Covid-19 coronavirus Delta outbreak: Haka Tours part of $75m Australasian capital raise to reboot company

Haka Tours will become part of the Drifter Hospitality Group following acapital raise with a $75 million target to fund expansion in Australasia.

The funds will be used to buy new properties and launch Drifter in New Zealand and Australia and take theevolving hybrid hotel sector in this region further.

Haka Tours won awards for its innovative approach to tours and associated accommodation before Covid-19 struck and its founder Ryan Sanders believe the good times will come again in the new entity.

He will be the founding chief executive of Drifter which is aiming to buy three new hotels, in New Zealand and Australia and updating Haka’s existing properties in this country before further fundraising to expand into the Asia-Pacific region as travel recovers from pandemic lows.

New Australian investment bank Barrenjoey is behind Drifter and after the initial $75m raise to buy Haka and get the venture off the ground it would have a $125m portfolio and with plans to expand that to $200m plus over three to five years.

Sanders said he had started talking last year to Barrenjoey banker Hugh Stephenson who will be fund manager and a founding director.

Intrepid Travel has taken a 10 per cent stake in the initial raise which Sanders said was a strong vote of confidence and would bring substantial international expertise to the new venture.

He founded Haka in 2007 and 10 years later the business won Tourism Industry Aotearoa’s supreme award.It catered to high-end backpackers and adventurous older people.Pre-Covid about 70 per cent of Haka Tours’ 7000 to 8000 clients a year are solo travellers, mainly from Australia, Canada, Britain and Germany.

He said the new venture was aimed primarily at millennials, the oldest of who are now about 40 with big spending power and a strong propensity to travel.

The hybrid hotels will be premium high density accommodation model with a diverse range of room types to cater for a broad mix of travellers.

”We’re following that (millennial) market as it grows up. The second thing is that actually while this is millennial-focused, we’re very much targeting the active baby boomer market. And that’s really strong – more active people in the 50s and 60s.”

He said quirky and unique hybrid hotels such as Moxy owned by Marriottand Mama Shelter were one of the fastest-growing segments of the hotel market.

Social media-worthy rooms and communal spaces helped publicise them for nothing and they also had good local food which would appeal to residents as well as encouraging guests to dine in-house.

Their operation would be highly digitised with low staff requirements including airline-style mobile check-in and keyless entry.

Why so optimistic

Sanders said the time is right for expansion.

”Covid has given us a couple of things;one is a bit of dislocation in the market, which is enabling us to get our hands on assets which we wouldn’t have transacted in normal times, but it’s given us a window of opportunity to really capture this market before the big boys come here,” he said.

”They’re going to come here – there’s enough space in the market for a plethora of hybrid hotels and we really want to be first and really getting a market share first of all in Australia-NZ and then Asia Pacific.”

There was significant pent-up travel demand from New Zealand and Australia.

”There’s been winners and losers and that’s across all industries but also across tourism destinations, and Australia [and] New Zealand are definitely experiencing pent-up demand.”

Haka had been getting inquiries and even some future bookings throughout the pandemic for tours and its lodges and hotels throughout New Zealand.

”It’s been probably the best 12 months in terms of securing new business. So when the borders do open we firsthand can talk about that pent-up demand.”

Across the tourism sector it had been a painful 18 months.

Figures released on Friday show that in the year-ended August 2021, core tourism accommodation providers (including managed isolation and quarantine facilities) hosted a total of 30.3 million guest nights.

This resulted in an occupancy rate of 42 per cent across the year, with an estimated 93 per cent of these guest nights coming from domestic visitors, the Ministry of Business Innovation and Employment figures show.

Last month 1.37 million guest nights were recorded in core tourism accommodation properties, the lowest monthly total since the data began in mid-2020.

This was due to New Zealand entering alert level 4 fromAugust 18 and led to a 17 per cent decrease when compared with August 2020.

This resulted in a 27 per cent occupancy rate in August this year.

Based on provisional estimates, around 13 per cent of core tourism accommodation properties were closed or had no guests during August 2021.

Sanders said the broader tourism scene at the moment is clearly fractured and much in need of additional external financial support.

”On an emotional level, I think there’s a lot of people really struggling,” he said.

”These arebloody hard times for everyone including myself but I’m more than confident that the good times will return – sitting here in 2021 I can understand why a lot of people can’t put a bit of head above the parapet.”

He said he was ”super confident” that into 2023/24 tourism would be much healthier.

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