The growth of a tourism giant
A small family-owned tourism company has grown into a giant of New Zealand tourism in just six years, hosting 1.6 million people in the last year alone. Debbie Jamieson talks to the man who has driven the expansion.
When the company that owned the TSS Earnslaw suddenly bought a skifield, many people were surprised. The family-owned tourism company Real Journeys, originally known as Fiordland Travel, had been known for its buses, boats and planes.
But times were tough in the tourism industry in 2012 following the global financial crisis and the 2011 Christchurch earthquake.
So when Cardrona came on the market, Real Journeys chief executive Richard Lauder, just one year in the job, seized on the chance to set a new direction for the well-known business.
‘‘I remember when I first said it to the board there was a bit of ‘that seems unusual, why would we want to go there, we’re used to ships and maritime stuff’.
‘‘I went back to the [company’s new strategic] plan and said ‘here’s the plan and this fits perfectly into the plan’ . . . and there was sort of a ‘yeah, it does’.’’ But he didn’t stop there. Weeks later the company bought the 155-hectare property surrounding its Walter Peak base on Lake Wakatipu, including the 8ha of land it had leased for more than 20 years.
Lauder would not say how much the properties cost, but said the chequebook was then closed for a couple of years while other work was under way.
Subsidiary Go Orange was set up as a new adventure brand and Lauder began to overhaul the company’s existing products, starting with the food at Walter Peak.
‘‘The food was rubbish. I don’t know how Real Journeys got in a rut of accepting what was in place for such a long time. They had the wholesale tour market that went out there and did the same thing over and over again.
‘‘What surprised me was how
hard it was to fix it – the complexity of commercial kitchens and commercial processes and embedded processes and embedded thinking.’’
The chequebook came out again in 2015 when Real Journeys purchased Christchurch’s International Antarctic Centre, followed by Queenstown Rafting and coach services company Kiwi Discovery a year later.
With the latter came a cafe, which recently relaunched as the Canyon Food and Brew Company.
This year, the company announced an operating partnership between Cardrona Alpine Resort and Soho skifield owner John Darby, with a plan to create New Zealand’s largest ski area.
It also purchased jet boat company Thunder Jet this year, including Queenstown Water Taxis, which now operates ferry services between Frankton Arm and central Queenstown.
One business they were not interested in was the Kingston Flyer, despite the synergies many saw in having the steamship and the steam train operating at Lake Wakatipu.
‘‘We were asked,’’ Lauder says. ‘‘It’s a train that goes from nowhere to nowhere. For us it wasn’t a viable thing. We would strongly urge somebody to put it on the rail line from Invercargill to Bluff. We think that’s where it should operate.’’
The pace of change has been relentless and a new company structure was recently established to better represent the various businesses. Now the parent company is Wayfare, with Real Journeys, Go Orange, the International Antarctic Centre, Cardrona Alpine Resort and Canyon Food and Brew Company as its brands.
Lauder says by taking a series of ‘‘big steps’’, the group now hosts about 1.6 million customers a year.
However, anyone who knows the history of the company should not be surprised, he says.
‘‘When Les and Olive [Hutchins] bought the Manapouri-Doubtful Sound tour company back in 1954 that was the start. Three years later they bought the Te Anau Glow Worm caves and two years after that, in the late 1960s, they bought the Earnslaw, then they moved into Milford Sound and competed with government tourism.
‘‘So there were a lot of brave moves in those first 16 to 17 years.’’
The majority of the company is still owned by the Hutchins family and stays true to its roots.
Les Hutchins is considered a tourism pioneer (he was posthumously inducted into the NZ Business Hall of Fame in 2011), but is also recognised as an instigator of New Zealand’s environmental movement, having been a founder of the Save Manapouri campaign, the Guardians of the Lakes and the New Zealand National Parks and Conservation Foundation.
The company works to maintain those traditions by working to eradicate wilding pines at Walter Peak and offsetting the greenhouse gas emissions from the Earnslaw, which requires planting 500ha of marginal farmland back into native bush.
Lauder is also interested in wider sustainability issues.
The man who spent 27 years as a manager and chief executive of infrastructure and contracting companies is now the chairman of Tourism Industry Aotearoa and deeply concerned about some of the issues affecting tourism in New Zealand.
‘‘When I joined the tourism industry in 2012 we were going through tough economic times and the focus was around growth . . . For whatever reason, we’ve been very successful with that . . . so now we’re seeing the pressures of that growth.
‘‘It’s time for the industry to move on and focus on sustainability and making sure that tourism is good for New Zealand and New Zealanders.’’
Issues like visiting drivers and freedom camping threaten to erode the public’s enthusiasm for tourism, while the traditionally low wages cast the industry in a negative light. Lauder is determined to work on all of these while he has the top job.
The Tourism Sustainability Commitment was introduced a year ago and now has 640 tourism companies signed up, committing themselves to 14 promises across economics, host community, staff community and environmental impacts. More recently there was the Tiaki Promise – inspiration for New Zealanders to protect their land, and for tourists to become guardians of the place they visit.
His own company has been building staff accommodation and staff have been shifted to a ‘‘fair wage’’, aligned to the living wage, he says. ‘‘Tourism should be an industry people want to get involved in.’’
‘‘There’s still a number of operators out there who say they can’t afford to pay staff more or they’ll go broke. I just think . . . if all the business is, is a transfer of labour to capital then shut it down . . . I think we’ve got to move on from that as an industry.’’