Economy

Is tourism going cheap? Clive Palmer thinks so with his latest purchase a $10 million resort in Tahiti

Engel Schmidl /

Billionaire Clive Palmer has purchased the former Club Med at Bora Bora in Tahiti for around $10 million, the latest acquisition in a string of deals in the tourism industry for the mining magnate.

Palmer bought the resort for “relaxation, serenity and because no one else was going to buy it,” he told Fairfax.

“I will bring my family here, it is one of the most beautiful places on earth,” the billionaire said.

Palmer told Fairfax he did not as yet have plans to refurbish the resort, which owner Club Mediterranee SA closed in 2009.

SmartCompany contacted Palmer but he did not respond prior to publication.

Palmer has been accumulating tourism assets over the last year as part of his campaign to boost the sector and gain exposure to it while resort prices are at the bottom of the cycle.

“It will be every bit as luxurious as the original Titanic but, of course, it will have state-of-the-art 21st century technology and the latest navigation and safety systems,” Palmer said when he announced the deal.

However, Palmer’s main focus has been on property, a move he foreshadowed in August 2011 when he said he would invest “a couple of billion dollars” in the Sunshine Coast region.

He recently attempted to buy the Club Med on Lindeman Island on the Great Barrier Reef along with the Sheraton Mirage at Port Douglas but was outbid on both deals.

He did manage to buy the Robina Woods and the Colonial golf courses at Robina for $7 million and also acquired the Hyatt Regency Coolum Gulf Resort and Spa, although that has been placed in administration amid an ongoing court battle regarding the ownership and management of the holiday destination.

Along with these purchases, Palmer has shelled out almost $6 million on a Gold Coast property spending spree and now owns seven residential properties – five of which have been picked up very cheaply this year. 

John Lee, chief executive of the Tourism and Transport Forum, told SmartCompany the tourism market was fluid at the moment with a number of tourism assets changing hands.

He points the finger at the increasing number of Australians travelling overseas, which more than doubled over the past decade from 3.4 million in 2001 to 7.8 million last year.

“This has seen a trend of falling demand for domestic travel, especially to regional leisure destinations,” Lee says.

“This has reduced returns for many operators, which impacts on their ability to reinvest in their product and in turn is reflected in the value of the properties changing hands at the moment.”

Lee warns that Australians perceive greater value in travelling overseas – so instead of going to Queensland, people are choosing Fiji, Bali or Thailand.

“Those destinations have far lower construction and operating costs than Australia, which makes it difficult for Australian destinations to compete on price,” he says

“Plus there’s a ‘brag factor’ in being able to say you went overseas for your last holiday.”

Lee is hoping that the new Tourism Australia campaign entices international visitors and gets Australians to travel more in Australia.

“The most recent figures show an upturn in domestic travel. We hope that continues and benefits those regional leisure destinations that have been doing it tough.”

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