The Australian Management Rights market place is currently under significant duress, with a current annual turnover of only 4.10%, according to Australasia's most prominent and largest tourism brokerage organisation.

Ian Crooks, the founder and Managing Director of Resort Brokers, said that it was normal for Management Rights to turnover, on average, every three to four years, equating to around 25-33% every year.

This financial year to date, however, Resort Brokers have recorded a 4% turnover, equating to only 17 Management Rights sold, with the average list price multiple of 4.17 and a realised sale multiple of 3.75.

According to Mr Crooks, this decrease was due to a number of factors.

"The ASX has had a significant fall of approximately 35%. This was predominantly on the back of property related companies who have been heavily geared and caught in the sub prime crises. Consequently, the Management Rights industry has been affected and the marketplace is adjusting," he said.

Mr Crooks explained that, with the dramatic increases in interest rates, some of the key players in the management rights arena have begun to exit and/or discard stock. He said that this was because, in their pursuit to gain a large market share, they paid excessively for lower quality properties.

"We should also realise the importance that New Zealanders have on the management rights industry in Queensland. We are of the understanding that approximately 50% of all management rights in Queensland are owned by New Zealanders. Currently New Zealand is in official rescission; their property prices are even more depressed than ours and their dollar has weakened significantly this calendar year against our dollar. This has made a significant impact on the industry," Mr Crooks said.

"Our activity has increased somewhat this financial year as the market adjustment occurs. In the last financial year we sold less management rights than in any other period as prices were significantly inflated and multipliers were in excess of 5 times net profit."

According to Mr Crooks, the demand for property in Brisbane remains very strong, especially for corporate short term lets.  He said that with occupancies at around 82%, Brisbane maintains its standing as the second highest occupancy in the world.

Mr Crooks advised owners to take a more proactive approach and cash up in a buyers market in anticipation of their next investment.

"Having said that, the fundamentals of well-priced motels and caravan parks leaseholds have remained the same, and we have recorded the best year, in this regard, since Resort Brokers was founded. The leasehold of motels and caravan parks continue to provide a 30% return, making it a far more lucrative market in this current economic climate for investors," he said.

Background information

Founded just over two decades ago, by Ian Crooks, a pioneer in the tourism property sales and leasing industry, Resort Brokers is now Australasia's most prominent and largest tourism brokerage organisation, specialising in the marketing and sale of leasehold and freehold motels, resorts, hotels, caravan/tourist parks, management rights, hospitality venues and all manner of niche market properties such as backpacker hostels, lodges and B&Bs.