TelferYoung (Nelson) Limited
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Nelson Newsletter - Autumn 2006
6 July 2006
Tourism is Vital to the New Zealand Economy
New Zealand Tourism
The New Zealand tourism industry is a vital cog in the New Zealand economy playing a substantial role in job creation by supporting one in ten jobs in New Zealand.
Tourism is also a major contributor to export earnings generating approximately $7.4 billion pa in foreign exchange. The tourism industry as a whole, domestic and international, contributes $17.2 billion pa to the Gross Domestic Product. Tourism in New Zealand is made up of ten major public listed companies and between 13,500 to 18,000 small to medium enterprises creating 102,700 direct tourism jobs and 69,300 indirect.
Tourism beneficially impacts directly on a range of sectors including transport, accommodation, retail, catering and financial services with many other sectors benefiting through the provision of goods and services including construction, printing, publishing, manufacturing and insurance.
The Year In Review
For the year ending 31 March 06, Statistics New Zealand figures for the Latitude Nelson region indicate total guest nights were on a par with the previous year at 1.206 million with an average stay length of 2.1 nights and overall occupancy of 27.4% across all accommodation types.
Although guest nights remained steady, the demand pattern varied from the 2004/2005 year with decreases in the key months of April, December and March. This was countered by an increase in the January and February figures.
Statistics for individual accommodation sectors within the Latitude Nelson region provides the following analysis:
Type | Guest Nights | Guest Unit/Night | Average Occupancy Rates |
| Hotels | 89,024 | 1.6 | 42.1% |
| Motels | 415,800 | 1.9 | 53.3% |
| Hosted | 37,406 | 1.8 | 28.9% |
| Backpackers | 195,451 | 1.1 | 43.6% |
| Caravan Parks | 468,546 | 2.7 | 13.1% |
Forecasts 2005-2011
The Tourism Research Council in New Zealand and the Ministry of Tourism forecast visitor arrivals to New Zealand are expected to increase by an average of 4.7% pa over the next six years. This represents an overall increase of 38%.
Total guest nights are expected to increase 33%, and although this is less than projected arrival numbers, this is in line with the worldwide trend of a decline in average length of stay.
Who Is Your Target Market
Tourism New Zealand have defined New Zealand's ideal visitor and target market as the interactive traveller®.
Interactive travellers® are people who:
- are regular international travellers.
- consume a wide range of tourist products and services.
- seek out new experiences that involve interacting with nature, social and cultural environments.
- respect the environment, culture and values of others.
- are considered leaders by their peers.
- don't mind planning and booking holidays directly.
- prefer authentic products and experiences.
- are health conscious and like to 'connect' with others.
- enjoy outdoor activity.
- are sociable and like to learn.
- have high levels of disposable income.
Sixty percent of interactive travellers® travel around New Zealand at a relaxed pace. They travel from place to place, seeing and doing things in three or four regions. On average they participate in 40% more activities than travellers in general.
Interactive travellers® especially like the more personal exclusive types accommodation such as bed and breakfast, boutique hotels and luxury lodges. Although bed and breakfasts and boutique luxury accommodation are seen as the preferred accommodation of the interactive traveller®, budget and mid level hotel/motel accommodation are also important to an interactive travellers® holiday. To target a share of this market, accommodation providers should be providing the following core products:
- friendly and helpful staff - this means operators who are warm, friendly, enthusiastic and passionate about their product and the environment.
- decor of rooms - an emphasis on local features and products rather than generic colour schemes.
- information provided on things to see and do - local knowledge including local history.
- value for money - not necessarily the cheapest.
Accommodation Sales Noted
Arcadia Motel, 34 Golf Road, Tahunanui - 12 unit motel complex sold July 2005 for $1,375,000 as a going concern.
Fairway Lodge, 36 Bolt Road, Tahunanui - modern 2 storey complex of 18 units adjoining the Nelson Golf Club sold July 2005 for $1,530,000
Blue Waters Motel, 66 Golf Road, Tahunanui - 1970's style motel complex of 12 units sold July 2005 for $1,200,000 as a going concern.
Bakers Lodge Backpackers, 4 Poole Street, Motueka - land and buildings sold November 2005 for $945,000 to an investor. Ex Goodmans Bakery building converted to a backpackers in 1998.
Arthur Wakefield Motor Inn, 294 Queen Street, Richmond - the land and buildings comprising a restaurant and 20 unit motel complex January 2006 sold for $2,162,500.
Specialist Valuation Services
Wayne Wootton has recently joined their team as a specialist hospitality and tourism valuer. Wayne has over 25 years experience as a Valuer and 7 years hands on experience operating a very successful accommodation complex.
Wayne is able to provide specialist valuation advice for all types of tourism properties, from going concerns through to land and buildings investments. Valuations can be provided for market appraisals, mortgage security, rental assessments and reinstatement insurance.
Wayne's tip for existing operators:
Accurate financial and performance information is critical in giving certainty to prospective buyers and their advisors. We recommend all operators keep accurate records of unit occupancy and turn over on a monthly basis. This will assist in protecting the value of your assets.
Information we request when preparing a valuation for a vendor or purchaser is:
- last 2 years financial accounts.
- monthly turnover and unit occupancy figures for the same period and year to date.
- up to date chattels inventory.
- copy of all lease documentation.
Acknowledgements
Paul Davis - Latitude Nelson
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Opinions expressed in this newsletter are of a general nature and should be used as a guide only. TelferYoung should be consulted before acting on this information.