins particularly for those more exposed to discretionary consumer spending,” she said.

“There is a sharper focus now being placed on the initial scoping stage as potential acquirers seek to run an even closer eye over their target.

“For strong businesses with a long-term growth vision, M&A is still very much on the radar.”

Other speakers at tomorrow’s event will include NAB chief economist Alan Oster and former Codan chief executive Donald McGurk. It will be held at Adelaide Oval.