QUEENSTOWN LAKES DISTRICT COUNCIL 

Wanaka Camping Facilities Issues and Options 

Roger Taylor November 2008 ‐ Final  

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1 SUMMARY.

The purpose of this report is to identify and consider the options for future camping ground supply in the Wanaka area. This report provides a part of the information that the Wanaka community needs to consider in its evaluation of the competing uses for the land currently occupied by the Wanaka camping ground.

The 2005 Camping Ground Strategy adopted by Council in August 2005 provides as follows in regard to the Wanaka Camp:

The hearings committee recommends that a feasibility study for the development of the Wanaka camp as a holiday park be commissioned, and presented to the Council for consideration, by December 2006.

This report, albeit late, fulfils the requirement for a feasibility study as identified in the strategy.

The 2005 strategy identified two different market segments in the camping ground market that would be targeted – holiday parks and kiwi camps. Kiwi camps were defined as camps where traditional values of fun and outdoor life-style are fostered and encouraged. Facilities are provided to support a self-sufficient approach to camping holidays including showers, toilet, barbecue areas and shared kitchen facilities. The majority of the site would be undeveloped grass areas. Holiday parks were defined as a kiwi camp with more sophisticated accommodation including holiday flats with more extensive facilities, more extensive site development, and formal hard landscaped areas and controlled vehicle parking. Where the term “camping grounds” is used in this report it covers both holiday parks and kiwi camps.

This report has been prepared in the context of a number of other reports on somewhat related issues such as Wanaka sporting grounds and facilities and the Wanaka aquatic centre and possible competing uses for public land between those projects and the Wanaka Camping Ground. This report and its analysis is undertaken from the perspective of the camping ground decision – should the camping ground remain at the site or not (and what indicative facilities should be provided), rather than the sports fields decision – should the sports fields and facilities be based at the camping ground site. As identified above, that question is the subject of a separate report.

This report finds that there is no compelling case, either from a social or economic perspective, for the camping ground to be retained in its current location near the Wanaka town centre. Private providers of camping grounds in the area currently provide much of the built amenity that some users of camping grounds desire. Powered and non-powered sites for campervans and caravans, which is the predominant demand by users of these facilities, can be provided at alternative locations that provide a peri-rural rather than an urban experience. Council already has control of an alternative site at Albert Town that could be developed. The existing Glendhu Bay camp has capacity for further expansion of powered sites and planning for development at this camp has commenced. Council could partner with the owner of the Outlet camp to develop that facility, or, if necessary, it could investigate other green field sites in the Ballantyne Road, Riverbank Road area. If the community decides to develop a sports complex at the current Wanaka camping ground site provision could be made for overnight camping (predominantly for campervans and caravans) in some of the parking areas.

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Based on analysis undertaken before the onset of the current global economic “crisis”, the Wanaka visitor market was expected to increase by around 2.2% per annum from around 600,000 visitors per annum this year to around 700,000 in 2013. Over this period there is expected to be a significant switch in the mix of visitors from domestic to international visitors – domestic visitor numbers are forecast to remain relatively static. These expected visitor numbers, though, do not reach the 2002 peak where visitors numbers overall were around 900,000.

Visitors to the Wanaka area who stay in camping grounds spend around $5.5 million in the area per annum. By 2013, based on the expected increase in visitor numbers and the higher proportion of international visitors expected, this is estimated to increase to an annual expenditure of $7.5 million. This is still well below the 2003 peak expenditure estimate at just below $9 million.

From a purely commercial perspective, with competition for funding resources, it is difficult to argue that investment in visitor accommodation should be made into the Wanaka market. The potential return on investment would seem, on the basis of relative market size and growth, to be better and less risky in Queenstown if Council is going to invest in this market.

Faced, as it is, with the potential need to invest in facilities at both the Glendhu Bay and Wanaka camping ground sites within the short-term, this report recommends that further investment should be concentrated on the Glendhu Bay site. If the decision is made to retain the Wanaka site as a camping ground in the short term at least then this report recommends that facility development should be limited to that necessary to provide communal facilities that support campervan and caravan users at the camping ground. No redevelopment of the site to create a holiday park facility should be undertaken.

2 BACKGROUND

This section of the report “sets the scene” for the analysis of the options for camping ground investment in the Wanaka area that follows. This section analyses the available data on visitors, visitor accommodation (including camping grounds) and the gross expenditure of visitors.

The section is structured by starting with an analysis of the national level information that is available. This analysis provides an indication of the relative market share of camping grounds within the total commercial visitor accommodation market. It also provides information on the gross expenditure of camping ground users.

This is followed by a regional section that compares the past and forecast performance of the Wanaka visitor market with the other markets in the region; Queenstown and Central Otago. This section finds that there is no comparative growth expected in the Wanaka market, but some structural change in the mix of visitors with less domestic and more international visitors expected. Overall, the Wanaka and Central Otago markets combined are less than the Queenstown visitor market.

The third section focuses particularly on the Wanaka visitor market. It identifies that for both total visitors and visitor nights during the forecast period to 2013 the expected volumes do not reach the peak number of total visitors reached in 2002 or the total number of visitor nights reached in 2003. This indicates that there is

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sufficient capacity within the current market to meet expected demand in the medium term.

The final section assesses the current and short to medium term demand for camping ground facilities in the Wanaka area.

a) The National Visitor Market

i) Tourist accommodation

The total market for tourist accommodation primarily comprises two sectors – commercial accommodation and private accommodation.

The commercial accommodation sector represents around 33 million guest nights per annum and has grown at an annual rate of 3.1% per annum over recent years. Market shares for the primary suppliers of commercial accommodation are dominated by Hotels and Motels with a combined 65% share of the commercial market as shown in the following chart (Ministry of Tourism, 2008)1.

Camp grounds represent a static share of just under 20% of this market (6.6 million guest nights for the year to 30 June 2008 out of a total of 33.26 million guest nights).

1 This report uses data sets sourced from the Ministry of Tourism to provide consistency of data at national, regional and local Wanaka levels. The visitor number projections in these data may differ from the visitor data developed for QLDC internal modelling.

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5

10

15

20

25

30

35

2006 2007 2008

Million Gue

st Nights

Year ended June

Commercial Guest Nights

Hosted

Backpacker

Camping Ground

Hotel

Motel

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For the total market for visitor accommodation, camp grounds represent a small and declining proportion of the market. For international visitors, camping grounds represent 6% of the market. For domestic visitors they represent 3% of the market. (Angus & Associates, 2008).

ii) Gross expenditure by holiday park users

The average daily expenditure per person staying at a holiday park is $95.49 (domestic visitors $74.12 and international visitors $150.96). The following chart shows the make-up of this expenditure. (Angus & Associates, 2007).

Note that this is expenditure for peak season visitors (late December to mid January). It is reasonable to assume that shoulder and low season visitors would spend proportionately lower amounts. Furthermore, semi permanent residents are assumed to have expenditure levels approximating normal households – i.e. they would exclude “Admission/activity fees”, a proportion of “Other shopping” and a proportion of “Cafes / Restaurants”.

Users of holiday parks in the Queenstown - Cromwell area overall spent more per person per day than the national average ($117 per person). Of this, domestic visitors to the region spent slightly less than average ($70.67) and international visitors significantly more ($190.48).

The data reflected above was collected from people staying at holiday parks (n total = 522, n Queenstown/Cromwell region = 131). No comparable data could be located for visitors staying at kiwi camps.

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80

100

120

140

160

Domestic ($74)

International ($151)

Average ($95) Queenstown ($117)

$ pe

r day

Average expenditure per person

Other

Bars/nightclubs/alochol

Petrol/fuel

cafes/restaurants

Transport

Snacks/groceries

Other shopping

Accommodation

Admission/activity fees

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b) The Regional Tourism Market and Prospects

The Wanaka visitor market exists within a regional market that also comprises the Queenstown RTO and Central Otago RTO. Comparatively, the Queenstown market is expected to provide the greatest growth in total visits from 1.34m in 2006 to 1.63m in 2013 an increase of 21.3% or 2.8% per annum. Wanaka is expected to increase from 584.3k in 2006 to 679.5k in 2013, an overall increase of 16.3% or 2.2% pa and Central Otago is expected to increase from 629.4k in 2006 to 675.1k in 2013, an overall increase of 7.3% or 1% pa.

The following chart highlights the projected growth rates and differences in structure of the three destinations within the region. Queenstown’s visitor market is dominated by international visitors, Central Otago is dominated by domestic visitors and Wanaka, which has been roughly equally shared between domestic and international visitors, is expected to show growth predominantly in the international visitor segment.

The overall regional visitor market is predicted to increase from 2.55m in 2006 to 2.99m in 2013 an overall increase of 16.9% (Ministry of Tourism, 2007, Queenstown RTO, Lake Wanaka RTO and Central Otago RTO). Of this market, Queenstown is expected to lift its share from 52.5% to 54.6%, Wanaka is expected to retain is share at 22.9% and Central Otago is expected to lose share from 24.6% to 22.6% (Ministry of Tourism, 2007).

c) Wanaka Visitor Volumes

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200000

400000

600000

800000

1000000

1200000

1400000

1600000

1800000

2006 2013 2006 2013 2006 2013

Queenstown Lake Wanaka Central Otago

Total V

isits

Comparative Growth in RTO in the Region

Domestic

International

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Tourism forecasts for the Lake Wanaka RTO shows a projected overall increase of 2.2% per annum from 2006 to 2013. The majority of this growth is expected to be from international visitors rather than domestic visitors. Overall visitor nights are expected to be up by 2.1% per annum over this period, meaning a slightly faster rate of growth in day visitors compared to overnight visitors (Ministry of Toursim, 2007, Lake Wanaka RTO). These trends, particularly the growth in international versus domestic visitors, are highlighted in the following chart:

Based on this analysis, visitor numbers are not expected to reach the 2002 peak of 720k annual visitors again, during the period of these forecasts. The forecast number of visitors to Wanaka in 2013 is an annual total of 680k. As shown in the chart, the 2002 peak was caused by a high number of domestic day visitors in that year (Ministry of Tourism, 2007).

i) Wanaka Visitor Nights

An analysis of visitor nights shows a similar trend. Overall the expected growth from 2000 through to 2013 is an average annual growth rate of 0.5%. The segment of the market that is growing is international visitor nights at an average annual rate of 6.9%. Peak visitor nights occurred during 2003 with 1.634m visitor nights. This peak is not matched at any time during the forecast period. By 2013 it is estimated that visitor nights will have reached 1.533m. The significant change is in the relative mix of domestic and international visitor nights – reflecting the underlying change in visitor

0

100

200

300

400

500

600

700

800

Num

bers per ann

um '000

Years (f = forecast)

Lake Wanaka RTO ‐ Total Visitors

Intnl day

Intnl o/nite

Domestic day

Domestic o/night

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mix. Domestic visitor nights have dropped from peak levels in 2000 and 2003 of around 1.0m per annum to an average forecast rate from 2007 to 2013 of 788k, a loss of around 218k visitor nights per annum. International visitor nights peaked at 825k nights in 2005. For the forecast period of 2007 to 2013 the average number of international visitor nights is 654k (Ministry of Tourism, 2007). This analysis is shown in the following chart:

A conclusion that might be drawn from the foregoing analysis is that there is sufficient capacity in the Wanaka market to meet the expected volume of demand through to the end of the Ministry of Tourism forecast period, and probably some way beyond.

ii) Wanaka Visitor Spend

Aggregate visitor spending is currently around $150m per annum and is expected to increase to around $200m by 2013. This increase reflects the change in mix of visitors as international visitors tend to spend more than twice the amount of domestic visitors.

To estimate the gross expenditure of the camping ground sector to the Wanaka economy, aggregate overnight expenditure (Ministry of Tourism, 2007) was multiplied by the share of market that camping grounds represent of the total overnight visitor market (Angus & Associates, 2008). The National Benchmark Report does not provide forecast data, so to approximate the gross expenditure of the camping ground market, camping ground share of market was held constant at 2008 values, despite there being a downward trend in the data.

0

200

400

600

800

1000

1200

1400

1600

1800

Nights (000

)

Lake Wanaka Visitor Nights

International

Domestic

9

The information in the following table over-estimates the gross expenditure in the local economy by camping ground users because it includes expenditure on transport (airfares, rental cars, campervans etc) where that expenditure is not necessarily (is most unlikely) to be made in Wanaka. An adjustment is made to the data based on the national share that transport represents of total expenditure – 2% for domestic visitors and 26% for international visitors (Angus & Associates, 2007). This data is single point sourced from a survey conducted during peak season 2006/07 from holiday park occupiers. It is assumed that it can be applied forward and backwards in time to provide an estimate of gross expenditure over time. The other assumption is that the proportionate spend that transport represents of the total spend of holiday park users applies equally to kiwi camp users.

Based on this methodology, in 2008 the annual expenditure by camping ground visitors in the Wanaka economy was approximately $5.5m. Based on underlying forecasts of visitor growth in the market, and particularly growth in international visitors, this is expected to grow to around $7.5m by 2013.

The estimated nightly spend by visitors to the Wanaka area is shown in the following chart. The data in this chart (Ministry of Tourism, 2007) is consistent with the survey data obtained from Holiday park users in peak 2006/07 and shown in Chart 2 above. Domestic visitors spend around $75 per night. International visitors spend around $150 per night, although when adjusted for the transport component which is usually spent out of Wanaka the nightly values for international visitors reduce to around $111 per night.

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1

2

3

4

5

6

7

8

9

10

$ million

Estimated Annual Expenditure in Wanaka by Camping Ground Visitors

International

Domestic

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3 WANAKA CAMPING GROUND DEMAND

This section of the report attempts to quantify the demand for camping ground space in Wanaka.

By applying the national market share that camping grounds represent of the total visitor market (Section 2.a.i) to both international and domestic visitor nights (Section 2.c.i) the aggregate demand for camping ground accommodation in Wanaka can be approximated.

Previous and forecast demand is shown in the following chart. This shows that overall demand peaked in the 2003 and 2005 years at approximately 88,000 visitor nights and is forecast to have declined to around 60,000 visitor nights in the current year. Through the forecast period to 2013, demand is expected to recover to around 68,000 visitor nights.

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20

40

60

80

100

120

140

160

180

$

Wanaka ‐ Average Spend per Night

Domestic

International

Overall

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a) Peak Demand versus Average Demand

The foregoing analysis has been undertaken on the basis of aggregate demand. This analysis excludes seasonal factors that might see demand exceed available supply at certain times of the year. Anecdotally, Wanaka camping grounds operate at capacity for a three week period at the end of December and beginning of January each year.

Analysis from the Commercial Accommodation Monitor (Statistics New Zealand, 2008) shows that peak camping ground occupancy within the Queenstown Lakes / Central Otago region (the smallest level of detail available) in the high season is a maximum of between 45% and 50%. On a rolling twelve month basis, occupancy is around 15%. As shown in the following chart, there has been little change in the rolling 12 month average or peak occupancy rates in camping grounds in the region over the last five years.

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10

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30

40

50

60

70

80

90

100

Visitor Nights (000

)

Estimated Aggregate Demand  ‐Wanaka Camping Grounds

International

Domestic

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The seasonal pattern of demand is best demonstrated in the following chart and supporting table. On a long term average basis, occupancy is below 15% for the months of May through to November. The summer months show a January peak at around 40% - 45% occupancy with 20% - 25% occupancy in December and February. March and April show a decline leading into winter of 15% - 20%.

Table 1 - Monthly Occupancy % - Queenstown Lakes / Central Otago.

Month Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Average 8.4 9.5 10.7 9.1 9.9 19.9 40.0 18.8 15.3 13.5 5.8 5.1 Maximum 10.8 12.3 13.2 11.4 13.4 25.1 46.5 27.5 21.6 17.7 9.8 7.2 Minimum 4.8 6.7 6.8 6.3 6.1 13.5 27.4 12.5 9.0 9.4 3.0 2.9

These monthly data are likely to contain a short-term peak occupancy around the New Year period, where capacity is reached and operators employ demand management techniques – such as minimum length of stay – over this short period.

There is no trend of shifting seasonality apparent from a review of this data.

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5

10

15

20

25

30

35

40

45

50

Oct‐96

Mar‐97

Aug

‐97

Jan‐98

Jun‐98

Nov

‐98

Apr‐99

Sep‐99

Feb‐00

Jul‐0

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May‐01

Oct‐01

Mar‐02

Aug

‐02

Jan‐03

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‐03

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Sep‐04

Feb‐05

Jul‐0

5Dec‐05

May‐06

Oct‐06

Mar‐07

Aug

‐07

Jan‐08

Jun‐08

Queenstown‐Lakes/Central Otago ‐ Caravan Parks Occupancy Rate (%)

Average monthly occupancy

Rolling 12 month average occupancy

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Applying the average monthly occupancy rate to the aggregate demand for visitor accommodation provides a breakdown of aggregate demand for visitor nights by month now and into the medium term future as follows:

Table 2 – Expected monthly demand for visitor nights for Wanaka camping ground.

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

2008f 5,017

5,687

6,390

5,441

5,921

11,884

23,831

11,227

9,135

8,067

3,467

3,020

2009f 5,133

5,819

6,538

5,567

6,058

12,160

24,383

11,487

9,347

8,254

3,548

3,090

2010f 5,259

5,962

6,699

5,704

6,207

12,459

24,982

11,770

9,577

8,457

3,635

3,166

2011f 5,481

6,214

6,982

5,945

6,470

12,985

26,038

12,267

9,981

8,814

3,789

3,299

2012f 5,567

6,311

7,091

6,038

6,571

13,188

26,446

12,459

10,138

8,952

3,848

3,351

2013f 5,716

6,480

7,281

6,199

6,747

13,541

27,153

12,793

10,409

9,192

3,951

3,441

The following chart shows the expected monthly demand for 2008/09.

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

% Occup

ancy

Average Monthly Occupancy ‐ Seasons

1996/97

1997/98

1998/99

1999/00

2000/01

2001/02

2002/03

2003/04

2004/05

2005/06

2006/07

2007/08

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3 WANAKA CAMPING GROUNDS

This section of the report identifies the existing camping grounds in the Wanaka market and attempts to determine aggregate available supply – the number of sites available and consequently the potential supply of visitor nights available in the market.

a) Summary of Wanaka area camping grounds

The following table provides an estimate of the current camping facilities available in the greater Wanaka market. The first five camps operate from land that Council controls and in the case of the Glendhu Bay, Wanaka and Hawea sites are operated by lessees. The remaining three camps are privately owned and operated.

Council adopted a strategy for the future development and operation of each of the Council owned sites in 2005. The strategy provides that Council will take direct control of these camps as each of the leases come up for review. In the case of the Glendhu Bay and Wanaka camps this occurs in 2010. The Lake Hawea camp lease expires in 2037.

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5,000 

10,000 

15,000 

20,000 

25,000 

30,000 

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Visitor Nights

Estimated Monthly Camping Ground Demand ‐ 2008/09

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Table 3 – Camping ground facilities in the Wanaka area

Powered sites

Non-powered sites

Tourist Flats

Cabins Other

Wanaka 200 45 5 21 Lodge and Backpackers

Glendhu Bay2 150

300 10 14 bed unit

Albert Town 1003

Lake Hawea 82

240 4 10 2 caravans

Luggate 20

Top 10 Pleasant Lodge

70

45 10 7 x Motels

Aspiring Campervan Park

34 Lodge

Lake Outlet Holiday Park

60

140 6 1 x Cottage

Aggregate Site Supply

596 890 19 47

Further analysis of the first three camping grounds is presented below. The Lake Hawea camp is excluded from further analysis because it is leased to a commercial operator for the next 29 years. The Luggate camping area is very small and provides no real development opportunity.

b) Wanaka Lakeview Holiday Park

The Wanaka Lakeview Holiday Park is owned by the Queenstown Lakes District Council and currently leased to the Hensman Family Trust until August 2010; however the Lessee has expressed a willingness to surrender the lease at the end of January 2010.

2 This information differs from that contained in the Council Camping ground Strategy. This facility mix is set out on the camp’s web site www.glendhubaymotorcamp.co.nz/accom.cfm. 3 Currently constrained to a maximum of 350 pax because of limited facilities.

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All improvements belong to the Council, but are reaching the end of their economic life.

Council currently receives ground rental income for the camp of $165,000 per annum, and the rates are paid by the lessee. Under the Council operated option proposed by the Camping Ground Strategy this revenue and cost net to zero so are excluded. Maintenance costs are the responsibility of the lessee, excluding replacement of any improvement that is no longer functional due to reasonable wear and tear. The cost of any capital improvements must be met by the lessor.

The current camp includes a lodge, 24 cabins, 4 tourist flats and 245 sites (200 powered).

The land on which the Wanaka camping ground is located is Section 10 Block XV and Part Section 12, Block XV, Wanaka Town, comprising 11.47 hectares in total. The camp currently occupies 4.88 hectares with the balance occupied by the Wanaka Showgrounds and Upper Clutha Rugby Club’s fields and rooms. There is a registered lease to the Upper Clutha Rugby Football Club Inc for 33 years from 1979 (expires 2012) with no right of renewal. There is also a lease over a part of this land to the Wanaka A&P Society. The land is owned by the Council in fee simple and held as recreation reserve.

In the Queenstown Lakes District Partially Operative District Plan (PODP), the land is zoned rural general. There is a designation (Number 101) on the land as a camp ground. The rules of the designation are set out in the PODP, and are mainly site rules. Provided that the new development meets these rules, an outline plan approval may be sought pursuant to the Resource Management Act 1991 rather than resource consent. The site rules are as follows:

Buildings and structures set back from road boundary 20 metres

Buildings and structures set back from internal boundaries 10 metres

Height limit for buildings and structures 8 metres

Recession line 25º from 2.5 metres above the ground on the boundary

Coverage no more than 40%, with any single building no larger than 600m2

No more than 25% of the site covered by impervious surfaces.

The land is classified under the Reserves Act 1977 as recreation reserve. No consents are required under the Reserves Act to use the land as a motor park (so long as it is not leased) or for recreation purposes. A management plan for the reserve has to be prepared.

An aerial photograph of the camping ground is shown below.

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b) Glendhu Bay

This camp is located on the lake edge at Glendhu Bay approximately 11km from Wanaka along the Wanaka - Mt Aspiring Road. The camping ground occupies approximately 12.5 hectares of land.

As set out in the 2005 strategy, the camp ground has a slightly run down feel to it and the buildings are old and in a deteriorating condition overall. The camp requires major asset renewal. Some of the existing buildings are Council owned. The boat ramp is used by both camp users and the wider community. The camp has a lodge used by community groups, 10 old cabins, a manager’s house and a lessee’s house.

There are 150 powered sites formally identified with significant scope for further development of additional powered sites should the need arise4. The occupancy of the camp peaks at Christmas/New Year with all cabins, and powered sites in use. In addition there is significant scope for non-powered camping and caravans and the lessee estimates that up to 1,500 people may be at the camp over the busiest period. During the winter months the camp is quiet with mainly cabins and a few caravans in use. The camping ground was completely closed for winter 2008.

4 This facilities mix is as reported in the 2005 Strategy and as noted above differs from the information contained on the web site for the camping ground.

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The lease term of 10 years was commenced on 15 August 2000 and is due to expire on 13 August 2010. Rental is $67,000 per annum. Rates of $5,992.80 per annum are currently paid to the council.

A new design layout for the camp was due to be prepared, costed and presented to Council by the end of 2007. Work has commenced on this.

c) Albert Town

The Albert Town camp land was vested in Council from the Department Of Conservation in 2006 and is approximately six kilometres from the town centre. It comprises 49 hectares of land classified and designated as recreation reserve, with the underlying zoning being rural general. There is currently no Reserve Management Plan for this reserve and if development as a “built” camp was to proceed, undertaking a management plan would be the best way to deal with the use under the Reserves Act.

The site comprises of two lots, the first (Lot 1 DP 375247) comprises approximately 8 hectares and is to the west of the State Highway is used as a year round self-registration campground. This site surrounds the Cemetery Reserve which contains graves and a memorial that are protected features. The second area (Lot 2 DP 375247) which comprises the balance of approximately 41 hectares is a largely undeveloped area providing overflow self registration camping between Christmas and Easter and contains the main boat ramp giving access to the Clutha River.

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An on-site caretaker ensures efficient operation of the camp during the summer.

From a planning perspective, before further development could be undertaken at this location a designation for camping ground purposes is required and a reserve management plan will need to be developed.

d) Built accommodation facilities

As shown in Table 3 there is a variety of built facilities, cabins, tourist flats and other structures that are available for hire at the Council and private camping grounds.

These facilities compete with the (lower end of) the motel market and the backpacker market. There are approximately 25 motels in Wanaka. The average monthly occupancy over the last two years to August 2008 is 55% (Statistics New Zealand, 2008). The seasonal motel peak is later than camping grounds over the January to March period. Peak occupancy during this period over the last five years has been 85% in February 2005. The equivalent occupancy rates for backpackers are average occupancy of 56% and a seasonal peak of 74% in July 2007. Occupancy at backpackers has a much lower seasonal variation compared to motels and particularly camping grounds (Statistics New Zealand, 2008).

4 NET DEMAND AND SUPPLY IN THE WANAKA CAMPING GROUND MARKET

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The core analysis that needs to be undertaken is the balance of demand and supply in the market. Each of these variables has been identified in the preceding discussion. To undertake this analysis the built accommodation available at the various camping grounds has been ignored as the predominant demand is for powered and non-powered sites for campervans, caravans and (seasonally) tents. A key assumption in this analysis is that the Wanaka camping ground market is homogenous. Whilst there is no data available to develop a more segmented analysis, discussions with the current operators of the Wanaka and Glendhu Bay camping grounds indicates that there are different market segments that have different market demands (that have been met by the different supply options available) and that assumption of homogeneity may not be valid.

Table 3 shows that there are 596 powered sites and 890 non-powered sites available in the market. Based on a 30 day month, these convert to 17,880 powered site nights available per month and 26,700 non-powered sites available per month – a total capacity of 44,580 site nights per month.

The average group size of camping ground users is 3.9, split between average domestic groups of 4.3 people and average international groups of 3.2 people (Angus & Associates, 2007). Multiplying site nights per month by average group size provides an estimate for the available supply of visitor nights of 69,732 visitor nights for powered sites and 104,130 visitor nights per non-powered site per month. The National Benchmark Report suggests that the number of visitors travelling together is significantly lower at 2.12 International and 2.46 domestic a simple average of 2.32 (Angus & Associates, 2008). Using this multiplier, available visitor nights at Wanaka camping grounds per month are a total of 103,425.

The following chart shows the balance between currently available supply (using the

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20,000 

30,000 

40,000 

50,000 

60,000 

70,000 

80,000 

90,000 

100,000 

110,000 

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Visitor nights pe

r mon

th

Wanaka Camping Grounds ‐ Supply v Maximum Expected Demand

Non‐powered sites

Powered Sites

Max Demand

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more conservative National Benchmark Report multiplier) and the maximum expected demand per month in the Wanaka camping ground market out to 2013:

If the Wanaka camping ground is removed from available supply, the total supply in the market (using the National Benchmark Report multiplies) reduces from 103,425 visitor nights capacity per month to 86,374 nights per month. The majority of this change occurs in the supply of powered sites. This reduces from 17,880 site nights per month to 11,880 site nights per month.

As shown in the following chart, the effect of this is minimal. There remains a considerable over-capacity in the market – albeit that for a few days over the peak summer period there will be an excess of demand over supply. What the chart shows is that there is a potential need to develop additional powered sites at other camps that Council runs – the demand mix between powered and non-powered sites is not known. As the 2005 strategy identified there is capacity at the Glendhu Bay camp for further powered sites to be developed if necessary.

5 OPTIONS

The objective of this report is consider whether the 4.88 ha of land (or the majority of it) currently occupied by the motor camp should continue to be used as a motor camp or not. This report does not consider what alternative uses the land could be put to - other reports will deal with those matters. The preceding sections of the report have identified that the continuation of the Wanaka camp is not necessary to ensure the

‐

10,000 

20,000 

30,000 

40,000 

50,000 

60,000 

70,000 

80,000 

90,000 

100,000 

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Visitor Nights pe

r Mon

th

Wanaka Camping Grounds  ‐ Supply (Excluding Wanaka Camping Ground) v 

Maximum Expected Demand 

Non‐powered sites

Powered Sites

Max Demand

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ongoing supply of camping ground facilities meets the expected demand for sites – other than for a short period in the peak summer season.

Subsequent issues are either the redevelopment of the motor camp or not, or, alternatively, the relocation or closure of the motor camp. Under either scenario there are further sets of issues around facility mix, funding and timing.

The community needs to understand the options available to it and have some idea of how they can differentiate between the options to make an informed choice between them. The options considered below do not include options around development of the Glendhu Bay camp – although this is a real prospect. That consideration should be the subject of a separate analysis that is required under the 2005 Camping Ground Strategy for the development of that camp.

a) Options

i) Retain the motor camp in (generally) its current condition and location. Within this option provision is made for upgrades to the common facilities blocks;

ii) Redevelop the motor camp on the current location, but with a reduced footprint, meaning a reduction in the number of camping sites available from 245 to 160;

iii) Relocate the motor camp to a different location and develop a camp with comparable facilities to a redeveloped camp in Wanaka. For the purpose of this analysis only one possibility is considered under this option – redevelopment at the current Albert Town camp site. This is because this land is currently QLDC controlled reserve land and is used for camping purposes. Other “greenfields” sites are possible. The evaluation of these alternative sites is subsidiary to the principle option of developing a full facility camp (including cabins and tourist flats) on a different site;

iv) Relocate the motor camp to a different location (the Albert Town site for the purposes of this paper as discussed above) and develop a camp with facilities suitable for a kiwi camp only (powered and non-powered sites). This means the establishment of sufficient toilet/shower and kitchen blocks to cater for 240 sites – about 140 non-powered and 100 powered – but not the construction of tourist flats or cabins;

v) Close the current motor camp and do not replace it.

The following schema shows a simplistic representation of the decision to be made.

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Future use of Wanaka motor

camp land?

Facilities Mix Funding Timing

Alternate uses for land

Continue as motor camp

Redevelop camp facilities

Retain existing facilities

Close motor camp

Relocate motor camp

Amend QLDC camping ground

strategy

6 EVALUATION

a) Evaluation criteria

Evaluation of this decision requires analysis at both an economic and social level.

A social assessment needs to consider the relative social benefits and detriments to the community from having a camping ground located close to the centre of town where users have easy pedestrian access to the town centre compared with alternative options.

This assessment will need to include issues such as:

i) Integration of visitors into the central business area or “isolation” of them into separate visitor communities out of the central business area;

ii) Traffic impacts of campers commuting into town;

iii) Alternative community uses for the land.

The economic assessment will be of the economic benefits and costs of the same general comparison but at a greater level of detail – having the camp in its current location and within that, leaving it as it is or redeveloping it, having the camp out of town or not having this particular camp at all.

This economic analysis will need to include issues such as:

iv) Camp development costs;

v) Projected net operating position;

vi) Economic impacts on the wider Wanaka community.

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b) Social Analysis

The section of the analysis attempts to provide a qualitative assessment of the social (people based) issues surrounding the options.

i) Integration or isolation?

Other than the Wanaka motor camp, the other camps are located outside of the immediate Wanaka town centre, with the Glendhu Bay, Outlet, Albert Town and Luggate camps requiring a vehicle to travel to Wanaka. Whilst that is the case, the camps are “motor” camps, so it is not unreasonable that users should expect to use vehicles to travel to town facilities.

The current location of the Wanaka camp is very close to town. Whilst there is no evidence, it is reasonable to conclude that users of that camp will leave their vehicle in the camp and walk to town. This will help reduce congestion in Wanaka streets and car parks. This advantage could be replicated to some extent by camps at more remote locations by the provision of a shuttle service that could bring patrons to and from the town centre.

Furthermore, it is possible that with a town centre location, campers will spend more in town, opting to participate in activities and dining in town rather than at the camp (e.g. cooking for themselves). Campers may stay longer when they are in town centre camps than in more remote areas.

However, the notion of a camp ground is that it is a more remote and rural experience than an urban experience and there may be an expectation that a camp will convey that rural amenity of trees, paddocks, perhaps water and wider open spaces. An urban experience and the amenity of close proximity to town centres is more associated with built accommodation such as motels and hotels.

It is likely that the cost of fuel will change holiday trends. Consequences of a new fuel price environment might be:

Reduction in the overall number of visitors holidaying in the area – particularly over the short to medium term as behaviours adjust to the new environment;

Reduction in the number of “driving” holidays in campervans;

An increase in the number of visitors who elect to “stay put” in one location rather than travelling too much, to make holidays being cheaper and simpler.

ii) Locals or visitors?

This report is about the camping ground decision. However that decision has to be considered within the context of the other potential uses for the site, such as a sports field and sporting facility hub. At that level, there is some consideration that needs to be given to whether the current camping ground location is more valuable to the community for recreational use by members of that community than for use by visitors to the community.

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The advantages, for example, of proximity of the camping ground to the town are equally valid advantages for a sports venue where supporters and participants have direct access to the amenity of the town centre. Similarly the advantages of reduction in transportation effects on the town apply equally to an alternative use for the site as they do to visitor use.

iii) Should Council compete with private camp grounds?

As shown in the situation analysis, there are two alternative providers of “built” camping facilities in the vicinity of the current Wanaka camp, but further to the west along the Mt Aspiring Road. Any redevelopment of the Wanaka camp to a Holiday Park is likely to have an adverse effect on these businesses. However, there is evidence from other parts of New Zealand where private camps have closed as the financial returns for redevelopment of the land for other purposes have exceeded the returns from operating a camping ground.

The questions that the community needs to consider are whether:

Council should be competing with private businesses in the provision of holiday park services in the community;

Is it likely that the existing private camping grounds will continue to provide their services into the reasonably foreseeable future?

c) Economic Analysis

The following table sets out a high level comparison of the economics of operating a camp ground under each of the options using a common set of assumptions. The value in the analysis is the comparison that can be made between the various options based on consistent assumptions rather than the absolute values shown as “net income” or “capital costs”. Notwithstanding that, the capital and operating costs and revenue have been modelled based on reasonable estimates of expected outcomes.

No discounted cash flow analysis has been undertaken because the options other than the status quo all produce a net operating loss, meaning that they cannot produce a positive net cash flow.

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Table 4 – Comparison of funding and operating position

Options

As is on Showgrounds

site

Redevelop on showgrounds

site

Develop on new site

Common facility

development new site

No camp

Development costs 500,000

4,000,000

5,000,000

1,500,000

Clearance costs 100,000 150,000

250,000

250,000

250,000

Capital costs 600,000 4,150,000

5,250,000

1,750,000

250,000

Income 674,630 721,058

681,966

328,500 -

Ground rent Interest 10% 60,000 415,000 525,000 175,000 25,000 Depreciation 2% 10,000 80,000 100,000 30,000 -

Operating costs 200,000 240,000

240,000

180,000 0

Total Costs 270,000 735,000 865,000 385,000 25,000 Net Income 404,630 -13,943 -183,034 -56,500 -25,000

i) Assumptions

Capital costs are estimated based on information provided;

No cost for land is factored in. The assumption is that land will be available and carries no opportunity cost;

Development costs for the current site and a greenfields site (assumed to be Albert Town) are assumed to be the same other than a $1,000,000 allowance for infrastructure development (power, water and sewage at a new site);

Site clearance costs are estimated based on the relative amounts of work required. Costs to clear the current site are included in the assessment of options to develop other sites or not develop;

Redevelopment of the common facilities (toilet and kitchen blocks) is assumed under the status quo option for the current site;

Occupancy rates used are the weighted average rates for each facility type as identified above in the analysis (Table 1 and section 3.d). No change to occupancy rates is made following redevelopment;

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Occupancy at a fully developed facility at a new site is estimated at 80% of occupancy at a redeveloped facility at the current site;

The status quo option for the current site retains the full 245 sites; the redevelop option for this site is based on 160 sites;

The new site is estimated to have the capacity for 240 sites (and assumed to have a 60% un-powered, 40% powered ratio);

Facility prices used are set out in the following table:

Table 5 - Facility Prices

As is on current

site

Redeveloped

facility either

site

Common facility

development

new site

Studio $75 $110 N/A

Tourist Flats $44 $70 N/A

Sites5 $30 $30 $25

Ground rent for the current site is currently charged at $140,000 per annum. Under the Camping Ground Strategy, the current camp will be operated by Council and the $165,000 rental revenue will be lost because of that decision. Consequently, no ground rental is factored into this evaluation;

Depreciation is calculated on new development costs at 2%;

Interest cost is calculated on total capital costs. This reflects the cost of capital in developing new facilities.

Operating costs are estimated and reflect age and mix of facilities as key variables for staff and maintenance costs.

ii) Analysis

There is a significantly lower net income generated from redeveloping the current site compared to leaving the current site generally as it is and undertaking common facility upgrades – kitchen and toilet blocks. This is because there is a loss of camping sites in the redevelopment (245 down to 160) and this loss does not compensate for the marginal increase in yield from the redeveloped permanent facilities;

5 Assumes 2 adults, based on average number per party.

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Based on the assumptions set out above, a redeveloped facility on the current site will breakeven before Council overheads of $50,000 per annum;

Developing a full service camping facility at another location will lose about three times as much as redeveloping on the Wanaka site. The capital cost is higher because there is no infrastructure at the Albert Town site and costs of clearing the Wanaka site add in aggregate an estimated $750,000 to the capital cost of this option.

A new location (assumed to be Albert Town) has a greater capacity for camping sites (assumed at 240 against the 160 in a redeveloped camp on the current site) but, for the purposes of analysis, is assumed to have a 20% lower occupancy than the Wanaka site.

Developing a new site with good common facilities (toilets and kitchens) but not developing cabins and tourist flats generates a loss of around $55,000 per annum based on the assumptions.

The option to continue the current operation in the current condition assumes that the camp can continue to operate the full 245 camp sites currently available rather than reduce to the 160 sites proposed within the redevelopment on this site option. This redevelopment option reduces the footprint of the camp to the area east of Brownston Street. If this change is necessary for the “retain current facilities on current site” option, the annual net income reduces from $345,609 to $226,473.

The analysis has not considered the ability of Council to fund the redevelopment that is proposed in the Camping Ground Strategy. Under that strategy, in 2010 it is scheduled to “take-over” and “redevelop” both the Glendhu Bay and Wanaka camps. Council has limited funding capacity for projects such as these, so it is reasonable to conclude that it could not fund these projects concurrently.

7 CONCLUSIONS AND RECOMMENDATIONS

Based on this analysis there is no compelling case for the retention of the current Wanaka camping ground on its current location and for its redevelopment as a Holiday Park as envisioned by the 2005 Camping Ground strategy.

Based on the Tourism New Zealand data sets, the Queenstown visitor market is expected to grow at a faster rate than the Wanaka market and by 2013 is expected to be 2½ times the size of the Wanaka market. If Council is making a commercial investment in the visitor accommodation market, it is likely to obtain a better return from the Queenstown market through extending its existing Queenstown or Arrowtown facilities or developing the Frankton facility.

The expected growth in the market through to 2013 is unlikely to provide demand for camping ground accommodation that approaches the peak or aggregate capacity of the current supply of camping grounds in the Wanaka area.

There is no case for the development of a “holiday park” facility in Wanaka. There is a reasonably strong private market for built camping facilities in the vicinity of the current Wanaka camp – albeit that both alternatives are located further to the west and further out of town. Notwithstanding that, the town centre is accessible by

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pedestrians to and from those camps. The community will need to consider whether Council should be competing with those private camp operators.

Powered and non-powered sites for campervans and caravans, which is the predominant demand by users of these facilities, can be provided at alternative locations. Council already has control of the Glendhu Bay camping ground where additional powered sites can be added.

The alternative “kiwi camp” at Albert Town could be further developed by providing basic shared amenities; however it is unlikely to provide a positive return. Alternative sites, where the cost of providing the necessary infrastructure is lower, could be considered, however it is not necessary to meet demand.

It is recommended that:

a) A report on options for the development of facilities for the Glendhu Bay camping ground is completed as a matter of urgency and that development of this camping ground, consistent with the seasonal demands for camp usage, is undertaken as the first priority for development of camping grounds in the Wanaka area;

b) No redevelopment of the Wanaka camping ground is undertaken. If alternative uses are identified for this area then the camping ground can be closed, albeit at the cost of an estimated $400,000 per annum in net income to Council. If no alternative uses are identified, redevelopment should be limited to renovation of communal kitchen and toilet facilities and the focus of the camping ground is on the campervan (particularly for international visitors) and caravan markets; and

c) Limited development is undertaken at the Albert Town camping ground site. The cost of developing infrastructure at that site makes it un-economic.

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Bibliography Angus & Associates. (2007). Expenditure by Holiday Park Visitors Peak Season 06/07.

Wellington: Holiday Accommodation Parks Association New Zealand. Angus & Associates. (2007). New Zealand Holiday Parks: Some Quick Facts. Wellington:

Holiday Accommodation Parks Association New Zealand. Angus & Associates. (2008). National Benchmark Report. Wellington: Ministry of

Tourism. Angus & Associates. (2008). Regional Visitor Monitor (Results to 31 March 2008).

Wellington: Ministry of Tourism. Glendhu Bay Motor Camp. http://www.glendhubaymotorcamp.co.nz/ Ministry of Tourism. (2008, June). Commercial Accommodation Monitor. Retrieved

August 2008, from Ministry of Tourism: www.tourismresearch.govt.nz/Data--Analysis/Accommodation/Commercial-Acco

Ministry of Tourism. (2007). NZ Regional Tourism Forecasts 2007-2013: Lake Wanaka RTO. Wellington: Ministry of Tourism.

Ministry of Tourism. (2007). NZ Regional Tourism Forecasts 2007-2013: Queenstown RTO. Wellington: Ministry of Tourism.

Queenstown Lakes District Council. (2005). Camping Ground Strategy. Queenstown: Queenstown Lakes District Council.

Statistics New Zealand. (2008). Commercial Accommodation Monitor. Wellington: Statistics New Zealand.

Wanaka Lakeview Holiday Park. http://www.jasons.com/New-Zealand/Wanaka/Wanaka-Lakeview-Holiday-Park