Update, 16 December 2002: Scenic Circle Hotels will double the size of its latest hotel acquisition, the Park Lodge on Paihia, executive chairman Earl Hagaman said today.
Last week, Scenic Circle managing director Brendan Taylor wouldn’t disclose the price tag on the Paihia acquisition. Today, Mr Hagaman added the acquisition & expansion to make $12 million.
“We anticipate completing 60 new rooms by the end of next year, in addition to the 58 currently available.” Mr Hagaman said the hotel & improvements worth $12 million would cement Scenic Circle’s position as the
2nd largest hotel group in New Zealand — with 17 hotels, not the 16 stated last week.
Mr Hagaman said the company planned to have 21 hotels operating under its banner by the end of 2003.
He said improvements at the Paihia hotel, in Seaview Rd, would include a new spa & wellness complex, and a resited pool to complement existing conference & dining facilities.
“Staff numbers at Paihia will be retained and at least 15 permanent new jobs will be created as a result of expanding the hotel facilities,” he said.
Scenic Circle buys Paihia’s Park Lodge
Hotel chain has expansion plans there & through North Island
Scenic Circle Hotels Ltd went unconditional last Friday (settlement Monday 16 December) on the 3-star The Park Lodge on Paihia. The name will change to Scenic Circle Bay of Islands Hotel.
Managing director Brendan Taylor said Scenic Circle had been looking for an opportunity in the area for 4-5 years but had always found land too expensive for a hotel development to stack up. “You’re looking at $4-5 million to buy a piece of land.”
But the Bay of Islands is important to overall business. The company deals with wholesalers who have business there 7 days/week over summer, and the company was missing out on a lot of independent traveller (FIT) programmes. The Paihia deal should flow through in business for about 7 of Scenic Circle’s other hotels.
It’s Scenic Circle’s 5th North Island hotel out of 16 nationwide.
The Park Lodge sits on 1.6ha at the entrance to Paihia and has 58 rooms (20 deluxe rooms added in December 2001, 38 chalet-style units), 3 conference venues, 2 fully licensed restaurants plus a lounge bar, swimming pool, campervan/caravan park & a camping ground.
Land content the driver
Mr Taylor said the land content was the driving force behind the purchase. “Land costs in the Bay of Islands may become prohibitive in years to come, hence our decision to buy now. The size of this property represents a significant opportunity to expand.”
Just how that expansion is done will be worked out over summer. Scenic Circle would then concentrate on getting the Auckland market back up to Paihia, especially in winter. “In recent years the Auckland market hasn’t been looked after very well, especially the conference end of it,” Mr Taylor said.
Scenic Circle took over the Blenheim Country Lodge Hotel in September and opened the Te Pania Hotel in Napier in October, has hotels in Auckland (the Airedale, opposite the Town Hall), Hamilton & Rotorua, and is looking at further North Island opportunities.
Mr Taylor said Scenic Circle would roll out several expansion announcements over the next 6 months, for projects to be carried out over the next 1-2 years. “A lot will be joint ventures, with developers and with people who want to be long-term property owners. Aurum (Hotel & Suites, Queenstown) & Te Pania have been unit-titled and we’re looking at unit-titling for Kaikoura.”