White Heron Motor Lodge set to soar

The lease for the popular White Heron Motor Lodge in Gisborne is for sale and Bayleys agents say enquiry levels are encouraging – a reflection of the tangible opportunities that this business offers to an astute operator.

With an asking price of $880,000 plus gst if any, the term of the standard motel lease was recently extended to 30 September, 2034 but after 16 years as working moteliers, the current holders of the lease are now looking to exit Gisborne to be closer to their children.

Karen Raureti and Colin McNab of Bayleys Gisborne say the Motor Lodge in Gladstone Road - the main arterial route into the city - has, for the last four years, been operating under management.

“The real opportunity now exists for savvy motel owner/operators to pick up the reins and take a hands-on approach to elevate the already successful business to a new level,” says Mr McNab.

“The motor lodge has 24 units giving an operator economies-of-scale to allow the option of contracting staff and relieving management in order to maintain a lifestyle.

“The 2010 financial accounts for the business show continued strong comparable trading and occupancy levels. However, an owner-operator model of business management could clearly improve the bottom line as costs can be substantially reduced. Staff costs and maintenance work that is presently contracted out can be brought back ‘in house’, for example.”

Built in late 1994, the single level White Heron Motor Lodge is set on a generous 3036sq m site with excellent profile to busy Gladstone Road and good accessibility. The building configuration provides a U-shaped access/egress area with well-established plantings, cobblestone paving and lawns. The manager’s residence and motel reception/service areas are located to the front and centre of the site with an L-shaped accommodation building to the western and southern boundaries and a further five units on the eastern boundary.

The units provide an accommodation mix of 17 studios, plus four one-bedroom and three, two-bedroom units. A three-bedroom manager’s residence has an adjoining, reception/office area, commercial kitchen, motel laundry with commercial washers and dryers, storage area plus a separately accessed staff room, guest laundry and store room.

The units have proved popular with families, commercial travellers, sports and conference groups and travellers. The larger of the two, two-bedroom units is often utilised as a compact conference facility or training room adding another dimension to the business.

“Gisborne has always enjoyed good accommodation trade from company reps in particular as it’s not a city that you just pass through if you are on business. Reps come here with intent and are obliged to stay out of travelling convenience,” says Ms Raureti.

The units are all well-presented but there are funds put aside in a maintenance account for a new owner to refurbish the interiors should they feel it necessary. The exterior of the buildings were recently repainted and will require only modest upkeep over coming years.

The property holds a liquor licence to allow in-room mini bars and to cater for on-site conferences.

With the current owners planning to remain in Gisborne for the short-term and with vast motel experience to draw on, they will be on hand to offer assistance to a new owner to ease the settling in process.

“A hard-working couple could create efficiencies in this business that can only come when there is a vested interest in the operation. The opportunities for growing the business and for carving out a solid income and lifestyle are just waiting for forward-thinking new owners,” says Ms Raureti.

The Gisborne region has a number of large events planned over the next couple of years which will boost the visitor numbers for hospitality and accommodation operators.

“Gisborne will be hosting Namibia during the 2011 Rugby World Cup and with the French team playing in Napier it is hoped that Gisborne will be on the travel itinerary of many supporters spending time on the East Coast,” says Mr McNab.

The Te Matatini National Kapa Haka Festival will be held in Gisborne in February 2011 after a busy January thanks to the general summer influx of holidaymakers and the increasingly-popular Rhythm and Vines festival.

“Motel owners can take heart from the popular and well-promoted events planned in the near future. Plus, with construction now underway on the new Ryman-owned retirement complex to accommodate over 300 residents, it can be expected that family-friendly visitor accommodation such as that offered by the White Heron will continue to be in demand.”

Another potential bonus for Gisborne’s business sector in general is the proposed Hikurangi Forest Farms timber mill which will pump dollars into the local economy and bolster the population.

“There will be positive spin-offs for the accommodation sector with set-up staff likely to need accommodating, for example,” says Mr McNab.