5th July 2019 By Contributor
James Cavanagh
Imperium Group’s James Cavanagh, general manager at Eichardt’s Private Hotel and The Spire, on the changing demands of the luxury market and the challenges Queenstown faces with insufficient infrastructure and staffing.
The Imperium Group offer a collection of luxury, boutique properties, comprising Eichardt’s Private Hotel, The Spire Hotel, and a collection of villa properties in the Queenstown region as well as Pacific Jemm – an 80-foot luxury yacht that offers cruises on Lake Wakatipu.
The historic Eichardt’s Hotel has been around since the 1870s, in its current format since 2001, and under Imperium ownership since December 2010. The Spire Hotel was added to the group in 2014, and Pacific Jemm in July 2018. The Elms at Lake Hayes is a relatively new villa offering and was added in December 2018.
The Imperium Group is owned by Andrew Cox who is originally from Christchurch but based in Melbourne. The group has many different ventures in Australia. We are the main hospitality operation in Queenstown and are 100% lux. During peak times we employ approximately 100 staff working across our hospitality business.
Our customers are predominantly from North America and Australia, focussed seasonally with the US travelling here in summer and the Australian market in winter. Our restaurants and bars see a cross section of all of Queenstown’s visitors, from all over the world – and also a lot of domestic New Zealanders.
Through the summer months, the majority of customers are from North America, with a few from Europe and some South American visitors – from Mexico, Brazil and Argentina. The South American market is growing with air connectivity via Air New Zealand’s direct flights assisting this growth.
New Zealand appeals to young South Americans who are adventurous travellers. They love the outdoors, climate and the clean and green environment that they don’t necessarily have at home. Mexicans, in particular, enjoy our urban destinations. We see honeymooning couples staying in Queenstown luxury lodges – young twenty-somethings from Mexico City who enjoy the urban vibrancy of Queenstown.
In the summer months, northern hemisphere visitors make up around 85% of our market, with 10% Australian and 5% from other countries. We don’t get a lot of domestic customers but sometimes see couples from Auckland or Christchurch on weekend breaks. We see a regular core of visitors from Australia that come to Queenstown to avoid the heat of the Aussie summer. The Australian ‘celeb’ market is pretty big in Queenstown with media and sports personalities and we see a lot of them in our restaurants – many have holiday homes here.
In winter our customers are 85% Australian – they come to ski, with a smaller proportion of North Americans. The North American market in winter is growing as it’s their summer holidays and main vacation time.
Year round we see around 42% Australian, 40% North American and a mix of Latin American, European and Asian visitors – mostly from Hong Kong and Singapore as opposed to mainland China.
In general, with the luxury market, we attract an older demographic – people who have been around a bit longer and accumulated a bit more wealth. The older demographic generally enjoy soaking up the atmosphere and the remote peacefulness as opposed to the adventure activities. The Spire has more of a mix of the younger, hip sector – urban cool getaways, the crowd that hit New York and San Francisco.
We’re getting more and more extended family visits, particularly from the North American market – often with three generations coming over to spend time together. One of the great things about New Zealand as a destination is that we’ve got something for everyone. The different generations can have a great day out and reconvene at the end of the day, having had very different and valuable experiences.
There is a growing demand, particularly from the North Americans with extended families, for villas. Having become familiar with the European villa experience, these customers are looking for similar options wherever they travel in the world.
We’re excited to have added The Elms on Lake Hayes villas to our portfolio of properties (since Dec 2018). The Elms have a unique and world class location on the shores of Lake Hayes overlooking Coronet Peak and The Remarkables. They are separate villas that offer the flexibility of being completely private or connected via a central foyer. We integrate the full hotel services into our villa accommodation options, unlike basic villa rental offerings, offering daily housekeeping, a concierge/butler, and private chefs if required. To be able to offer that quality of product in New Zealand is fantastic.
Our winter is looking strong so far. We’re very pleased with what we’re seeing currently. Accommodation demand is up on the prior year (although slower growth than seen over previous five years), and we’re delighted to be one of the better performing hotel operations in the region in this regard. There have been a lot of new openings at the lower/middle end of the market.
As general manager, I am focused on maintaining the growth we’ve enjoyed over the last five years. Queenstown as a region is seeing signs that there is potentially a softening, as other markets are coming online and there are alternative accommodation choices. For us, it’s about maintaining our market position, maintaining our quality, and being evangelical about our high service levels and quality of product. People can stay anywhere, and we want to make sure we are top of mind.
New Zealand, in general, has enjoyed a fantastic 5-6 years, and credit to Tourism New Zealand for the work they do internationally. They are constantly winning recognition as a market-leading tourism board. Whenever I attend trade shows in Europe and the US, Tourism New Zealand is certainly one of the ‘must have’ appointments for international operators. They have helped support us at the coalface and we’re very fortunate to have such a proactive and outstanding tourism board who do a great job flying our flag.
When I, and other lodge operators, are travelling overseas, we’re flying the flag for the New Zealand brand first and foremost. We’re looking to ensure that New Zealand is the destination of choice and from then on consumers will filter to wherever they need to be – to what is best-suited to them. From our perspective, if brand New Zealand is strong then we’ll win in the end. As the region grows, so does the demand for staff. And this is another key challenge for us.
Queenstown as a region is staffed at about 90% by international workers. In our business, within 100 staff members, there are probably 8 or 9 Kiwis (born and bred – as well as naturalised expats). We need help from Immigration NZ to speed up the visa processing times for our international staff, to think outside the square to help us deliver and to make sure we’ve got staff to open the doors every morning. There are businesses out there, pubs in town, that have said they’ve had to shut for three days because they didn’t have enough staff.
We often hire international staff on working holiday visas which are valid for a year. After that year the staff member needs to transfer to a sponsored visa. When we submit an application for a sponsored visa, Immigration NZ responds and tells us that the likely processing time will be 10-12 weeks. If that staff member’s visa runs out in the meantime, they’ll often leave the country because they can’t work.
As well as slow visa processing times we also have challenges with Immigration NZ declining visas after making a judgement about whether the staff member has the relevant skills and experience to do the job.
When we as operators train someone and want to promote them, we ought to have the ability to do so. It’s our skin in the game. If our staff don’t perform, then our business will suffer, so let us make that call as operators. There needs to be a little bit more vision from immigration officials about that type of situation. This is changing in the near future with Accredited Employer Status, but that may be costly for smaller businesses.
The things I’d like to see change in the industry are: a focus on quality over quantity – both in terms of the product and the target markets – and incentives to get more young New Zealanders into the industry to ensure we’re delivering a world-class Kiwi experience.
Visitors want to speak to Kiwis, and they want to hear our stories. I don’t have the solution but would love to see more Kiwis. I think it needs to be a challenge for the government in terms of focusing their training incentives to try and get more young Kiwis into the industry.
James Cavanagh spoke to Jane King for this column. If you’d like to contribute to our An Operator’s View column, contact jane@tourismticker.com.
