Pub king Justin Hemmes says relaxed rules ‘shift the goalposts’

Pub king Justin Hemmes says one key change in COVID rules has ‘shifted the goalposts’, putting 2021 back on track.

Justin Hemmes says the relaxation of rules about standing in pubs and dancing are game changers for the industry in NSW. Picture: Bianca De Marchi

Fresh from his purchase of The Quarterdeck in Narooma, a tiny outpost tiki bar on a shimmering NSW South Coast waterfront, entrepreneur and hotel billionaire Justin Hemmes spent last night touring some of the 80 or so Sydney hotels and restaurants he controls.

“We are so excited that standing in venues is allowed, this has shifted the goal posts,” says Hemmes, adding that he and his staff are incredibly optimistic about how 2021 will play out given dancing is allowed in NSW from Monday.

“The city is feeling busier, things are certainly looking up,” Hemmes told The Weekend Australian.

So how did Hemmes, who was recently valued by The List at $1.24bn and who owns 80 hotels and brands including his just purchased $32m Duke of Gloucester in Randwick, financially weather the COVID roller coaster?

“I won’t discuss it but everyone has been affected differently by COVID,” he said. “It depends on your mix of hotels to night clubs to restaurants to gaming and to accommodation. Hotels are a varying mix of offerings, it just depends what the mix of your offerings is. But some regional hotels are doing well.”

In purchasing The Quarterdeck, for just over $1m according to sources, Hemmes hopes to capitalise on booming regional tourism and demonstrate his ‘love’ for the tiny township of Narooma.

“Regional pubs have been trading extremely well because people are exploring their own backyards and not going overseas.”

Inside the The Quarterdeck at Narooma, now owned by Justin Hemmes. Source: Facebook

While some regional centres such as Cairns, which is highly dependent on international tourists, have suffered through COVID, other places such as the NSW south coast and the NSW north coast around Byron Bay, as well as Queensland’s Gold Coast, have been top performers.

“One of the few benefits out of COVID is Australians have explored their own backyards and I feel we have been too quick to jump on a plane and go overseas given the diversity of offerings within Australia. It’s great to support regional areas with hospitality, accommodation, arts and culture and to see people travelling with their caravans,” he says.

As for Narooma, about five hours south of Sydney, Hemmes is attracted to its “incredible clean water, fantastic temperate climate and its fishing,” adding that it has become his second home.

‘We’re not into pubs’

The Quarterdeck pub purchase at Narooma marks the entrepreneur’s first regional acquisition outside of Sydney – but it is not the first time he has looked regionally, admitting that he recently inspected The Sun Hotel just out of Byron Bay which was recently offered to the market by billionaire coal baron Brian Flannery.

Coal millionaire Brian Flannery. Picture: Tara Croser.

Sydney publican Arthur Laundy and local publican Tom Mooney also inspected The Sun Hotel. The price guide was $10m-$12m.

Despite owning two hotels both in Byron Bay and further north on Kirra Beach, Flannery told The Weekend Australian he is no fan of hotels.

“We are not into pubs,” Flannery says.

“The reason we sold it is pretty simple really, I am not in the pub business. If you want to be in the pub business you want to have 10-20 hotels which gives you buying power. It was superfluous.”

While the Sun Hotel was inspected by just about every pub titan in the country the identity of the buyer is being tightly held by both Flannery and the selling agent CBRE’s Wayne Bunz.

The Sun Hotel’s marketing campaign due to its proximity to booming Byron Bay was a big factor in its popularity with buyers.

Replete with a TAB, separate bar, full hotel licence and drive-through bottle shop, it sold one week prior to the end of the campaign.

Flannery developed the Sun Hotel seven years ago from an existing Club Med building trucking it 500 metres up the road, so his development company KTQ Group could develop the Elements Resort at Byron.

Flannery’s other pub, the Kirra Beach Hotel on the Gold Coast, will be demolished next week paving the way for an apartment development he has been planning for a decade.

Flannery has sold all but 15 apartments at his 118-unit Kirra Beach development.

The cheaper apartments on the lower floor are all that are left and are great for investors, he says.

“It’s great investment stock for the area.”

Byron Bay residents have contributed to some of the apartment acquisitions at the Kirra Beach complex, called the Miles Residences, but the bulk of buyers, as is the case elsewhere on the Gold Coast, are Brisbane residents looking for a holiday home.