Why the Willy Wonka of Hotels Keeps Buying the Hardest Assets

Hotel mogul Jerry Schwartz owns 15 hotels, a brewery, a seaplane business and a handful of solar farms. A 16th hotel is coming to London. The Schwartz Family Company boss tells The Urban Developer the common thread is simple: family first. When The Urban Developer rang Jerry Schwartz during the school holidays, he was in the middle of a resort tour. The hotelier was riding the miniature train at Rydges Hunter Valley, microphone in hand, explaining the property to guests. His 16-year-old son was at the controls. “I sit next to him so people don’t get upset that a 16-year-old drives the train, and I’m the tour guide,” Schwartz says. Back at the resort’s jumping castle, his daughters were working too. The idea, he says, is to “make them realise there is a responsibility for being in a family company”. It is a glimpse inside the mind of the investor who has built a $600-million-plus portfolio of resorts and city hotels around one idea: families. A portfolio that grows with the kids Schwartz’s acquisitions have moved in lockstep with his own family. He bought the Fairmont Resort in the Blue Mountains when his son was born. The Hunter Valley resort acquisitioned when his twin daughters arrived. ▲ The Fairmont Resort at the Blue Mountains was acquired when Schwartz's son, Dane, was born, and has been added to with the acquisition of Leura Gardens. The approach carries into his city hotels, where each property has its own fluffy toy mascot, given free to children, and bespoke drawing books themed on the hotel’s locality. At Newcastle he put a train on the promenade and wants to add a merry-go-round. “It’s not only a great idea (to develop family-friendly resorts), but it’s just a lucky situation that as my kids evolve, I see the things that they want and I keep wanting to add those.” The site others wanted to knock down Paradise Resort on the Gold Coast perhaps best illustrates Schwartz’s approach. He says he knew the property well before he bought it. The Fairmont and the Hunter Valley resorts missed out on best hotel of the year awards because Paradise Resort kept winning them. He took his own children on a reconnaissance mission to find out why. “We were blown away,” he says. “They had the two water parks and the ice skating rink, and all that sort of thing.” The Surfers Paradise site was large and central. He says most prospective buyers did not see it for what it was—a haven. “I suppose I was [its] saviour, because most people who wanted to purchase it saw it as a development site,” Schwartz says. ▲ Schwartz has added a parents retreat at the Paradise Resort so parents can enjoy downtime on a family holiday. He credits previous owner David Brook with turning what had been an adults-only resort into a kids’ destination. “It would have been a real shame to pull it all down and get rid of what is such a pleasurable and unique opportunity for hospitality in Australia.” The resort is adding a retreat for parents, including an adults-only pool. The pitch is “happy kids, happy parents”. The next project is bigger: a pyramid structure over the carousel, housing an art gallery with works including Dalí sculptures. Schwartz calls it a multimillion-dollar project, and says it is “in the wings waiting for approval from council”. From pubs to 15 hotels Schwartz did not start with resorts. His first purchases were pubs, which he says is what he could afford at the time. At one stage the former cosmetic surgeon owned three clubs. His father died in 2000, and Schwartz and his mother took over a portfolio of three hotels, and added two more. His mother died in 2005, and Schwartz has kept acquiring assets. When an opportunity comes up, he says, it may not come again: “It’s very important to not procrastinate. Just grab it while you can, trust that gut feeling.” That is an approach to both property and life for the father of three. “Usually when I buy a hotel, it’s the one that needs most of the effort because it’s got the potential that needs to be realised,” Schwartz says. “That’s why I’m an acquirer rather than [an operator]. “My modus operandi really is experiences ... If there isn’t experiences there now, what opportunities are there and how I can improve on those opportunities.” ▲ Schwartz bought the Rydges Hunter Valley when his twin daughters were born and added activities, such as horseriding, as his children's interests evolved. Beer, seaplanes and solar The wider business may read as a diverse list, but Schwartz sees a pattern. The breweries supply his hotels, a natural extension of his years in pubs. Sydney Seaplanes adds to the experiences on offer. He is also involved in hotel IT operating systems. The solar farms go a step beyond rooftop panels. “It’s actually manufacturing power,” he says. “It’s not only doing the right thing, but it’s saving me a lot of money. It’s like producing your beer and using it in your hotel.” Every new acquisition is a brick in the vertically integrated empire he is building. Prices, Sydney and the Olympics Schwartz says hotels rebounded quickly after the pandemic and domestic tourism remains healthy. He says he has largely run out of room in his hometown of Sydney, where he owns six hotels, including the Sofitel at Darling Harbour. “The prices have gone so high, I’ve joked that I can’t afford to get another hotel in Sydney,” he says. On Brisbane, he is positive about the city but unconvinced by the Olympics as an investment case, calling the Games “a blip on the radar”. He prefers assets close to home on the east coast and is not looking further afield, with one exception. London calling The company’s 16th hotel will be his first offshore: a property in London’s Paddington. ▲ Schwartz has co-invested in a hotel in Paddington, London, where a major refurbishment is under way. Schwartz Family Company has signed on as a key investor in the redevelopment of London Paddington hotel in partnership with Singapore-based Prima Asset Management. The hotel will be converted into a boutique upscale hotel, increasing the key count from 68 to more than 80 rooms. Schwartz feels a connection to the city. He worked in UK hospitals when he was younger, and says UK real estate rules are similar to Australia, which made it “an easier opportunity”. “That’s a whole new adventure for me,” he says. The Willy Wonka of hotels Someone once described Schwartz as the Willy Wonka of hotels. He says it’s “quite a nice description,” and that he’d be happy with it as his epitaph. Asked about a favourite hotel, he declined, saying it was like being asked to choose a favourite child. ▲ Schwartz wants to inject fun and experiences into all of his hotels. Succession is on the table with his children, but not a forced decision by any means. His son has always shown an interest, Schwartz says, and he hopes that one, two or all three of his children remain involved. For now, the kids are running the jumping castle and driving the train. “It’s not just a place to go and put your head down on a comfortable bed,” he says of his hotels. “It’s got to be a place you want to go to because it’s fun.”

Exclusive
Taryn Paris
Mon 02 Nov 26

Why the Willy Wonka of Hotels Keeps Buying the Hardest Assets

Development Potential

VIEW LISTING

Hold, Don’t Fold: Developers Keep the Faith as Lenders Double Down

Office’s Comeback Stalls, But Smart Money Isn’t Blinking