Investing in cheap accommodation

[donnie]

Does anyone here know of anyone that would be interested in putting money into investing in cheap cheap accommodation for tourist and workers in the Blenheim area.

I was thinking around 200-400 single rooms and some double rooms as well. Blenheim needs around 1000+ beds for tourist and workers during summer and winter period so there is alot of money to be had for anyone interested.

If there is interest here, then i could go to the council, Government and vineyards to see if i can raise the money needed to get things started.

It will probably take 3 or 4 years to finish a project like this, so time is needed

Somebody has to start somewhere, i could put photos of the progress on this chat site if things develop well and there is interest.

I dont want to scam people, like some lowlifes in this country do, I just want to get a good business together and run it well, and hopefully put the business onto the sharemarket to get funding to grow the company.

As i said before somebody has to start somewhere. What do you guys think, am i wasting my time.

Id like some feed back from anyone.

[David Renwick]

Donnie

Just last week my partner & I were discussing investing in low-cost, hostel-type accom for itinerants and short-term employees such as seasonal workers.
Unusual social problems associated with this type of guest and they can be high mtce but worth investigating further. Mary is Stateside for a month and I'll bend her ear then.

[trendy]

If you want to set up low cost accomodation for workers why not set up a trailer park....they are the norm in the US. In fact over the years I have noticed in NZ that a lot of people now live full time in camping grounds in many towns. Time for someone to take the plunge and set up a trailer park.

[xx(]

[Capitalist]

David said: Unusual social problems associated with this type of guest and they can be high mtce but worth investigating further.

I think it's definitely worth investigating further too-- there is a lot of money to be made at the lower end of the market.

Good 4 u Donnie for being so ambitious! Relatives in Marlborough Sounds have just bought 40 acres in Blenheim quite cheaply. Whether they would be interested in your investment or not I don't know, but let us know if I can be of any help.

[donnie]

thanks for your comments so far.

Trendy,

If there are people around with money, and there were builders around to build the buildings, I would do that to, I was hoping to get a site that was fairly big to cater for people in campervans and tents as well as single, double and bunk rooms, also i would build a small pub to cater for the guest, a few years later when the investors where paid off and there was no debts over the business.

I'll leave an email address for anyone who wishes to contact me.

Sauvignonvalleysbackpackers@hotmail.com

If you know of anyone, or any company that is interested in investing in a backpacker type investment, also get them to email me.

If there is interest. i will keep everyone informed as well.

[MPC]

Good idea and I also have looked into something similar. I used to work in the mines in Oz and lived in little "dongers". This is another option, they are basically a room with a bed and attached tiny bathroom which services 2 rooms. You could also provide room cleaning and linen changing and maybe even a cooked breakfast.

I have looked at this for Wanaka and/or Queenstown but land prices and permission are the main obstacles.

Hope to hear how your plans go.

Cheers,
MPC

[David Renwick]

MPC - we looked at those areas too but ran out of credible
spondulucks and lost patience with the T.A. process at an early stage.

[donnie]

Hi Long Strangle

i was looking at giving people their money back first, so people know that this isn't a scam, then if the business goes well and theres alot of tourist around that like the accommodation i offer, then i could look at raising money to buy other businesses through a share float.

To me its all about getting the business going well, before i get shareholders in.

[blockhead]

There is an accommodation business here in Queenstown (Reavers Lodge) which offers bedroom with ensuite and shared cooking/lounge facilites.
It has been built in the last year or two and is full with a waiting list, the concept works well, the accommodation is mainly used by seasonal workers and is not permitted to operate as travellers accommodation, the important considerations are closeness to town/work/transport/supermarket. I know the cost pw for a room but it would obviously be different in other areas of NZ.
Queenstown could do with another lodge like this tomorrow, the catch is land is so expensive but I feel any person wanting to have a go would get help from the local Council.

Blockhead

[Harrys]

If the shortage is as serious as they say, what are the vinyards themselves doing about it? Surely they are the ones with the most to gain. Does Montana provide any accommodation for its seasonal workers?

[donnie]

This was in the Malborough express, and maybe the press.

This is a very serious concern, [}:)]montana[xx(] does craaap all for their workers in the way of accommodation.:(:(

Most of the vineyard growers dont give a stuff about where their workers stay, their just worried about getting the work done.

One day the workers wont come to Blenheim, then where will the growers and Montana be then, NOWHERE.

THATS A FACT

Vineyard workers facing housing shortage in Marlborough[xx(]
20 May 2004
By SOPHIE WILSON

Marlborough is facing an accommodation shortage, with around 1500 workers required for this year's pruning season.


With a 20 per cent increase in labour requirement and some holiday parks turning down vineyard workers, Marlborough's annual winter accommodation problems are likely to be worse than ever.

But solutions to the problem seem harder to find than a Blenheim bed on a winter's night.

With 20 per cent more producing grape land than last year - when 1250 workers were required for pruning - approximately 1500 people will be needed in the vines this year.

Despite that increase, Central Amalgamated Workers Union Marlborough representative Steve MacManus said there was a growing "pattern" of camping grounds favouring short term visitors over vineyard workers.

With the camping grounds included there wasn't enough accommodation, so without them there could be real problems, he said.

The Blenheim Bridge Top Ten holiday park will not be taking in long term residents this year, with owner Lyn Brice saying she was trying to steer away from them.

She said the park took around 30 "long termers" in previous seasons, but the new ownership was trying to upgrade the park for holiday campers.

Despite the new policy, she said they were getting 10 inquiries a day for pruning season accommodation.

At the other end of the scale the Blenheim Motor Camp and Backpackers, also under new management, has a policy of long termers only this season.

Owner Michelle Wilson said she was turning away holidaymakers and saving beds - priced at around $100 a week - for semi permanent guests.

But she said while they had spare beds now they were filling up quickly and were likely to be full within the next two weeks.

Marlborough Horticulture contractor Bob Lee said there would be a shortage of accommodation this year "no doubt about it".

His own backpackers still had 10 beds available but they would be gone when the pruning season heated up, he said.

"Our company is expecting an influx of 20 to 30 people and the rest of the contractors in Marlborough would be similar.

"Once the backpackers are full there is nowhere else for them to go.

"And we are going to have a problem this year."

He said he had already heard of a lot of people sleeping in their vans, despite the Marlborough District Council's recent decision to fine people $100 if they sleep in their vehicles on council reserves and carparks, and refuse to move on.

Marlborough Contractors' Federation chairman and partner of Vine Power contracting service Jason Kennard said the issue of accommodation shortages was long on discussion and short on solutions.

He said wine companies and contractors had some responsibility to find accommodation for the labour they were bringing into the region.

Work and Income regional commissioner Janine Dowding said she was well aware the height of the pruning season would bring housing challenges.

She said Work and Income would monitor the problem, but "there are no easy answers".

Industry and other stakeholders needed to acknowledge that low levels of unemployment in Marlborough - with only 95 people on the unemployment benefit - meant viticulture was becoming increasingly reliant on transient workers, "and this inevitably increases the demand for accommodation", she said.

Options for solutions needed to be explored by industry, the council, the community and Work and Income, she said.

There is some good news on the ac

[David Renwick]

I see a problem with the accom demand/shortage currently being during the pruning season only.
If the Marl D.C. would allow short term, long-term, backpackers and other budget tourists in the facility then it cld compete with the rest in the low budget mkt at any time of year.

In spite of being stimulated by this great opprtunity by Donner I've bought a real dunger doer-upper today so can see myself grafting for the next 2-3 months. Anyone want a 3 bdrm house in Woolston to rent? Only $210/week. [:p] Soon to be a palace.[:I] Something to stretch my project mngmnt skills with and keep me motivated.:D

[David Renwick]

I meant DONNIE - not Donner. [:I]

[Capitalist]

That's wonderful news David, and I salute you [:X]

[David Renwick]

Shucks Cap'[:I][:p]:D[:X][8)][^][^]

[Capitalist]

This should encourage you...from O'Herald. There is big money in the lower end of the market, that's for sure.

$50m backpacker empire sold

22.06.2004
By PAUL PANCKHURST
Launched 13 years ago in Auckland's Fort St, a backpacker business empire was valued at close to $50 million in a sale sealed yesterday.

The buyer of ACB Holdings - the initials stand for Auckland Central Backpackers - is Australian private equity fund Ironbridge Capital.

It did not say how much it was paying but said the enterprise value of the business - the combination of equity and debt - was close to $50 million.

ACB has 1200 beds in four complexes in Auckland, Queenstown, Pahia and Rotorua, with associated bars, travel agencies and internet cafes.

Its managing director, Campbell Shepherd, 38, is taking a minority stake by reinvesting some of his share of the proceeds. Some staff may also invest.

The two founders, Neville Chandler and Mark Draskovich, and a third investor - "Rich List" member Humphry Rolleston, of Christchurch - are leaving with an unspecified number of millions.

Shepherd will keep running the business.

Asked if the deal marked a coming of age for the backpacker industry, Shepherd said it was "starting to get some of the respect we deserve" after years of lip service from tourism bodies.

He said more than 300,000 backpackers visited New Zealand each year, spending $1.3 billion.

ACB and Ironbridge indicated the private equity fund's shareholding in the company would be 75 per cent to 80 per cent.

Kerry McIntosh, of Ironbridge, said the fund would exit in three to five years via a sale to another business or a sharemarket float.

The private equity fund has bought into a growth story backed by property assets.

ACB's expansion includes hundreds more beds in Auckland and Rotorua, a plan for a new complex in Taupo, and ambitions for Australia and the South Pacific.

Shepherd said the company had property - including a prime Auckland location on Queen St - worth $28 million. It is no longer on Fort St.

Asked why the other investors were leaving, Shepherd said they now had different priorities.

[willy_wonker]

Budget accommodations are great cashflow business.

When private equity funds are involve, you know it has to be good or they cant flick it on in later date.