Land for backpackers scarce and costly

IN DEMAND: Coral Laughton, YHA NZ board chairwoman, in the reopened Rolleston Ave hostel.
IN DEMAND: Coral Laughton, YHA NZ board chairwoman, in the reopened Rolleston Ave hostel.

The backpacker industry is looking to re-establish accommodation in Christchurch after being pushed out by the 2011 earthquakes but those wanting new developments say finding land is tough going.

Land in the central business district, where successful backpacker businesses are traditionally based, is scare and expensive.

So operators have been talking not only to landowners and developers but also Christchurch and Canterbury Tourism and Christchurch City Council to find opportunities for new accommodation.

One larger operator that was in the city prior to the 2011 earthquakes was Base Backpackers which operated out of a Cathedral Square property, now demolished.

The Sydney-based operator is now looking for land for up to 300 beds in the central city but sites are expensive.

Another operator, YHA New Zealand Inc, has made some progress given that it already owns one site and leases another. Chief executive Mark Wells said the company's Rolleston House hostel in Worcester Blvd had been consistently busy since reopening in November.

The 50-bed property in a two-storey weatherboard property leased from the council was sitting at 100 per cent occupancy.

The YHA's other City Central YHA Hostel in Manchester St remained closed and talks with insurers were ongoing.

"We're a wee way down the track from resolving that."

There was strong demand for backpacker beds in the city, and talks centred around whether the freehold property owned by the YHA could be repaired or needed to be rebuilt.

Paul Crooks, who had worked as a YHA NZ marketing manager and helped found and run hostels in Canada, said he wanted to establish a new property. He had been looking for a suitable site in Christchurch for some time.

There were issues, such as land prices, and foundation and building costs and requirements, but he was looking at potential sites and building options, including joint ventures.

He had not been able to find a central city building he could convert into a backpackers, but "backpackers want to be near the CBD and the CBD needs the backpackers because they bring in a lot of vitality".

Christchurch and Canterbury Tourism industry partnership manager Caroline Blanchfield said she had been trying to link up accommodation operators with the owners of empty lots in the city to encourage new developments.

She had recently heard that the Celtic Backpackers in the city was to reopen about July/August.

Base Backpackers chief executive Campbell Shepherd said he was working with developers and building owners on potential replacement sites, given the former site was earmarked for a city central library.

Base favoured a central position in the redeveloped central business district to be close to the entertainment and sports precincts.

The backpacker, owned by the French Accor chain, Ivany Investment Group and Ironbridge Capital, saw the city as an entry-exit point for the South Island and needed 2500 to 3500 square metres of space within a complex.

"We're currently investigating both sites and building costs. Unfortunately everything so far we've looked at has come in a bit expensive for (land and building costs) and the rent we can afford to pay," Shepherd said.

New Zealand-owned hotel chain Scenic Hotel Group had the Charlie B's backpackers on Madras St before the brick building was demolished as a result of the quakes.

Managing director Brendan Taylor said the group was looking at options in the city, though probably in the four-star plus accommodation rather than the backpacker space. "We're talking with developers as to what opportunities are out there."

The Press