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Results of an industry-wide survey on holiday rental homes reveal an industry worth over $100m a year to local economies in the form of rates, maintenance and renovations.


The survey, conducted at the end of last year by Bookabach, Holiday Houses and Bachcare, aimed to create a body of data that could be used to assist local councils make decisions around tourism and visitor accommodation. Bookabach general manager Peter Miles explains, “MANZ (the Motel Association of New Zealand) have been actively lobbying district councils around the country to place restrictions on the holiday rental industry.

We came together as a concerned industry group to do this survey so we could provide councils with the information they need to understand the negative impact of increased regulation of holiday rental.”

Bookabach, Holiday Houses and Bachcare collectively list approximately 90% of the NZ holiday rental market, an estimated 10,000 actively rented properties. “We also wanted to be able to directly address some of the criticisms raised by Councils and MANZ related to health and safety,” says Miles.

The results were finalised just as Thames Coromandel District Council were accepting submissions on their proposed District Plan, which includes revisions that would place greater restrictions on holiday rentals. The group says that the proposed restrictions would make holiday rentals less affordable and they’ve made a joint submission to Council including results of the survey.

The survey attracted over 2,000 responses from holiday rental owners, 85% with free-standing baches and holiday homes (85%). The remaining 15% was made up of apartments, flats/duplexes and townhouses.

The survey data re-enforces the importance of holiday rental income to help support the lifestyle decision of owning a bach. “Nobody makes a killing from renting their holiday house out,” explains Holiday Houses general manager Andrew McKaskell. “What this survey proves is that rental income helps maintain and improve these properties over time. And, it helps owners justify having a second property they hardly use.”

The typical holiday rental is occupied for 25 nights a year by their owners and family members, and rented out an average of 60 nights a year. Owners received between $4,000 and $16,000 a year in rental with an average of $12,513. When asked about how important this income was to them, 73% of respondents agreed (56% strongly) that without holiday rental income they could not afford to keep or maintain a bach. 79% agreed (61% strongly) that without it they could not afford to renovate or improve their properties.

The group point out that the money spent on maintenance, improvements and rates goes back into the local community – and this amounts to over $100m per year.

According to the survey, holiday rental owners on average spend $2,500 a year on rates; $3,113 a year on maintenance; and have spent $30,587 in the past 5 years on improvements and renovations. “Holiday rental maintains and improves the housing stock in many remote regions – and supports local trades people,” explains Bachcare founder and general manager Leslie Preston. “In addition to this there is the direct benefit of the domestic tourism spend – which we haven’t attempted to quantify in this survey”.

The survey also examined current compliance levels in fire, health and safety regulations.

Preston explains that one of the ‘level playing field’ arguments put forward by MANZ is that baches and holiday homes do not have to meet the fire, health and safety requirements that motels do. Preston says, “This is simply nonsense since houses are houses not motels. A holiday home needs to meet the standards as they relate to a house.” 90% of respondents said their properties had smoke detectors within 3 metres of entrances to sleeping areas – which was the current building requirement.

The group concludes that while the Kiwi dream of owning a piece of paradise is alive and well, it is at risk from over-regulation. Holiday rentals are valuable to local economies.

Unless renting out a holiday house remains an economically viable option, fewer Kiwis will be able to support owning a bach – and be forced to sell. The group says this would put downward pressure on house prices in an already depressed market with less demand if new purchases are unable to rent.

Summary of key survey results

The survey was sent to the holiday rental owners listed on Bookabach and Trade Me’s Holiday Houses and managed by Bachcare and received 2,047 responses.

1) About the properties and economics of Holiday Rental and holiday rental ownership:

– The median property was a $440,000, 3-bedroom free-standing bach or holiday
home accommodating 7 people.

– 58% of properties were owned individually or by groups of owners. 31% were
owned in a family trust.

– An average of $2,505 per year was spent on rates and $3,113 on property

– Owners had invested on average $30,587 on improvements and renovations in the
past five years with exterior and interior painting being the most common, followed

by re-carpeting, a new bathroom, adding a deck, new kitchen and adding a heat-
pump or central heating and insulation.

2) Fire, health and safety:

– Holiday rentals had an incident rate of 0.015% incidents a night. There were 126 recorded accidents or incidents reported by guests staying in properties over the past 5 years out of a total of approx 850,000 nights stay.

– 90% of properties had smoke alarms within 3 metres of every doorway to a sleeping area

– 51% of owner checked smoke alarms every 3 to 6 months, 27% every year and 14%
every visit.

– 75% of owners agreed (55% strongly) that they saw themselves as part of the wider tourism industry.

– 69% of respondents were not familiar with the work performed by their Regional Tourism Organisation (RTO).

– 73% didn’t feel they benefited from the work of their local RTO.

– Only 10% of owners felt they should contribute to RTO funding above and beyond

owners of non-holiday rental properties.

– 82% agreed (67% strongly) that if they had to go through a formal resource consent process they would re-think renting out their holiday home.



The New Zealand Automobile Association has sold its stake in online holiday home booking site Bookabach to HomeAway, a global vacation rental home company based Austin, Texas.


The deal includes Bookastay, an Australian affiliate, HomeAway said in a statement. Terms of the all-cash deal weren’t disclosed though the US company said it would discuss the transaction on a conference call for its third-quarter earnings later today.

Bookabach was a 50-50 joint venture between the AA and the website’s founders. AA sold its entire share and the founders, including company manager Peter Miles, sold about 5 percent. HomeAway has the option to buy more shares in coming years.

Miles, who will stay on to run the company, said joining the HomeAway network would enable Bookabach “to take New Zealand bach and holiday home listings to a truly global audience.”

“It sets up Bookabach with the strongest possible channel for relevant in-bound tourism,” he said in a separate statement.

The two websites have more than 8,000 property listings in New Zealand, Australia and the Pacific islands.

Nasdaq-listed HomeAway was down 3.4 percent to US$28.71 and has gained about 30 percent this year.

“The partnership strengthens HomeAway’s presence in Australia and New Zealand, as each country is the leading provider of foreign tourists to the other,” said HomeAway chief executive Brian Sharples. “It also broadens HomeAway’s reach within the Asia Pacific market, providing highly appealing accommodation options to travellers globally.”

The statement helpfully explains that the term bach is kiwi lingo for a modest holiday home or beach house. Bookabach was founded in 2000. The business will continue to be run by co-founder Peter Miles from its Auckland headquarters.

The AA acquired a holding in 2007.

“Our joint venture has achieved growth and been successful, but it’s time for the company to take the next step,” AA general manager club operations Peter Moxon said.

Serviced apartment operator Quest has expanded by 28% in the past two years and is now the fastest growing player globally, according to a new report.

Quest’s expansion comes as the serviced apartment sector continues to expand in Australia and New Zealand with a 14.5% increase in supply since 2011.

“Australian serviced apartments are in high demand and short supply; a trend that shows no sign of slowing,” notes the UK-based Travel Intelligence Network, authors of the Global Serviced Apartments Industry Report 2013/14.

Quest is now second only to Mantra in terms of serviced apartment room numbers.

Mantra offers 13,600 rooms in 150 locations spread across Australia and New Zealand with Quest offering 6,786 rooms across 120 locations.
serviced_apartments Australia
The other major operators in what is a very fragmented market are Oak Apartments and Mercure (owned by Accor), which both offer more than 4,000 serviced apartments and Harry Triguboff’s Meriton Group (2,674 apartments), which has plans to expand this side of its business.

The biggest operator globally is the Marriott group through its Residence Inn serviced apartment business, which operates more than 90,000 apartments in the US and Canada.

Quest chairman and founder Paul Constantinou attributes the growth in Australia to the country becoming de-centralised; “former regional towns are now regional cities, and the lack of accommodation in these areas is being addressed by serviced apartments rather than mainstream hotels”.

“Although Australia has major international centres, the hotel chains tend to be concentrated in the main cities,” he says.

Constantinou says the sector is being driven by demand from the extended stay market, where demand has grown by 30% due to companies expanding and more consultants finding themselves on the road to service their customers.

The report also quotes research by Atchison Consultants which forecasts the Australian serviced apartments sector to outperform the hotel sector over the next three years

Atchison Consultants forecasts investor returns of between 13% and 15% per annum compared to 10% and 11% for hotels and also estimates – on the back of a 10% rise in business travellers to Australian in 2011 – that business travellers account for 50% of guests who stay in serviced apartments, attracted by the lower costs compared to hotels.

A separate report by Jones Lang LaSalle (JLL) Hotels found that of the 3,712 hotel rooms under construction in September 2012, a third were serviced apartments – though JLL warns that serviced apartments will have to show a positive yield for at least three years to tempt back investors.
According to the global 2013 report, this is already happening with the sector is attracting new investors and is benefiting from increasing numbers of business travellers to Australia.

The report says serviced apartment rental rates in Australia and New Zealand are the most expensive in the Asia Pacific region, ranging from $110 to $200 per night for a studio apartment to $180 to $275 for a two-bedroom apartment.

Quest is currently selling investments in its Quest Rockhampton development offering rental returns of 6.5%, increasing by 4% per annum.

In May, Quest listed its Sydney Olympic Park apartment hotel for sale seeking around $39 million as it looks to free up cash to fund the development of more than a dozen new serviced apartment projects and tap into growing investor demand for Australian hotels and serviced apartments, particularly from Asian investors.

Australia’s serviced apartment sector dates back to the 1970s, but the real growth spurt occurred in the build-up to the Sydney Olympics with the number of establishments with 15 rooms or more growing from 479 in 1998 to 973 by March 2011.

It ranked as seventh biggest apartment globally in 2011-12, up from 10 in an earlier survey.

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Business accommodation group Quest Serviced Apartments has launched studio-style apartment offerings in some of its Melbourne and Sydney properties.

The new brand offers hotel-style rooms with a kitchenette, work area and free Wi-Fi.

Quest company research found likely demand from its extended stay business travellers.

The apartments are in Bondi Junction in Sydney and Brighton, East Melbourne, Kew and Hawthorn in Melbourne. A sixth property in the Melbourne suburb of Frankston will be released in early 2013.
“Whilst most of our guests still prefer an apartment with a separate bedroom and living area, we wanted to provide a dedicated offering to those who would rather stay in a hotel-style room – but who don’t want to sacrifice all of the other apartment facilities,” says Quest’s Paul Constantinou.

Quest has properties in more than 140 locations across Australia, New Zealand and Fiji.

The company opened eight new properties this financial year in Australia and four in New Zealand.

In Adelaide, Kyren Group is halfway through building a mixed-use development at 70 Franklin Street.

The development includes 131 serviced apartments plus 20,000 square metres of office space and 700 square metres of retail.

Colliers’ Nicholas Shinnick says the decision to include a residential component comes as Adelaide faces high occupancy rates for short-term apartments.

The company recently won the Innovators Award at the Australia New Zealand Pacific Hotel Investment Conference for its role in driving the sustainable growth of the serviced apartments market.

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