Beach lodge to court ‘flashpackers’

5:00 AM Saturday April 15, 2017 True Commercial

The lodge, directly off Buffalo Beach (above), has four separate buildings licensed to sleep 72 guests. Photo / Supplied

The only waterfront backpackers’ accommodation hostel in the tourist-magnet township of Whitianga, is now for sale.

Land, buildings and business belonging to On The Beach Backpackers will be auctioned by Bayleys Hamilton on April 27.

The operation at 46 Buffalo Beach Rd is being marketed by commercial salesperson Josh Smith, who points out that it is the closest accommodation venue of its type to the main beach in Whitianga.

“That’s a feature backpackers actively seek out; they want views over the water, plus an opportunity to enjoy the likes of a takeaway dinner on the sandy shoreline,” says Smith.

“This purpose-built accommodation venue — comprising four separate buildings licensed to sleep 72 guests — is directly opposite Buffalo Beach.”

Established in the 1980s, today the 760sq m of lodge buildings sit on 2152sq m of land, configured in a range of room sizes.

There’s single-sex and mixed gender bunk style dormitories and single rooms, through to share twin and double rooms.

Each of the four buildings has its own kitchen, dining room/lounge, and separate bathroom facilities.

On The Beach’s accommodation stock also features four self-contained family units, while an upstairs three-bedroom owner/managers residence overlooks the dual entrance tar-sealed driveway with access of both Buffalo Beach Rd and Bruce St.

The business is a member of the Youth Hostel Association umbrella marketing brand, founded on a traditional backpacking clientele.

Smith describes it as, “a stereo-typical backpackers accommodation — catering to the budget end of the free independent traveller market”.

Though the business trades on a sustainable balance sheet with absentee owner/operators, the opportunity for any new owner is to upgrade the existing amenities into the new generation of ‘flashpacker’ accommodation.

“While this would result in decreasing the pool of available bedding stock, higher per room rate revenues could be generated to more than compensate for the change in focus,” says Smith. ‘Flashpacking’ the business to a higher room bracket could see the re-configuration of the shared bathroom amenities, the potential liquor licensing of the premises, and creating the likes a library or media room.”

Chattels include four kitchens stocked with domestic grade refrigeration and cooking equipment, four corresponding pantries of foodservice cooking and dining utensils, two commercial-grade washing machines and driers servicing both the business and guests, all back-office operations and accounting systems, all bedding linen and Manchester, and a full suite of recreational toys, such as kayaks, boogie boards and bicycles, for guests.

The venue — encompassing three land titles in an L-shape — is three blocks from Whitianga’s central business hub, and has unobstructed views over Mercury Bay. Guest parking is available both on site and directly in front of the property.

The business is staffed by a full-time manager and full-time housekeeper, supported by two part-time housekeepers rostered cleaners brought in as occupancy demands.

“As with most accommodation businesses, On The Beach Backpackers tracks its busiest trading period over the December-to-March summer phase, where the occupancy level regularly sits at around 86 percent,” says Smith. “The quieter winter months can see occupancy rates sit as low as 15 percent. It’s a case of ‘making hay while the sun shines’, then hunkering down over winter.”

Latest commercial accommodation data from Stats NZ for the Coromandel region in January this year show that visitor guest nights were up seven percent year-on-year, with the average length of stay in backpackers category accommodation being 1.81 nights — up from 1.76 nights in January 2016.

The data also noted there were 10,288 backpacker stay nights recorded in Coromandel during January for an average industry occupancy rate of 65.6 per cent.

On The Beach’s revenues reflected the positivity emanating from the tourism markets — with the 2015/16 accounts showing increased income from the 2014/15 financial year. Dorm beds in the Whitianga hostel are $30-a-night, while most private rooms are $80-per-night, with one double ensuite unit letting for $96-a-night.

“There is room within this business to increase operational efficiencies — which would of course flow through to the bottom line. And with supporting marketing, there is also the potential to ‘creep’ room rates higher, while remaining competitive in the backpacker price bracket and psyche.”