YHA Wanaka, set beneath alpine beauty. Photo / supplied
YHA Wanaka, set beneath alpine beauty. Photo / supplied
Ninety years of the Youth Hostel Association of New Zealand providing affordable accommodation is ending with its national portfolio of nine properties for sale for a possible $60 million.
The cornerstone of New Zealand tourism which opened in Canterbury in 1932 was dealt a death blow by Covid and this marks the end of an era for the YHAs owned by the organisation.
A further 17 YHAs separately owned will continue to operate, a statement out today said.
YHA Auckland International Backpacker Hostel, 5 Turner St. Photo / supplied
Ian Lothian, YHA national chairman, said the board was left with no option but to permanently close and now sell.
"YHA New Zealand, traditionally servicing international youth visitors, doubled its domestic guest nights over the past 12 months as it reoriented towards more domestic groups and family stays.
"However, the extended Auckland lockdown combined with no prospect of an international visitor market this summer created market conditions that were unsustainable for us," he said today.
International real estate agency Colliers is marketing the YHAs in an expression of interest campaign closing March 25.
YHA Lake Tekapo was only developed recently. Photo / supplied
Some sector experts think the portfolio could be worth around $60m although no price was being revealed today.
The hostels have 410 rooms and 1320 beds. The largest is in Wellington and the $9 million 128-bed Lake Tekapo was only developed recently.
YHA Rotorua in the heart of our tourist zone. Photo / supplied
Dean Humphries, Colliers' national hotels and tourism director, says one buyer might buy all nine or individual investors could pick the areas and styles which suited them.
The association owns five hostels but sold four last year and leased those back from an investor. However, those four are now also being marketed.
YHA Wellington is the largest of the nine properties. Photo / supplied
Today's statement said that four-property sale and leaseback was an attempt to strengthen its financial position.
A further 17 YHAs throughout New Zealand will continue and are not included in the sale. The 17 are individually owned and operated, Colliers' statement today said.
In November, the Herald reported how YHA New Zealand was closing all its hostels.
YHA Queenstown in a prime spot. Photo / supplied
The New Zealand chapter of Hostelling International has said that they had "no option but to permanently close the doors" on December 15.
Simon Cartwright, the general manager, said at the time: "It is an ending none of us wanted but we want to make sure we exit in a way which ensures our people are not left out of pocket."
YHA Franz Josef Glacier Backpackers on the West Coast. Photo / supplied
Hamish Doig, Colliers' investment director leading the sale, said today buyers had shown interest.
"Overseas buyers know the calibre of these facilities and see it as a great opportunity," he said.
Aoraki/Mount Cook's YHA in the depths of winter: now, all are being sold. Photo / supplied
"Now that we have more clarity around when restrictions are ending, the consensus is that there will be a big bounce with international travellers wanting to come to New Zealand because it's such a desirable destination.
"The YHA properties are garnering such interest because of their fabulous geographic spread. Even though our borders are currently closed, the interest we've had clearly signals that New Zealand is still highly regarded internationally as a tourist destination," Doig said today.
YHA Te Anau - accommodation in this isolated area expected to draw buyers. Photo / supplied
Private investor RPZ bought four properties last year as a long-term passive investment, he said. But it was also seeking to sell those properties.
It wanted to partner with YHA but doesn't usually invest in hospitality, he said.
"We're acting for two clients: RPZ and YHA," Doig said.
RPZ had decided to market its four YHAs in with the association's five properties to achieve a "critical spread" for buyers, he said.
"In fairness to RPZ, they bought the assets with a tenant for 35 years but with what happened with Covid and borders closed, that was untenable for YHA and their board has said we need to look at a solvent liquidation of assets.
"They wanted to be able to meet their commitments to RPZ. But we thought, why don't we sell the four RPZ properties as well as the five YHAs," Doig said.
