Tourism aligned with conservation
Pioneering Otago tourism company Real Journeys is the Otago Daily Times Business of the Year 2018. Senior business reporter Simon Hartley charts the rise and rise of parent company Real Journeys with its general manager Paul Norris and Richard Lauder, chief executive of Wayfare, aligned with subsidiary operations Cardrona Alpine Resort, Go Orange, the International Antarctic Centre and Canyon Food & Brew Co.
EIGHT acquisitions during the past five years have helped form Real Journeys into one of the South Island’s five largest tourism operations.
Employing 1500 people at the peak of its season, Real Journeys and its subsidiaries will this year have 1.5 million visitor activity bookings, while maintaining a fleet of 18 boats and large vessels, an asset base worth several hundred million dollars.
Behind the corporate success of the Hutchins family private company is a core of conservation values, largely unknown to the wider public.
The legacy of a conservation focus by company founders Les and Olive Hutchins can also be measured in millions of dollars invested in projects and ongoing fundraising, all leading to the protection of an increasingly large number of native species and their habitats.
Les Hutchins was adamant from the beginning that tourism and conservation should be undertaken handinhand, not despite one another.
Arguably, the company is one of Otago’s best kept secrets.
In the beginning
In 1954, Les and Olive Hutchins bought the fledgling ManapouriDoubtful Sound Tourist Company.
Real Journeys’ first excursions were into the wilds of Doubtful Sound, its clients tramping 22km from Lake Manapouri over the 671m Wilmot Pass, down a steep oneinfive gradient to boat the wilderness Doubtful Sound.
Sixtyfour years on, the company encompasses myriad South Island tourism activities, including the International Antarctic Centre in Christchurch, but is mainly considered a maritime-tourism operator.
There is jetboating around Lake Wakatipu or more sedate crossings in TSS Earnslaw to Walter Peak Station.
There are boats across Lake Manapouri, excursions to Lake Te Anau’s glow worm caves, overnight or weeklong trips visiting Doubtful and Milford Sounds, snow sports at Cardrona, and conservationfocused boat trips to Stewart Island.
A new entity, Wayfare, was launched in October to represent its tourism companies — Real Journeys, Cardrona Alpine Resort, Go Orange, the International Antarctic Centre and Canyon Food & Brew Co — in the international market.
Wayfare chief executive Richard Lauder (55) was attracted to Real Journeys more than six years ago. He was happy to swap a long career in chemical engineering and infrastructure contracting, in which he had held a variety of general manager and chief executive roles over 21 years.
Along the way he gained an MBA from the University of Otago, and a degree in philosophy, and worked at the Mataura Paper Mill for five years.
This year, he was appointed chairman of the national body Tourism Industry Aotearoa.
Real Journeys’ Te Anaubased general manager, Paul Norris (54), recently celebrated 25 years with the company.
He initially worked at Cardrona in 1995 before moving to Fiordland Travel/Real Journeys’ Milford Sound operations, as assistant manager in 1993.
While both men are candid about the tribulations and triumphs of Real Journeys, from the Global Financial Crisis of 200708 to the recent tripling of revenue, they talk animatedly about the company’s conservation projects.
Environmental focus
Mr Lauder said about $500,000 was spent on the removal of 90ha of wilding Douglas fir around Walter Peak Station, which was acting as a ‘‘seed stock’’ for nearby areas, plus another half million on the Cooper Island restoration project, removing predators from the island, the third largest in Dusky Sound.
Once the rats and stoats are eliminated, he hopes two kiwi species and kakapo and other endangered native birds can be reintroduced.
Mr Norris said in the future about $65,000$75,000 would be spent annually to maintain Cooper Island, coming from farepaying passengers on on weeklong discovery expeditions which visit the island.
Mr Lauder said another major conservation project was being considered, examining the ‘‘decarbonising of tourism’’, but as a decision was yet to be made, he declined to reveal further details.
Another recent development is the Conservation Discovery Expedition, a boat trip to Rakiura/Stewart Island, where passengers assist Department of Conservation staff in field work, track and trap clearing around Port Pegasus and The Neck.
From that trip, $500 of each passenger’s ticket goes towards Fiordland predator control.
Real Journeys’ fundraising and cofundraising with the Depart ment of Conservation has amounted to several hundred thousand dollars during the past few years.
Other major achievements for Mr Norris are career development for staff and Real Journeys’ community involvement.
At a recent school prizegiving, he recognised with pride the children of staff called to the podium.
‘‘I like to focus on the conservation work, but also to see staff elevated to new roles and forming a long career in tourism . . . then going on to building contributions to the community,’’ he said.
Later, at the wharf and aboard Earnslaw, Mr Norris greets many of the multinational hospitality workers, ship’s crew and service providers by their first name.
More than 30 different nationalities can be identified among both Real Journeys’ summer and Cardrona winter staff, while the balance of 50% to 60%, depending on the season, are largely fulltime, permanent New Zealand staff.
Gender diversity ranges from about 40% up to 55% female across each operation.
Employing 1200 to 1500 people across its lower South Island and Stewart Island operation, Real Journeys is a significant economic contributor to the region, the largest tourism activities operator in Queenstown.
However, its own journey has not always been plain sailing.
Mr Lauder said tourism in Queenstown and Central Otago had been tough, especially in the wake of the Global Financial Crisis and the Christchurch earthquakes.
‘‘Tourism here was at a real low in 2012,’’ he said.
That year, 375,000 guests visited Milford Sound. By 2014, there were 460,000 and last year the 2012 low point was doubled to 750,000 visitors.
Both Mr Norris and Mr Lauder agreed that while tourism into New Zealand was still growing each quarter, growth had softened and some regions were harder hit than others.
Mr Lauder said there had been three consecutive years of greater than 10% growth each, but the past year was ‘‘flat’’.
‘‘In general, it has really flattened off in Queenstown, the Southern Lakes and Fiordland.’’
The ‘‘pinch point’’ was accommodation shortages in Queenstown and the Wakatipu Basin.
‘‘Accommodation’s become a real issue. It’s becoming harder for wholesalers [of tours] to secure accommodation,’’ he said.
Fewer people were taking tours, and many of those arriving in the district were spending less time there, he said.
However, numerous Queenstown construction developments had 1000 beds in the pipeline and other developers were seeking building consent.
‘‘We’ll continue to grow,’’ Mr Lauder predicted.
Accommodation was also a major issue for Real Journeys staff and online shortterm rentals were displacing longterm renting.
‘‘That’s become a doubleedged sword for us,’’ he said of AirBnB catering to tourists, but soaking up the rental housing stock.
Some of Real Journeys’ staff can live and work aboard the larger vessels. There is landbased accommodation in Milford Sound and at Walter Peak a ‘‘staff village’’ is being moved and expanded, to eventually double accommodation to 50 people.
Mr Lauder ruled out Real Journeys entering the wider accommodationprovider market as a standalone developer.
All in the family
The Hutchins family still control Real Journeys. Les and Olive’s son Bryan is a longtime board director, along with his son Nick, and there are five independent directors, plus a oneyear director programme in place for other family members.
Les Hutchins garnered numerous awards for his dedication to conservation efforts.
In 1973, he was named a founding member of the Guardians of the Lakes, and has spent 12 years on the New Zealand Conservation Authority.
In 1998, he was awarded an Order of the British Empire, he was a founding patron of the New Zealand National Parks and Conservation Foundation, and in 2002 was made a Distinguished Companion of the New Zealand Order of Merit for his services to conservation.
Mr Hutchins died in December 2003 and Olive recently retired in Queenstown.
The Hutchins were instrumental in breaking the government monopoly on tourism boats operating in Fiordland in 1970, fighting construction of the Manapouri power station, and were successful in fighting the raising of Lakes Te Anau and Manapouri.
The Hutchins bought TSS Earnslaw — which the government was considering scuttling in Lake Wakatipu — in 1969, Mr Lauder said.
Asked if Earnslaw was still viable and cost effective — it will be 107 years old next year — Mr Lauder conceded its annual running costs were ‘‘significant’’.
However, it carried 250,000 passengers annually and featured widely in any form of Queenstown marketing.
‘‘It’s always bungy and the Earnslaw images that people see when there is any story about tourism,’’ he said.
Looking forward
Despite the soft tourism environment at present, Mr Lauder has a bright outlook for the next five years.
‘‘There will be good global growth over the next few years, 5% to 7% [annually], especially from [increased] airline travel.’’
About 35% of clients were from China, 40% combined Australian and domestic, 10% the United States and the balance from Europe, Japan, South America, Germany and other Southeast Asian countries.
He believed South America and India were the emerging tourism markets.
India, in particular, ‘‘would be good for New Zealand’’, as its national holiday period was the shoulder season here, he said.
At the height of the mid-September to midMay season, the overall daily operations often host 5000 guests, including daily meals being prepared at Milford Sound and Walter Peak Station for about 2000 people.
‘‘During the past five years, we’ve seen revenue triple . . . this year there’s 1.5 million guests across the entire group,’’ he said.
While ‘‘off season’’ downtime is essential to survey and maintain its large fleet of boats and vessels, the 2013 purchase of Cardrona, valued at close to $40 million at the time, serves to keep cashflow ticking over, as that operation employs about 700 part and fulltime staff during the ski season.
During the past five years, Real Journeys had bought eight complementary companies.
‘‘Yes, there’s been a big growth phase by acquisition . . . but the hurdles are getting higher,’’ Mr Lauder said.
Real Journeys would be going into a period of consolidation for the year ahead ‘‘and will be a bit more conservative’’.
It is a testament to the Hutchins family and present management’s commitment to conservation that Real Journeys’ most public accolades quietly lie in conservation achievements and awards.