Bennelong Funds Management

Jeremy Bendeich, Chief Investment Officer and Portfolio Manager of Avoca says: "We see good potential for inbound tourism plays as the Australian dollar falls. However, finding quality plays at reasonable prices is difficult. Much of Australia’s tourism infrastructure is cum-capex. Also, most of Australia’s unique and protected tourism assets – e.g. Taronga Zoo, BridgeClimb - are not listed. Without uniqueness or legislative protection, ultimately competition will erode returns as barriers are generally immaterial in this space. On this point, Wanda Group’s proposed $1bn theme park on the Gold Coast is certainly not going to benefit the incumbent theme park operators (AAD, VRL). They will be forced to compete either on price or quality (increased capex), both of which are bad for returns. In our latest monthly update, we examine why we’re in the unusual position of being drawn to the domestic airline market." (VIEW LINK)



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