Buy-Kiwi strategy pays off for Scenic Circle

Scenic Circle Hotels says moves to upgrade parts of the chain to four-star-plus and use more Kiwi-made products are working, despite higher costs.

Managing director Brendan Taylor said Scenic Circle had been ramping up the New Zealand-first strategy, despite the fact that buying Kiwi added several hundred thousand dollars to the millions spent each year at the group's 15 hotels.

The branding efforts were already drawing in more overseas visitors and support from New Zealand corporates.

"(For example) we're saying to our chefs – if you're innovative with your food and you're using provincial products then it's not really going to cost you a lot more," Taylor said.

Scenic Circle staff had visited Jo Seagar's cafe and cooking school in Oxford as part of the learning process.

"Her theme is very similar – she's into provincial and simple food that is presented well."

Recent work on Scenic Circle's Bay of Islands hotel extension and upgrade had taken it to a 4½-star facility with a resort island feel.

"We (Scenic Circle) were traditionally a three-star product, but because the market has shifted the people coming into New Zealand want a better experience," he said.

"The four-star market now is the one probably developing the best (returns)."

Chain owner Earl Hagaman, who lives in Christchurch, was behind the buy-Kiwi move and asked others in the hospitality trade to support local goods.

Taylor said using Kiwi-made products also fitted with the increasingly important trend of being carbon-neutral in terms of running a business.

Products sourced locally included carpets from Cavalier Bremworth, beds from Sleepyhead and Sleepmaker and a two-year deal with Villa Maria worth $2.5m to the winemaker.

"It's a strategy we started off having a really good look at 12 months ago, purely because being a New Zealand-owned hotel company we looked at what really what made us different to all our competitors," Taylor said.

"Having a lot of strength in the overseas wholesale (tour organising) markets, we concentrated on trying to give the overseas people a New Zealand experience."

Taylor said the philosophy of higher grade premises would flow through to the planned five-star Franz Josef Hotel.

Work at the greenfields site is scheduled to start in January. The hotel will open between October 2008 and January 2009.

The West Coast Development Trust is doing due diligence on an investment in the project, despite criticism from some residents.

The names of other joint-venture partners behind the hotel are confidential, as is the development's cost.

- © Fairfax NZ News