Ruapehu skifield company hits the rocks
Warmest winter on record makes season disastrous
Ruapehu Alpine Lifts Limited (RAL) has gone into voluntary administration after three years of disastrous ski seasons due to the lack of snow and the Covid-19 pandemic.
The company owns and operates the Whakapapa and Tū roa ski areas and employs 196 staff.
Turoa ski area closed its gates for the season last week, three weeks earlier than planned. Whakapapa remains open for business while administrators work through the options.
Taupō Mayor David Trewavas said it was “very sad” to see the skifield placed under voluntary administration however, for now, it was still “business as usual”.
“It is a wonderful, iconic product and the largest skifield in New Zealand. Hopefully someone will come to the rescue. I really feel for the staff and the associated communities.
“It’s still open, still up and trading and still open for business, that’s for sure. The general public won’t know any difference and hopefully that continues.”
The council has a $1 million bond holding in the Sky Waka gondala so it will be having discussions with admin-istrators around that, Trewavas said, although RAL had met its obligations to date.
“To be fair, the Sky Waka has been going well so hopefully that will continue.”
A wet winter saw rain repeatedly wash away the snow this year, and the ski area’s 50 snowmaking machines proved no match against balmy temperatures. Climate change appears to be a significant factor after New Zealand experienced its warmest winter on record — for the third year in a row.
The disastrous snow season comes after the previous two seasons were severely disrupted by Covid-19, leaving Tūroa and its sister ski area Whakapapa on the brink of bankruptcy.
Last year, the company lost nearly $6 million and its total debt climbed to over $30m. The company has been seeking a major new investor, so far without success.
The two ski areas, which are among New Zealand’s largest, are owned by the same company and located on opposite sides of Mount Ruapehu. Should they be forced to close permanently, it would leave the North Island without any major ski areas.
John Fisk and Richard Nacey, of PwC, were appointed voluntary administrators of RAL Tuesday to try and remedy this.
“The company has had a very difficult last three years, with the impact of Covid-19 restrictions, paired with poor weather this season, meaning that the business has been placed under significant cash flow pressure,” Fisk said.
Fisk also said the directors of RAL have explored a number of options, including a capital raise and a request for additional Crown funding, but have not been able to secure the required level of money.
“Our job as voluntary administrators is to consider a plan that can get a better recovery or better outcome than the company just going into liquidation.”
Fisk maintained that RAL is a significant part of the Central Plateau, so it’s important they try to retain some of its value.
“RAL can have up to 700 employees and they can bring an economic benefit of about $100 million a year to the region,” Fisk said.
Newly elected Ruapehu Mayor Weston Kirton said he feels deeply for all involved on every level, from the bosses to the workers on the ski fields and around the district. He said the tourists will now also miss out on one of the jewels of the North Island.
“The community will be shellshocked. I can only assume how traumatic is this going to be for the community and we’re going to do our best to ease that pain.”
After all the energy and time the district has put into the efforts to establish a destination in the North Island, Kirton said the last three seasons have been majorly disappointing.
Johan Bergman, the ski area manager at Tū roa, said it had been a tough season.
“We’ve had some pretty decent snowfalls, but they’ve generally been followed by rain events, which has washed a lot of the snow away,” he said. “And it’s been a bit warm this winter, too, over the whole country, so we’re really lacking that snow this year.”
Bergman said in his view, climate change is a background factor but this season has been more a case of bad luck. And he’s bullish on the sport’s future at Ruapehu.
“I always see skiing up here in the North Island of New Zealand,” he said.
Set up 70 years ago by ski enthusiasts, RAL operates as a nonprofit. It’s exempt from paying company tax and is required to put any profits back into enhancing the ski areas.