Waterfront backpackers lodge placed on the market for sale
The only waterfront backpackers accommodation hostel in the Coromandel tourist-magnet township of Whitianga has been placed on the market for sale.
On The Beach Backpackers directly opposite Buffalo Beach is a purpose-built accommodation venue comprising four separate buildings licensed to sleep 72 guests. Established in the 1980s, the business also has a handful of non-powered tent sites.
The760 square metres of lodge buildings sitting on 2152 square metres of land are configured in a range of room sizes – from singles-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 Road and Bruce Street.
The On The Beach Backpackers land, buildings and business at 46 Buffalo Beach Road are being marketed for sale by Bayleys Hamilton at auction on April 27. Bayleys Hamilton commercial salesperson Josh Smith said the business was a member of the Youth Hostel Association umbrella marketing brand founded on a traditional backpacking clientele.
“On The Beach is a stereo-typical backpackers accommodation – catering to the budget end of the free independent traveler market,” he said.
“While the business is currently trading 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.
“’Flashpacking’ the business to a higher room bracket could see the reconfiguration of the shared bathroom amenities, the potential liquor licensing of the premises, and creating the likes a library or media room.”
Chattels within the sale 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 the back-office operations and accounting systems, all bedding linen and Manchester, and a full suite of recreational ‘toys’ such as kyaks, boogie boards and bicycles available for use by guests.
The venue – encompassing three land titles in an ‘L’-shape – is located three blocks away 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,” he said.
“Conversely, the quieter winter months can see occupancy rates sit as low as 15 percent. It literally is a case of ‘making hay while the sun shines’ the 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 percent. 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
“On The Beach Backpackers is in a fortunate location – being the closest accommodation venue of its type to the main beach in Whitianga. That’s a feature which many backpackers specifically seek out – having both views over the water, and the opportunity to enjoy the likes of a takeaway dinner on the sandy shoreline,” Mr Smith said.
“There is room within the 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, will still remaining competitive in the backpacker price bracket and psyche.”