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Cinema operator and hospitality group EVT (ASX: EVT) has launched a new third-party hotel management business after securing a deal worth up to $104 million for the Pro-invest Hotels portfolio.
The Sydney-based group, which owns the Event Cinemas, a range of hospitality venues and the QT, Rydges and LyLo hotel brands, says the Pro-invest Hotels deal will seed the new business which will operate under the group’s existing Travel division.
The portfolio initially will comprise 15 long-term hotel management agreements operated by Pro-invest under third-party brands totalling about 3,200 rooms across Australia and New Zealand.
Pro-invest currently has a portfolio of 31 hotels with about 6,000 rooms, as well as three commercial assets.
The hotels involved in the EVT deal largely comprise Holiday Inn Express as well as Hotel Indigo in Melbourne and at Potts Point and Voco in Auckland. Pro-invest Hotels (PIH) will retain asset management responsibilities for the hotels following the deal.
“The launch of EVT Connect Hospitality, seeded by the acquisition of PIH, represents a further initiative to grow hotel earnings,” says EVT’s CEO Jane Hastings.
“EVT Connect Hospitality will enhance EVT’s ability to deliver value for asset owners who seek to franchise a third-party brand, supported by the expertise of the PIH team and now boosted by the ability to leverage our extensive EVT Group expertise. We look forward to welcoming the PIH team to our group.”
Through the new EVT Connect Hospitality division, the EVT group will deliver management solutions to hotel owners seeking to franchise a third-party brand. The company says the hotel management solutions will be offered for all types of asset owners.
Under the terms of the debut deal, EVT will pay Pro-invest group $74 million in cash for the hotels portfolio but if the properties achieve higher-than-expected EBITDA in calendar 2025 and 2026, the deal is worth up to an extra $30 million to the vendor.
The assets acquired are currently held in four entities, two of which are incorporated in Australia and two in New Zealand, which are currently controlled by Pro-invest’s founders Ron Barrott and Dr Sabine Schaffer as well as Pro-invest management.
EVT is forecasting the new business will deliver incremental normalised EBITDA of between $8 million and $9 million annually, including synergies.
The company says the forecast is indicative based on current expectations of hotel trading and market conditions, adding that it remains subject to change.
“The board is pleased to support this opportunity to launch a new hotel management offering, underpinned by the acquisition of a high-quality managed hotel portfolio in PIH, aligning with the group’s desire to invest in new opportunities to grow the asset-light hotel management business,” says EVT’s chairman Alan Rydge.
The acquisition remains subject to approval by the Australian Competition and Consumer Commission.
EVT currently has a property portfolio worth about $2.3 billion but since the COVID-19 pandemic the group has offloaded $280 million in assets that it says did meet its investment criteria.
Among the properties currently on the market is EVT’s landmark Sydney CBD property at 525 George Street which the group says is the largest mixed-use development site offered to the market in the city since the 2022 sale of One Circular Quay.
EVT’s existing hotels and resorts network comprises 84 hotels and 12,559 rooms, with more than half of the portfolio operating under the Rydges brand.
The hotels division was a standout performer for the group in FY24, delivering record revenue of $407.4 million, up 15.5 per cent, and a record EBITDA result of $101.5 million, up 16.1 per cent compared to a year earlier.
The momentum was maintained in the first half of FY25, although the group’s Thredbo Alpine Resort suffered from a poor ski season in 2024.
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