An $8m vote of confidence in region's tourism prospects – Gisborne Herald

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The announcement by council-owned Gisborne Holdings Ltd that it will spend $8 million to redevelop the Waikanae Beach Top 10 Holiday Park, creating a five-star accommodation facility, is a major vote of confidence in the region’s tourism future.

It is GHL’s first big move since the council transferred its holiday park and vehicle testing station businesses to it last year, and is an obvious area for investment.

Development plans have been on the agenda for the park for some years, rejected under direct council ownership because of its competing priorities.

While there will be objections to a council-controlled organisation investing heavily in a competitive market, premium accommodation is in reasonably short supply and Gisborne’s motel sector seems to be shrinking as owners look to exit. The council itself is also investing in a major new drawcard for the city in the Navigations Project, and destination marketing is expected to grow under new tourism funding arrangements. If the tourism sector does see strong growth, Gisborne needs investment in more quality accommodation infrastructure.

This planned $8m spend over four years comes as GHL is in the middle of a $12.5m commitment to build the new council offices, ownership of which — along with some other council property — moved to GHL at the start of this transfer process in late 2015.

Further major investment options will likely now be limited for GHL as its statement of intent with the council limits how much debt it can take on relative to its equity, and also requires a $1.5m distribution each year.

More asset transfers from the council to GHL are proposed for next year, including the airport, community housing, forestry holdings and quarries. However, the council put a question mark over this final transfer phase in February when it announced reviews of its commercial assets and the final proposed transfers.

One issue might be plans to upgrade Gisborne Airport. Could GHL take on this third major project, or might the council be better to work with current operator Eastland Group on this?

The announcement by council-owned Gisborne Holdings Ltd that it will spend $8 million to redevelop the Waikanae Beach Top 10 Holiday Park, creating a five-star accommodation facility, is a major vote of confidence in the region’s tourism future.

It is GHL’s first big move since the council transferred its holiday park and vehicle testing station businesses to it last year, and is an obvious area for investment.

Development plans have been on the agenda for the park for some years, rejected under direct council ownership because of its competing priorities.

While there will be objections to a council-controlled organisation investing heavily in a competitive market, premium accommodation is in reasonably short supply and Gisborne’s motel sector seems to be shrinking as owners look to exit. The council itself is also investing in a major new drawcard for the city in the Navigations Project, and destination marketing is expected to grow under new tourism funding arrangements. If the tourism sector does see strong growth, Gisborne needs investment in more quality accommodation infrastructure.

This planned $8m spend over four years comes as GHL is in the middle of a $12.5m commitment to build the new council offices, ownership of which — along with some other council property — moved to GHL at the start of this transfer process in late 2015.

Further major investment options will likely now be limited for GHL as its statement of intent with the council limits how much debt it can take on relative to its equity, and also requires a $1.5m distribution each year.

More asset transfers from the council to GHL are proposed for next year, including the airport, community housing, forestry holdings and quarries. However, the council put a question mark over this final transfer phase in February when it announced reviews of its commercial assets and the final proposed transfers.

One issue might be plans to upgrade Gisborne Airport. Could GHL take on this third major project, or might the council be better to work with current operator Eastland Group on this?

This Article Was Originally From *This Site*