Queenstown lodges in receivership are turn-key prospects

4:11 PM Tuesday March 8, 2016 Colin Taylor

The Remarkables Mountain Lodge.

Two upmarket lodges in Queenstown have been placed on the market for sale in a receivership process.

Remarkable Mountain Lodge and Evergreen Lodge were owned and operated by private company Sleep Overs Ltd which was placed in receivership earlier this month.

The two properties are now trading in receivership under management of the receivers KPMG and are being marketed for sale by Larissa Lynch and Mark Martin of Bayley’s Queenstown via a tender process closing on March 18.

“The properties could be tendered for individually or jointly,” Lynch says. “In both instances the land, buildings, chattels, and businesses are for sale with forward bookings already logged in at both locations.

“As fully functioning businesses, the room configuration of both properties means they are virtual ‘turn-key’ commercial operations for anyone wanting to establish their own boutique accommodation business at either address,” says Lynch.

“With business activities still running from both properties, they are ideally suited to be taken over by new management in time for Queenstown’s peak winter season.”

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The lounge within the Remarkables Mountain Lodge

Lynch said the lodges could prove attractive to existing Queenstown boutique accommodation providers looking to grow their business to a critical room mass – benefitting from shared back-office and operational efficiencies such as marketing, food and beverage staffing, and housekeeping.

“Remarkables Mountain Lodge in particular has considerable upside for growing its revenues through a re-allocation of existing resources. The lodge has a separate two-bedroom separate owner or manager’s residence which could quite easily be converted into a premium guest suite. This would have an obvious flow-on effect for revenues,” Lynch says.

Remarkables Mountain Lodge was originally built in the 1930s as the homestead for the then Remarkables Station. The property has undergone two major refurbishments and upgrades since then – once in 1995 and again in 2004 when more rooms were added. The lodge sits on 8188sq m of land opposite the entrance to the Jacks Point subdivision.

Nightly room rack rates at the seven-bedroom alpine-style lodge range from $345 to $545. Guest amenities at the upmarket retreat include a helicopter pad, separate sauna and spa, outdoor swimming pool, bar, guest lounge, commercial-grade kitchen and dining room.

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An aerial view of Evergreen Lodge.

The main building also has two staff bedrooms adjacent to the main kitchen.

Also a boutique operation, the 490sq m Evergreen Lodge has four guest suites, all with en-suites, and has been operating with a rack rate of $695 per night. Guest amenities include a guest lounge, gymnasium and sauna.  The lodge, which encompasses an owner or manager’s living quarters, sits on 1381sq m of land in the central Queenstown suburb of Sunshine Bay.

“Similarly, conversion of the owner or manager’s space at Evergreen Lodge would increase its capacity by 25 per cent and allow for a premium offering in its room schedule,” Martin says.

He quotes the latest Queenstown data in the Department of Statistics Commercial Accommodation Monitor showing that guest nights rose 8.2 percent in December last year, compared to the same month in 2014. “Concurrent with that, the average length of stay in Queenstown rose, while occupancy rates increased from 69.5 per cent to 75.6 per cent.”

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Evergreen Lodge’s lounge features a panoramic view

Martin says further visitor number growth is anticipated with Air New Zealand adding an additional 65,000 seats flying into Queenstown over the coming financial year. “The biggest feeder cities for this growth will be Auckland and Christchurch,” he says.

“The aforementioned report noted that international guests account for 70.3 per cent of all guest nights in Queenstown. The rise in Queenstown’s guest nights was the biggest of any New Zealand region. The data recorded that Queenstown’s motels – a category which includes B&B’s and small lodges - achieved an average occupancy rate of 70.7 per cent in December last year.

“Both Remarkables Mountain Lodge and Evergreen Lodge turned in occupancy rates well below that average indicating that with better marketing and market presence, there is a strong opportunity to grow the revenues of both these businesses,” Martin says.

“At current room pricing levels, both venues are geared more toward international free independent travellers. Any new operator could continue on in that direction, or look at restructuring the value-offerings to encourage a greater percentage of New Zealand clientele.

“Alternatively, either premises could also be operated as serviced holiday homes with guests booking out the entire dwelling as one unit and self-catering.”

Sleep Overs Ltd bought the two properties in 2013 as existing accommodation providers operating independently of each other. Lynch said both lodges could also be purchased for use as private residential dwellings.