Quadrant exits Australia experiential tourism business
Quadrant Private Equity has sold Journey Beyond, an Australia-based experiential tourism business, to US-based Hornblower Group, which is best known for offering cruise and sightseeing packages.
The size of the transaction was not disclosed, but various Australia media put the valuation at approximately AUD 600m (USD 435m).
Journey Beyond – formerly known as Experience Australia Group - was the product of an investment thesis based on growing demand for higher-end, experience-based tourism opportunities. Quadrant wanted to combine this with its tried and tested industry consolidation approach, creating a single platform to pursue operational efficiencies and cross-selling.
The first piece, Great Southern Rail (GSR), an operator of luxury transcontinental passenger services, was acquired in 2016. Rottnest Express, a Perth-based ferry and tour service, and Cruise Whitsundays, a North Queensland operator known for its cruises to the Whitsunday Islands and trips to the Great Barrier Reef, were subsequently added.
GSR runs The Ghan between Adelaide and Darwin, the Indian Pacific between Sydney and Perth, and the Overland between Melbourne and Adelaide. The business was in distress until Allegro Funds led a turnaround effort. It received a minority interest in Journey Beyond on selling GSR to Quadrant.
Australia-based tourism companies have been substantially impacted by COVID-19 as the country closed its borders to almost all international visitors.
According to Tourism Research Australia, which is part of the Australian Trade & Investment Commission, tourism GDP reached AUD 32.4bn in the 12 months ended June 2021, down 36.7% on 2019-2020 and 46.4% lower than in 2018-2019. Tourism exports came to AUD 1.7bn in 2020-2021, down 94.9% year-on-year.
While the lack of international business has partially been offset by more Australians holidaying domestically, intermittent lockdowns and interstate travel restrictions have been disruptive. GSR’s Indian Pacific route, for example, has experienced long hiatuses due to an inability to enter Western Australia.
The country re-opened its borders in December and the Australian Bureau of Statistics put provisional international arrivals for the month at 196,800, up from 72,200 in November. Western Australia, the last state barring domestic inbound travel, expects to open up in February.
Journey Beyond was one of four remaining assets in Quadrant’s fifth fund – or eighth including its pre-independence years – which closed on AUD 980m in 2016. The firm raised AUD 1.24bn for Fund VII at the end of 2020.
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