🦘 Inflation Behaves Nicely, Airfare Costs Predicted To Fall Further, Ambitious Plans To Revolutionise Renting In The City

G’day everyone!

Here’s what we’ve got in store for you today:

• Inflation Holds Steady In January

• Flight Prices May Finally Start Coming Down

• Bold Plans To Repurpose Offices and Hotels Into Apartments

Let’s have a look at the market snapshot before jumping into the news:

Inflation's Chill Ride: Stays Steady Against the Odds

Australia's inflation saga took an unexpected turn in January, staying put at 3.4% year-over-year, precisely where it camped out in December.

Forecasters who'd bet on a slight uptick to 3.6% found themselves out in the cold, as the inflation rate matched its lowest ebb since November 2021, according to the latest from the Australian Bureau of Statistics.

The main culprits behind the inflationary pressure were usual suspects: food, housing, and insurance, all of which pushed the numbers up, while travel and leisure costs decided to take a breather and drop.

This steady state of affairs might just convince the Reserve Bank to pause its rate-hike rhythm, much to the relief of rate-watchers everywhere.

Despite the anticipation for a bump, this plateau suggests the economic thermostat might be more stable than assumed.

With rent increases holding steady and a dip in the cost of new homes, there's a whisper of hope that the inflation beast might be taming itself.

As the market watches and waits, the question on everyone's lips is whether this is a sign of more balanced times ahead or just the eye of the storm.

Flight Centre's Forecast: Cheaper Airfares on the Horizon

Flight Centre's chief, Graham Turner, has his eyes on the skies, predicting that airfare prices are on a descent path.

After witnessing a 14% drop in ticket costs last quarter, thanks to an influx of international flights, Turner is optimistic about a further 9% reduction in the next six months.

This forecast rides on the wings of increased services from airlines like Malaysia Airlines, Singapore Airlines, and various Chinese and American carriers.

Despite posting a sixfold increase in net profit for the last six months of 2023, Flight Centre's shares took a bit of turbulence, dropping by 8% in early trading, though they later recovered slightly.

Turner, however, remains unfazed, confident in the travel industry's resilience and the firm's strategic trajectory.

Flight Centre's comeback tale is framed by a dramatic cost-cutting saga during the pandemic, including shuttering stores and slashing expenses.

With transactions soaring to $11.3 billion, up 15% from last year, and a robust profit forecast for the fiscal year, the travel giant is navigating towards its target margins with the wind at its back.

This optimism is set against a backdrop of changing travel habits and a slow revival of inbound tourism, awaiting the return of Chinese tourists to fully recalibrate the industry's compass.

Pro-invest Group's $500M Play to Transform Hotels and Offices into Chic Rental Homes

Pro-invest Group is shaking up the real estate scene with a bold $500 million equity raise aimed at converting tired hotels and office blocks into a buzzing $1 billion portfolio of co-living and key worker apartments.

Over the next four to five years, they're setting sights on creating 2000 units of affordable housing nestled close to major cities, tapping into the strong demand for cost-effective living spaces.

Best known for its $3 billion hotel empire, Pro-invest is venturing into the build-to-rent sector with a keen eye on co-living spaces—where smaller units and shared amenities offer a wallet-friendly alternative to traditional rentals. 

With a pipeline of conversion projects already in the crosshairs and the first announcement expected within months, Pro-invest is cooking up a new "Flexible Living" brand to house its ambitious plans.

From Singapore, where Pro-invest's founder Ron Barrott is rallying investors, to the drawing boards of future developments, the group is poised to redefine urban living.

By converting existing structures, Pro-invest not only champions sustainability but also promises value-add returns for investors keen on making a mark in the affordable housing market.

With sights set on matching its hotel portfolio's scale, Pro-invest's urban makeover is just getting started, promising to breathe new life into underused buildings and bring affordable chic to city centers.

Guzman y Gomez's Spicy Sales Leap Amid Expansion Fiesta

Guzman y Gomez (GYG) is on a hot streak, dishing out a whopping 31% surge in global sales to $471 million in just the December half.

The Mexican quick-service chain isn't just adding salsa; it's adding stores, with 16 new outlets bringing its global count to 209.

The real zest comes from the existing outlets, though, which notched up an 11% sales jump, thanks in part to a booming digital sales channel that now accounts for a hearty 40% of the network's sales.

The digital dive is deep, with delivery aggregators and GYG's own app and web orders sizzling up 49% from last year. 

Australia is where the heart is, with 183 restaurants contributing to a 31% revenue rise to $439 million. 

The chain is not just feeding Aussies; it's spreading its flavors to Singapore, Japan, and the US, where it's just beginning to spice up the Chicago scene with a 400% sales jump.

As GYG looks to the future, it's eyeing a whopping 800 potential new stores in Australia alone, with a mouth-watering plan to open 30 to 40 new restaurants yearly.

Co-CEO Hilton Brett is ready to disrupt the fast-food world, one taco at a time, as GYG carves out its path to global domination.

That’s All!

If you’ve read all the way up to here, we just wanted to let you know that you’re an absolute legend!

Time to go to work and show off how clued up you are about what’s going on in the business world 💪

Keep an eye out for tomorrow's newsletter. Until then, have an awesome day folks!