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High-performing waterfront hotel business goes up for sale
High-performing waterfront hotel business goes up for sale
One of Napier’s best performing hotel businesses been placed on the market for sale. The 60-room Quality Inn Napier is one of the city’s few commercial accommodation providers which straddles both the corporate and leisure customer sectors.
The property is the only hotel on the Marine Parade strip with a swimming pool, gymnasium and fitness facilities, full restaurant, and bar. With Hawke’s Bay’s in-bound tourism numbers at an all time peak, the business owners are making of the most of the opportunity to sell up in a buoyant market. The owners will however retain ownership of the land and buildings in a leasehold arrangement..
Latest data from Statistics New Zealand records that international tourists are coming to Hawke’s Bay in record numbers – some 278,455 visitors for the 2015 calendar year, up 16.1 percent on 2014. Meanwhile, domestic guest nights simultaneously rose 4.6 percent to 751,658.
The data also recorded that the average length of stay for guests in Hawke’s Bay rose from 2.13 nights in 2014 to 2.21 nights in 2015, while the average occupancy rate for motels, hotels and lodges – excluding holiday parks – sat at 49.7 percent.
The Quality Inn Napier hotel was built in the mid-1970s as the Napier Travel Inn. Since then, the premises has undergone a number of refurbishments – with the last of those in 2013 which raised the property to a four--and-a-half star Qualmark rating.
The hotel is the preferred accommodation provider in Napier for Government departments such as the police, the Accident Compensation Corporation and the Department of Conservation, alongside corporate clients ranging from Air New Zealand, ANZ bank and DB Breweries through to Dominoes Pizza and retailer Noel Leeming.
The Quality Inn Napier business is being marketed for sale by Bayleys Hawke’s Bay salespeople Bill Brown and Sam MacDonald, with an asking price of $1.2million.
Mr MacDonald said Quality Inn Napier’s revenues outperformed market averages - rising 8.6 percent in the 2014/15 financial year compared to the previous 12 months. Similarly, the hotel’s net profit grew over the 2014/15 financial period – up a healthy 11.5 percent on the previous 12 months thanks predominantly to increasing room yields.
Mr MacDonald said the building’s owners would grant a new lease of up to 30 years to the successful business buyer – with annual rental of between $440,000 - $460,000, depending on the gross revenue generated by the business’s accommodation activities. The Quality Inn Napier operates under the Choice Hotels Australasia marketing umbrella.
“The property’s rooms are
configured from studio layouts through to two-bedroom
executive apartments. Room rack rates begin at $155 per
night,” said Mr MacDonald said.
“The hotel already
has strong advance booking numbers right through until
Christmas– thereby delivering an instant cash-flow to any
new ownership.”
Mr MacDonald said a regular and
comprehensive maintenance schedule had been the cornerstone
of Quality Inn Napier’s annual operations calendar - so
all buildings, interiors, and furnishings were in above
average condition.
The dual-storey business employs four
fulltime staff in receptionist and housekeeping roles, with
a further six part-time personnel assisting with reception
duties, housekeeping and laundry responsibilities.
Mr Brown said Hawke’s Bay’s tourism calendar was divided into the summer and summer-shoulder periods which recorded high numbers of domestic free-independent-travelers and international guests, and the more domestically-focused autumn/winter quarters where guest nights were predominantly filled by weekend bookings from Auckland, Wellington, Hamilton, Tauranga and Rotorua.
He said the Quality Inn Napier benefitted from being able to service both the corporate and leisure traveler markets – thereby smoothing out many of the peaks and troughs experienced by smaller stand-alone hotel and motel operations.
“A number of competing accommodation properties in Napier have chosen to take profits out of their businesses over the past decade in periods when times were good. In contrast, Quality Inn has re-invested a considerable portion of its profits back into its operations through maintenance and marketing.
“That strategy has paid off - with the property consistently recording above-average occupancy rates compared to several other hotels which have, in effect, become run-down and are now missing out on corporate bookings which demand higher levels of accommodation.
“Quality Inn Napier has also maintained its rates above average yields for the sector, again, justifying those rates through the quality of the premises and room interiors.
“The property has strongly benefitted from its franchising agreement being part of the Quality brand. Within the franchise contract is a reservation system directly linked tot the major travel agencies including House of Travel, Tandem Travel and Air New Zealand, as well as the online booking services such as Wotif, Expedia, Trivago, and booking.com.
“All of these systems are instantaneously updated utilising real-time room availability programmes to avoid over-selling of rooms and thereby maintaining yield management. The Choice and Quality Inn brand also delivers a substantial amount off corporate bookings – including group travel and conferences.
A 56–seater restaurant and bar underneath some of the Quality Inn Napier’s waterfront-facing rooms is separately tenanted to a specialist food and beverage operator who works in tandem with the rooms operator.
ENDS
Bayleys Real Estate
New Zealand
Bayleys is New Zealand's largest full-service real estate company. We offer expertise in the marketing and sale of a wide range of property, including residential real estate, farms and lifestyle blocks, and commercial and industrial property. This includes tourism and business sales such as hotels and motels. We also cover the real estate markets in Fiji and other Pacific Islands.
Bayleys also provides a complete property and facilities service including property management and valuations teams focused on achieving both Owner and Tenant satisfaction.
No other real estate company can match our breadth of coverage across all market sectors throughout New Zealand.
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