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Youth Hostel in Gisborne for sale as going concern

Youth Hostel in Gisborne for sale as going concern

Gisborne’s long-established Youth Hostel Association (YHA) accommodation business has been placed on the market for sale as a going concern with financials showing sound results over several years and the potential to further expand business offerings.

The current owners Clive and Kanlaya Dean have owned and operated the YHA for a decade and say the YHA has operated from the same Harris Street address for around 30 years. It is understood that prior to this, Shell BP Todd owned the buildings and used them as their Gisborne headquarters.

Based in an Arts and Crafts-style 1920s weatherboard residence originally built for one of Gisborne’s founding families, the Chrisps, the YHA is in a quiet residential street in the suburb of Kaiti close to the city centre and minutes from popular Wainui Beach.

The property has a land area of 2899 sq m, total building area of 520 sq m, and the main residence remains in largely original condition with an extra bedroom and laundry added on at some stage. There is an additional cabin on the site which was moved onto the property in 1974 and used as the warden’s quarters in earlier YHA hostelling days.

Colin McNab and Greg Robertson of Bayleys Gisborne are marketing the venture for sale and say offers are being called for on the land, buildings and going concern business which has averaged 5025 visitor bed nights over the last three years, with almost 5400 bed nights recorded in Rugby World Cup year, 2011.

“There continue to be obvious surges in occupancy around the key events which have placed Gisborne firmly on the visitor map from both a domestic and international tourist perspective,” says McNab.

“The annual Rhythm and Vines music festival which has amassed a huge following over 10 years now attracts around 30,000 people; the Gisborne Wine and Food Festival is growing in popularity, and the region has always been a magnet for the surfing fraternity who flock to the East Coast beaches in search of the perfect break.

“YHA New Zealand was established in 1932 and remains the go-to accommodation provider for budget-conscious global travellers because the hostel network delivers on key fundamentals such as price, facilities, local knowledge, safety, security and membership benefits.”

The YHA is a member-based incorporated society and nationally, the organisation manages 23 hostels and has associate partner agreements with a further 24 independently-owned hostels including the Gisborne operation.

“Our vendors advise us that as an associate partner, they pay YHA New Zealand an annual fee along with a 10% booking fee for any bookings that come via the YHA New Zealand website portal and those bookings originating from a YHA-owned hostel,” explains Robertson.

The Gisborne YHA has 11 rooms and can accommodate 40 people at capacity, along with having additional space available on the lawns for tents when required or requested.

There are 28 dormitory beds available, two standard twin rooms, two standard double rooms, one single room and family ensuited room.

“Clive Dean is a recognised master painter and has put his trade to good use by upgrading the property significantly including a professional exterior paint job,” says Robertson.

“Improvements and upgrades have also been made to the well-equipped communal kitchen area, the guest lounge which features SKY TV, internet access, and comfortable furniture, and the guest laundry.”

There is on-site managers’ accommodation by way of a separate well-maintained and fully self-contained two bedroom flat of a similar era to the main house.

“The owners’/managers’ accommodation allows for cost-effective living options for the onsite management and allows some separation from the main house for privacy and independence,” says McNab.

The property is being sold with a full complement of chattels to allow a new owner to effectively ‘hit the ground running’ and capitalise on forward bookings already in the system.

“Additional income is gained through bicycle and surfboard hire, coin-operated washing and drying facilities in the communal laundry and through the guest purchase of internet data,” says McNab.

“The owners say that there is potential to expand the income streams further by offering tailored ‘stay and surf’ packages and other customised tour deals which may include visits to Whale Rider-country (made famous by the movie) at Whangara, or diving expeditions for instance.”

Owner Clive Dean says it is time for him to exit the business and pursue other opportunities at this stage of his life. Claiming it has been the ultimate lifestyle/work scenario, he singles out two memorable guests from the tens of thousands that have been through the doors over the last decade.

“The long-haired German traveller who arrived at the hostel on foot having carried a life-size Jesus Christ cross all the way from Northland was a stand out,” says Clive.

“He then spent two weeks at the hostel scheming about building a replica Noah’s Ark to parade around New Zealand. Then there was the Japanese guy who arrived wheeling a large kayak on a wooden trolley with salt crusted on his face having paddled from Auckland to Gisborne.

“He broke his journey with us before heading off to paddle down the rest of the East coast to Wellington.”

ENDS

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