In this episode of The Inner Chief podcast, I speak to world-renowned hotel developer, Rory Hunter

Rory has led multiple organisations and the development of award-winning properties across Australia and South-East Asia, including the Song Saa Private Island, which was named one of the top 10 Luxury Hotel Developments of the last decade globally.

His latest venture is MODEL – a new, Australian build-to-rent group that is committed to creating meaningful impact for future generations.

Rory previously founded SoHo Partners, and in 2013, he established the Song Saa Foundation, an independent NGO dedicated to preserving Cambodia's marine environment. A highlight of the foundation includes creating the country's first ever Marine National Park in partnership with Monaco's Prince Albert.

Rory has won numerous awards, including National Geographic’s Leader in Sustainable Tourism, and is also a World Economic Forum Young Global Leader, and a Global Board Member of the Young Presidents’ Organization Sports and Outdoors Network.

In this episode we talk about:

• How he harnessed the entrepreneurial spirit he possessed from a young age
• Buying an island in his twenties and building an acclaimed resort on it
• Build-to-rent development that considers the planet, local environment and the locals instead of profit, and
• Finding forgiveness, love, acceptance and inner peace by sailing solo across the ocean on his way home to Australia.

Thanks to former guest, Daniel Penny, for introducing me to Rory.

Connecting with Rory Hunter

You can connect with Rory via LinkedIn and the MODEL website.

Books and resources

Tomorrow’s too late (white paper) – by Rory Hunter

I love the Churchill quote, “Success is not final. Failure is not fatal. What matters is the courage to go on.”

On buying a remote island

• It was just such a special part of the world that we thought that the economic growth would really take off and that this would be a way to do something quite significant. It was the first project of any kind to be developed on the coast. And so, it came with this beautiful opportunity, but a deep sense of responsibility to lead by example. And so it wasn't about building the world's most beautiful resort. It was really about building one that reflected our values. 
• I do a lot of free diving and multiple times I felt the reverberation of dynamite fishing while I was under the water. You could really see that the damage that was happening to the fisheries and the ecosystem. 
• Through conversations with the women, we really understood how tough it was in these villages; they were the quintessential poverty trap. If you were born into this village as a woman, there was no opportunity. As a man, it was fishing, which is declining. The only two opportunities other than that were illegal logging or illegal poaching.

On community impact

• There was no access to healthcare, no access to education, and so pretty early on, we could see that we could weave together all those different stakeholder interests, the communities, the environments, what our end guests would want, what the government would want, what we assumed and hoped our investors would want.
• We truly thought and hoped that by doing that, it could be a catalyst for much broader change. We could demonstrate that there was a way for tourism to really be an approach for lifting people out of poverty. The marine conservation side was a no brainer, but the community was another major aspect.
• We started off very humbly. There was no waste management system; rubbish would be thrown on the ground and there would be no institutional infrastructure to manage that. So we created a solid waste management system, we cleaned up the village, transformed it, and the sense of pride that they went through was amazing.
• The more we collaborated, the more they could see. It's that old saying, “Don't tell me how good you are, show me.” We were able to demonstrably show them that we really cared and we really meant what we said, and the trust continued to build and to grow.
• I think more importantly, we were giving them a vocation. And that then is something that's tradable. And that's how you get out of the poverty trap. You've got a skill that's portable, and you could move elsewhere and you can get out of that village. At the same time, without access to education and healthcare, the opportunities are pretty limited.

On some of the practical challenges he faced

• We had to look at what was the most sensible way to do things, how we collaborate, how we align interests, how we do something that reflects our values, but at the same time something that is really meaningful that guests will want. It was a global exemplar for how tourism can be this game-changer. It was obviously pretty difficult, but it was so meaningful.
• As an entrepreneur, it's truly intoxicating because you're like, “We can do this, we can do that.” It also means that everything's difficult, it’s hard-won wisdom. It's country risk, which was something that always came up when I'd be raising capital. There are changes that you just can't control. So you have all these beautiful ideas, but if they're not done within a regulatory framework that supports that, then sadly corruption wins over ideology every day of the week.
• I look at it like a tapestry; they are very, very complex places to do business in. So for me, step one was always to be cognizant that I'm a guest and it's their home, not mine. 
• Humility is the most important character trait when trying to build trust. So asking questions, listening, making sure that they don't perceive you as a threat and that you're not coming in with ideas, you're not belittling them, you're not disrespecting them.
• Then it's really trying to understand all of the different aspects to the playing field. So that's everything from who are the companies involved and understanding who they are, understanding the individuals involved at a professional level, at a political level, at a local level, understanding the policy framework, the political players and broader trends, not just economic growth. Until you understand it, you can't navigate it.
• There are people that think in ideas and visual thinkers – they look at something and see what could be rather than what's already there.

On sailing home from Asia to Australia

• Agency is such a huge part of the human experience and so with all this chaos happening in my professional and private life, this felt like one thing that could be mine.
• I was grieving and really sad and so I was reading a lot of Henry Thoreau at the time and you know he's got some great perspectives on the healing power of nature and for a whole bunch of reasons I thought I'll sail home. I thought that'd be a good place to cry and to heal. Partly because I wanted to go home on my terms rather than with the proverbial tail between my legs.
• When we are under immense stress, our cognition is seriously impaired. We all make mistakes. We all try to be the best version of ourselves, but it's often hard to see that. We often focus on the negative or what didn't work.
• I really love the Churchill quote, “Success is not final, value is not fatal. What matters is the courage to go on.” And I think when you're an entrepreneur, you get these sorts of highs and lows and they're exhausting. And over that process, I'd sort of forgotten who I was. I'd forgotten the person that I used to be really proud of and I really wasn't in a good place. And so more than anything I went because I thought I needed to be alone.
• However, I spoke to my friends and parents more in that six weeks than I had the previous six months. And all the noise from the chaos of COVID and media and shareholders and stuff, that just peeled away.
• I was terrified probably half the time. There's nowhere to hide out there. It's simply just you. And so you, you know, success or failure is really on your own shoulders. And so there's something really quite beautiful about that.
• The one constant out there is change. It's never ever the same. Some people would ask If I’d get bored looking at the horizon, and I'd respond with no because it was never the same; it changes so often. And I think as humans, we really struggle with change, we want certainty, but of course we can't get it. So it’s best to just embrace that change and think about it as a rhythm.

On discovering build-to-rent

• I’d heard these snippets of this build to rent thing and I thought that sounded interesting. The more I scratched that itch, the more I realised it was very, very similar to my previous business, where you've got long-term ownership. It's very customer-focused as it's all about how you deliver a great experience for your tenants.
• It's primarily an operational business, just like a hotel; as soon as it's built, that's, that's the easy part. But having that ability to spend the extra money upfront, that ensured it's global best practice, both operational and the materials that you use.
• Australia's got these three concurrent crises. We've got the climate crisis, a housing crisis and a mental health crisis. And so my starting point was whether the built form, specifically built-to-rent, could help address all three, and if it could, how could I be a part of that? And what would be my competitive advantage given it's effectively institutionalised from day one.
• I really wanted to make sure that my next business was really well thought out strategically and that it wasn't driven by a passionate idea, it was driven by sound logic. So I spent six months writing a white paper to find out if it was too expensive to build sustainably.

On the problems of traditional property development

• Their short-term view is all about the lowest cost and the quickest return as opposed to our view, which is the highest value and the maximum long-term return.
• So much of Australian housing is broken, but particularly the way we sell apartments, they're not professionally managed, which means that tenants have invariably a really bad experience.
• They don't have any tenure security, so that means they can't invest in the neighbourhood they live. They're constantly anxious about how long they'll be there. They're not treated like a customer. It's just a huge power imbalance. 
• And because the developers' incentives are really about short-term returns, there's no incentive to really build global exemplar projects. What I love about Build-to-Rent is it flips that on its head; it's all about the customer.
• How do we give Australian renters more than just tenure security? How do we allow them to feel proud of where they live? How do we give them the confidence to put roots into their neighbourhood and invest in their local community? And how do they get to know and become friends and trust their neighbours? 
• I think a huge part of life, be it the people that are in our sphere of influence or those that our organisations touch, is creating a sense of safety and security and there's no better way to do that than through housing. And so it means you spend a bit more upfront now, but what you've got is this project that's inherently resilient, and it's therefore de-risked. And by reducing risk, it means you deliver greater return.

On the global build-to-rent industry

• Build to rents are 0.2% of the housing market at the moment, which equates to about $20 billion. We're about five years behind the UK. Once we get to their penetration, about 3%, you're looking at a $300 billion asset class.
• Australia is about 20 years behind the USA, based on their penetration. This is a two plus trillion dollar asset class. So we're talking really, really significant growth potential.

On hiring executives to his team

• I think the job of a CEO is to really focus on three things: finance, strategy, and culture. And so I think you need to assume the key technical skills there. I would always hire on attitude over aptitude.
• And so it's really trying to understand if that candidate is the right culture and will they fit within the culture that we're trying to create? It's the hardest part to work out. It's easy to work out if someone's got the hard skills. It's often very, very hard to work out if they've got the cultural fit.
• I would choose having the right cultural fit over technical skills every day of the week, because you can train the hard stuff, the hard skills. If you hire the wrong person culturally, that's on you, it's not on them.

Final message of wisdom and hope for future leaders 

• Find balance in life before you're forced to. What I mean is emotional balance, psychological balance, physical, nutritional, sleep, all those pieces.
• I speak to any senior person in business and they'll either have been burned out or be going through burnout or are about to go through burnout. And it sort of creeps up on you. You know, you think you're working hard for all the right reasons, but it's just simply not sustainable. 
• And so do that inner journey and that inner work earlier and be curious about it and see it as a real tool and a real asset because I've done a lot of inner work, but I've done it because I've been forced to.

Deal hope,

Greg