How this couple bought two islands for $15,000 and turned them into a $30 million business

Photo: Song Saa Resort, supplied.

It was meant to be a 12-month stint working and travelling around Cambodia. A pit-stop on the way to an advertising executive role in New York City – the job of a lifetime.

However, sailing the Koh Rong Archipelago of Cambodia in 2006, Rory and Melita Hunter saw a new opportunity and, as you do, bought two islands in the South-East Asian country.

Almost a decade on, the couple have built an awarding winning, $30 million luxury resort and are now looking to take on the rest of the region.

“At the time we figured it would be a fun place,” says Rory. “We were young, we were in our twenties, and thought we would have an adventure. When we got there, we felt a real sense of opportunity, anything was possible… it was a really exciting place to be.

“My wife and I had talked about doing something together in property and it seemed like a good place to do it.”

In 2006 he resigned from the ad agency and founded the resort, “Song Saa”.

“Originally we were just going to do the developing side of the operation. We were speaking to Four Seasons and we had a private equity group at San Francisco… but that was end of 2008 just as the financial crisis was reaching its peak.

“Then, a week before Lehman Brothers crashed, Melita was diagnosed with cervical cancer, so we were on the first plane back to Australia.”

Their plans for the islands faded as they concentrated on Melita’s health. Miraculously, after six months of operations and treatment, she was given the “green light” and the couple decided to start over.

“We thought we’ve got each other, we’ve got these two little islands, let’s go back and give it another try. She can design it and we can run it.

“What’s the worst that can happen?”

The Hunters at the resort. Photo: supplied.

Without these unique events, Rory says there was no way the couple would have become hoteliers.

But it wasn’t without a few bumps along the way, especially considering Rory says they were the first foreigners to buy an island in Cambodia for the development of a hotel.

“[No-one had] ever done anything like that before, and as it turns out it wasn’t that easy,” he admits.

“The first part was really simple. We came back with brown paper bag of money and got the neighbour to witness the transaction.

“We bought it for $15,000, but that was just basically for possession rights – it was 99-year-lease that we negotiated with the government later – so we knew we weren’t buying secure tenure… and the next part of the process was incredibly complex.

“There was no clear, defined path for us to follow. We had to ask people, from my lawyers to various government departments ‘How do you own an island?’, and initially no-one knew.

“It was at the time where the Cambodian government knew tourism was a key pillar for the economy and that Siem Reap was able to drive that demand… but most people would only stay in Cambodia for two nights and move on. So they knew they needed to develop the islands and the coastline to attract people to stay longer in the country.

“And they were doing this just as we asking around, so we were very fortunate to be asking the right question at the right time.

“Now that we’re up and running and winning lots of awards, and regularly voted among the top resorts in the world, they (the Cambodian government) are incredibly proud. And we’re proud to be a part of changing the conversation (about Cambodia).”

To date, $25 million has been invested into the project.

“We’ve put in probably over a million in ourselves but the rest of it is all through external sources; equity funding and we’ve sold a lot of villas which has helped cover some of the construction side and operation costs,” Rory says.

“The total valuation is circa $30 million and we’re in the process of going through a capital raise for our next project.

“We’re doing $20 million this round and then the idea is to do a much larger round this time next year to really scale it out.

Rory added that the latter round would be around “200 million”.

“Now that we’ve created a brand and we’ve got a track record for one property, we’re looking at how we can scale that out across Cambodia and South-East Asia.”

Song Saa established Cambodia’s first marine reserve. Its spans across 100 hectares. Photo: supplied.

“We’re a small young company, so for us to be able to compete with well-established developers and hotel brands and operators, for us to be able to go head-to-head with those guys, that would be really tough. What we want to do is operate on the fringe, in markets where there is more risk, where there is more work, so the bigger players are less likely to enter.

“(South East Asia) is a place where we can compete and we can build up our strengths before we look to the more established markets. It is a playing field where we can compete and, on the demand side, it is where more and more people want to go – these untouched parts of the world. As opposed of going to Phuket and Bali time and time again.

“It’s also these markets where the public sector doesn’t have the sort of resources to do the work that we are doing and that’s where the private sector can really play a role.”

And this luxury accommodation spread across on two islands in the Koh Rong Archipelago is more than just a hotel.

“When we first founded the island and started cleaning it up we began to appreciate some of the challenges that the locals were facing, and because we were the first to really do anything on an island, it came with a big sense of responsibility to lead by example and do the right thing,” explains Rory.

“We started out by creating the country’s first marine reserve, and then we started working really closely with the community about solar waste management systems.

“Once we started to realise how disconnected they were from education and access to healthcare we started putting initiatives on those two fronts. Then the conservation and the community side started to scale and got to a point a couple of years ago where it reached as much as we could do.

“Because it was just being done as part of the business you can’t access donations and those sort of things. So we separated it and created the Song Saa Foundation.

The Song Saa Foundation supports both conservation and education initiatives. Photo: supplied.

“While they are very independent organisations, they need each other. The foundation needs the infrastructure that the resort provides otherwise it could never be doing the work it is doing, and the resort, if it wasn’t partnered with the foundation then it wouldn’t be a good community and good global citizen.”

In saying that, Rory says the brand isn’t evangelical about the work that they do.

“We really believe in it but we have the door open. If the guests want to walk through and see the work we’re doing on the other side that’s great. But if guests are just looking for luxury then that is absolutely OK too – after all, we are a luxury brand.”

Their winning philosophy driving this expanding hotel brand? Simple:

“How can a luxury hotel be a positive, powerful change agent to drive conservation and community development in these remote parts of the world.”

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