Coronet Peak Hotel for sale

A pioneering hotel which in its heyday set the standards for accommodation providers in the Queenstown Basin has been placed on the market for sale by the mortgagee.

The landmark Coronet Peak Hotel in Arthurs Point at the base of the Coronet Peak ski field some six kilometres north-east of Queenstown, was built in 1985 and was one of the first hotels in the region to locate out of the town’s CBD area. Nugget Point straight across the road followed suit soon after.

However, following several years of tough trading conditions through the global economic crisis, the three-star hotel has been put up for sale through a mortgagee process, with tenders closing on July 20.

The property is being sold by Bayleys Queenstown. Bayleys sales person Buzz Scown said the hotel and land– along with an adjoining section leased to Rock Gas – had a combined capital valuation of $6.8million.

“Coronet Peak Hotel has 78 rooms, supported by an in-house restaurant and bar, management offices, fully functional commercial-grade kitchen, commercial laundry services, sauna and spa facility, outdoor swimming pool, and an on-site two-bedroom manager’s accommodation,” Mr Scown said.

“The 5600 square metre building also houses Queenstown’s only commercial bowling alley – complete with its own bar. The hotel was built around 1985 and is based on a European alpine design using local schist stone and weatherboard construction. The original west wing began trading with 24 rooms, while the two level, 54-room east wing extension was added in 1994.”

Mr Scown said the décor and fittings within the hard-working Coronet Peak Hotel were fairly ‘tired’, and a degree of investment would be needed to restore the premises to its former glory, and subsequently raise room yields.

He said the guest rooms were typical of the 1980s – featuring configurations of between one and three beds, tea and coffee making amenities, and ensuite bathrooms with built-in showers over the bath tubs.

“The tourism sector, as with most parts of the domestic economy, has been ‘doing it tough’ over the past few years, so operational budgets within the property have been funnelled into underpinning frontline services rather than in structural maintenance,” Mr Scown explained.

“Coronet Peak Hotel has also suffered from a lack of marketing to international visitor markets. Korea for example had previously delivered substantial in-bound tourist numbers, but this market fell away at the beginning of the recession and has never really been rebuilt.

“This fall-off in foreign-booked room nights, combined with the deferred maintenance issues, have seen overall booking numbers steadily dwindle. However, this is where the opportunity arises for a new owner to capitalise on and reinvigorate an underperforming business.

“We have already been speaking to current hospitality operators who have indicated that the geographic location of the hotel would lean any refurbishment of the food and beverage facilities toward the likes of a Monteith’s style bar - encapsulating the gold mining or skiing heritage of this area,” Mr Scown said.

“Alternatively, others with considerable accommodation experience say it could also be refurbished to replicate a hunting lodge style décor… with the likes of hunting trophies on the walls and deep leather seating. With two large open fires already heating the bar and restaurant areas, this is certainly viable too.”

Coronet Peak Hotel lies at the edge of the Arthur’s Point residential community of approximately 600 people, and has one of only two licensed food and beverage operations in the town

“The ‘locals’ market has been pretty much ignored,” Mr Scown said.

“Their nearest real pub or bar is in Queenstown, so there is substantial demand for something within walking distance – particularly in summer. This seasonal differentiation would work well with the winter target audience coming down off Coronet Peak after a days skiing and looking for somewhere warm and inviting.”

Some 2105 square metres of land at the edge of the resort is leased to Rock Gas Ltd which runs a liquid petroleum gas storage facility on the site. The lease generates annual rent of $17,500 – with rights of renewal taking the lease length out to 2025.

Mr Scown said the marketing and operation of the hotel’s bowling alley had also been neglected over recent years. At one point, the seven lanes were home to Queenstown’s bowling league several nights a week.

“The infrastructure for the bowling business is intact, but like the rest of the property, the ancillary services needs upgrading. What currently is a children’s games area could easily be reconfigured to house a retail operation with a definite tourist target market, while the bar area could similarly be refurbished to better reflect the atmosphere of an alpine hotel,” he said.

“There are multiple revenue streams which could be developed to sustain Coronet Peak Hotel into a viable operation once again. However, its future is dependant on three factors – investment, imagination, and marketing expertise.”