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NZ Refurbished airport hub motel placed to tap burgeoning market

Property Here - Sunday, July 14, 2013

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A recently refurbished motel developed to be close to Auckland International Airport has been placed on the market for sale as part of Bayleys' latest Total Property portfolio.

The Auckland Airport Kiwi Motel, about five kilometres from the airport is two years old in its new format and features 32 new studio and family units situated on freehold land at 144 McKenzie Rd Mangere Bridge.

"The motel is the sister property to the neighbouring Kiwi International Hotel," says Paul Dixon, Bayleys tourism and hospitality division manager who is marketing the Auckland Airport Kiwi Motel's land, buildings and business for sale as one package through expressions of interest.

Accommodation classes within the property consist of eight executive family rooms with two bedrooms, five premier studio rooms of 38 square metres in size, four double room units, and 13 classic studio rooms which have their own kitchenette and bathroom. Advertised nightly rates range from $79 per night for a classic studio room up to $149 per night for the executive room option.

The Auckland Airport Kiwi Motel business sits across three land titles.

Two of the titles combine to make up 7062 square metres, with the business having a half share of an additional 5543 square metres.

The business employs five full time staff - including three housekeeping personnel, and two in office administration. The refurbishment and modernisation of the rooms was undertaken in 2011. Existing guest amenities at the property include complementary breakfasts, free 14 day car parking, and free airport pick up and drop off.

Dixon says the business has the potential to grow both domestic and international traffic - each with a different set of dynamics. "Domestically, the motel's marketing plan has segmented out the leisure and corporate sectors. Leisure travelers have been identified as those guests from regional New Zealand centres who are either catching onward flights out of Auckland first thing in the morning, or terminating their international flights in Auckland and staying the night before catching an internal flight the following day."

"Corporate sector marketing has focused on delivering accommodation services as part of activities taking place within the conference and meeting facilities at the adjoining hotel property. With both businesses being complementary rather than competing, there is the potential for this arrangement to continue with the new owners of the motel."

Over the past financial year the property had an average occupancy rate of more than 90 per cent - well ahead of the industry average for Auckland.

Dixon says that over the past decade, Auckland has replicated a global trend of developing intense accommodation hubs in the peripheral areas around major airports.

"From a domestic perspective, airport hubbing enables corporates with a national presence to hold one or two-day 'fly in/fly out' conferences for their management teams. Delegates catch the first flight into Auckland from virtually anywhere in the country, participate in the day's business, have one night at the venue hosting the conference, do the second day's business, then fly out. It is all conducted with minimal down time having to avoid travelling into the city.

"This cuts down on the need for transport from the airport to and from the city. The Auckland Airport Kiwi Motel is at the smaller end of the scale of accommodation providers in the Auckland airport precinct and uses this boutique feel as part of its marketing thrust.

"Some domestic guests want a less corporate feel to their stay, and consequently shy away from the bigger chains."

Dixon says with Auckland International Airport forecasting sustained growth, the Auckland Airport Kiwi Motel is well positioned to benefit from the increased patronage across a range of visitor sectors.

Last year Auckland International Airport released details of its newest business growth strategy - entitled the AMBITION 2020 initiative - with plans to grow visitor arrivals to four million with much of this growth coming from the Asian region encompassing China, Japan, Indonesia, India and Taiwan.

"There is the potential for any new owner/operator of Auckland Airport Kiwi Motel to negotiate with in-bound tourism operators out of Asia for the provision of cost-competitive accommodation," he says.