Well, Oaks business model is MLRs which is Management and...

Well, Oaks business model is MLRs which is Management and Letting Rights. It works so that some property company will build a hotel and ask Oaks to manage it. They may keep the individual rooms, or sell them to investors. The management is the cleaning, maintenance, booking etc.

So Oaks will try to keep the room occupancy up as much as possible because they earn more based on this.

It's similar to a franchise in the way that you attract franchisees based on a brand name that will attract customers which reduces the risk of having a failed business.

It's kind of similar in the way that you create a good brand to attract franchisees and you provide a good service to keep the business. You create efficiencies by offering the same services across multiple hotels, so the owner of the hotel does not need to worry about marketing or organising cleaners. The key difference is the type of service and the type of customers. Oaks will mostly talk to the owners, which are seasoned investors that expect to sit back and watch their money grow, while Franchisees will expect to interact more with the business to make their own money.

I don't see where efficiencies can be easily made around the business. They might choose to franchise the business offering it to small MLRs that offer limited service such as marketing, booking and training, but leaving some hard work to the owners, but this moves away from Oaks strategy to focus on 4-4.5 star. They actually sold off a lot of the smaller ones a couple of years back; but with a franchise management team, they might be able to return to the ultra smalls.

Anyway, Oaks is certainly undervalued, but as we've all been asking, where is the money coming from. I notices RFG has spent the last year improving their debt, but not enough for something as big as Oaks.