Donna and Bruce Crosby in front of the beachfront villas they built at as they say goodbye after decades running the Papamoa Beach Resort. Photo / George Novak
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It's the end of an era for three iconic holiday parks in the Bay of Plenty as their longtime owners sell up and move on. Here, Bay of Plenty Times Weekend reporter Samantha Motion writes about how the historic sale came about, and the new owners.
A United Arab Emirates/Australian-owned company has spent millions snapping up three holiday park businesses in two Bay of Plenty summer hotspots.
The Papamoa Beach Resort has been sold after 54 years in the ownership of a Pāpāmoa family, and the long-time local owners of the Top 10 Waihi Beach Holiday Resort and nearby Beachaven Holiday Park have also sold to the same buyer.
The move has been described as the start of a trend towards the corporatisation of New Zealand holiday parks, as
Baby Boomer owners head towards retirement.
The Overseas Investment Office (OIO) granted consent for two of the three deals because they involved leasehold acquisitions of reserve land considered "sensitive" under the Overseas Investment Act.
According to a just-released OIO decision, the buyer is Tasman Tourism New Zealand Limited, a company registered in New Zealand but wholly owned by two overseas entities.
Australian private equity firm Tasman Capital Management Pty Ltd, which has holiday park management experience, owns 10 per cent and Abu Dhabi-based investment company Al Sariya Third Commercial Investments RSC Limited owns 90 per cent.
The reserves the award-winning resorts lease are owned by
Tauranga City for Pāpāmoa and Western Bay of Plenty District for Waihī Beach. Both councils confirmed they were aware of the lease transfers.
The Beachaven Holiday Park is on Western Bay council-owned land that is not considered sensitive, so the OIO was not involved.
Tasman Tourism was planning to develop the three parks, adding more accommodation units, improving facilities and creating construction jobs in the process.
It was committed to the plan "despite the Covid-19 pandemic", the OIO said.
Rob Nichols of Tasman Capital said the organisation owned seven holiday parks in Australia and was
buying another three.
He said there was no cap on how many holiday parks Tasman Tourism New Zealand may look to buy over the ditch as it grew its portfolio, and it wanted to become a leading provider of nature-based camping and caravanning holidays in the country.
Nichols said the corporatisation of holiday parks in Australia had started about 15 years ago and was now coming to New Zealand.
He said corporates had more access to the significant capital needed to maintain and grow holiday park businesses - an attractive prospect to "mum and dad" owners looking to sell.
"Many are Baby Boomers who are looking at retirement and maybe the family don't want to take the business on."
He said the Abu Dhabi investor was a very large sovereign wealth fund backed by the United Arab Emirates Government. It operated in a similar way to NZ Super, taking a long-term investment approach.
Nichols said the business was looking to streamline marketing for the parks and - once borders reopened - attract more international tourists, which he said would boost the regional economy.
A New Zealand team had been hired to oversee the businesses, led by general manager David Aflallo, president of the New Zealand Holiday Parks Association.
Aflallo said he had 16 years in the industry. He said there were about 67 staff across the three parks, and that number would grow over summer.
The Pāpāmoa business was sold by Bruce and Donna Crosby, who settled on Monday. Ian and Vicki Smith settled the sale of their two Waihī holiday parks on Friday.
The sale process for each took more than a year.
Both couples said they had only dealt with the Australian buyers and did not know where financing for the deal was coming from until the OIO decision was released, revealing the Middle East connection. They had no issue with it.
Aflallo was a long-time friend and respected professional, and they were happy to leave their cherished businesses, staff and long-time guests in his hands.
Bruce - whose parents bought the park 54 years ago, with he and Donna taking over 34 years ago - said they had not even been thinking about selling when they were approached, despite being around retirement age.
He said he even had plans lodged with the council to build about $1.3m worth of amenities and units, when he had an "epiphany".
"We said, that's crazy at our age. We will never see the benefit of all this new investment. So we actually pulled it out of the council."
Around the same time, the pair had been approached about selling by an industry broker with Australian connections.
A profile of the business was presented at an industry conference in Australia and "away we went".
"This was a way of us getting out and realising some equity and stop thinking about it."
He expected New Zealand would see more corporate buy-ups, in this and other industries.
"Mum-and-dad businesses like ours that have been built up over 30, 40 years are basically - if they're not being transferred to the next generation - being bought up by corporates.
"It's just the way of the world."
He said the business was in great shape, even after Covid-19, with guest nights over the past three months up 36 per cent on last year as Kiwis holidayed at home.
"The place is booming."
Ian and Vicki Smith bought the Top 10 Waihī Beach Holiday Resort 25 years ago, later adding the Beachaven Holiday Park.
Ian said they had been preparing to sell for a while. They put a management team in a few years ago and moved to Tauranga, putting the parks on the market with the expectation it would take a few years to sell.
"We thought that rather than getting tired - I've seen too many parks decline because people lose interest - we would go to the market earlier and give ourselves up to five years to sell, so it's worked out nicely in that respect.
"It's been a fantastic journey."
He said he would continue in his role of chairing Top 10 New Zealand while they considered buying another park.
"You stop, you die, don't you," the former fire chief said.
He said his daughter was looking at returning to New Zealand from overseas and buying a holiday park so they also hoped to mentor her.
Smith and Crosby said people tended to look down on holiday parks, failing to understand their investment potential - as well as how many millions they could sell for.
Neither could reveal the purchase price.
Jefferies and family will enjoy a leg of lamb with summer sides.