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Te Aroha Tourism Precinct Development Feasibility

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Te Aroha Tourism Precinct Development Feasibility & PARTNER CONSULTANTS October 2019 Te Aroha Tourism Precinct Development Feasibility Prepared for Matamata-Piako District Council and Partners INFORMATION Document Reference Te Aroha Tourism Precinct Feasibility Study Authors Craig Jones, Gordon Cessford, Rob McDonald, Lawrence McIlrath, Ana Crawford, Phil Howard and Morné Hugo. Sign off Craig Jones Version Final Feasibility Study Report Date 9/ 10/19 Disclaimer: Information, data and general assumptions used in the compilation of this report have been obtained from sources believed to be reliable. Visitor Solutions Ltd has used this information in good faith and makes no warranties or representations, express or implied, concerning the accuracy or completeness of this information. Interested parties should perform their own investigations, analysis and projections on all issues prior to acting in any way regarding this project. © Visitor Solutions 2019. TE AROHA | TOURISM PRECINCT DEVELOPMENT FEASIBILITY 1 CONSULTANT TEAM Deloitte TE AROHA | TOURISM PRECINCT DEVELOPMENT FEASIBILITY 2 EXECUTIVE SUMMARY In order to stimulate business growth and economic development that improves social cohesion, economic and cultural outcomes for the Te Aroha community, a feasibility study has been commissioned to conceptualise and explore a range of visitor experiences associated with the development of the Te Aroha visitor precinct. The client perceived the existing natural, historical and cultural assets of the Te Aroha Domain, and its surrounds, could be enhanced and developed into a spa resort. Well situated in the Auckland-Hamilton-Tauranga triangle, Te Aroha may leverage and capture some of the emerging tourism business. A consortium led by Visitor Solutions was appointed to undertake a feasibility study to assess these and other tourism opportunities within Te Aroha. The feasibility study concluded: 1. A significant number of tourism opportunities exist in Te Aroha and that many of them have widespread support from sectors of the community, including Mana Whenua. 2. Based on available data the best catalyst opportunity is the development of a new spa facility which operates using the available geothermal resource. 3. The other significant opportunity is the redevelopment of the Te Aroha Domain with initiatives such as a destination playground, interpretation and new croquet lawn in addition to a range of potential private sector initiatives. 4. Improving the Te Aroha main street will also be an important initiative to lift both local pride and improve visitor perceptions of the town. 5. The initiatives will create an environment that fosters private business opportunities. There are several individuals and entities that have expressed a desire to develop a range of new businesses on the back of the catalyst opportunities, especially the proposed spa. 6. A series of spa options have been developed that take into consideration risk mitigation. These options are: • Option A: A new spa development utilising 63m2 of geothermal pool surface water in total (Gross Floor Area, GFA of 1,161 m2) = $13.4 million • Option B: A new spa development utilising 125m2 of geothermal pool surface water in total (GFA of 1,378 m2) = $15.7 million • Option C: A new spa development utilising 125m2 of geothermal pool surface water in total via the use of heat pumps (GFA of 1,378 m2) = $16.2 million 7. Based on the estimated volumes, pricing, costs and capital costs the redevelopment of the spa and pools in Te Aroha are considered financially viable. 8. As a largely fixed cost operation, the financial viability is sensitive to changes in volume and price. 9. Overall, the proposed development (Option B) is likely to deliver positive benefits, even if the anticipated growth does not materialise, or if the project costs are exceeded. 10. Assistance from the Provincial Growth Fund will be sought for 50% of the cost of development of the Spa ($7.2 million to $8.5m) and other significant Domain opportunities including interpretation ($4.5 million) Based on the available data the study recommended that: 1. The project should advance to the next stages of evaluation in a business case process (this should include detailed examination of the financial and commercial case). 2. The project's governance group and Council should continue Mana Whenua and community engagement as part of the business case process. 3. The findings from the feasibility study should be shared with Councillors and MBIE in separate confidential meetings. TE AROHA | TOURISM PRECINCT DEVELOPMENT FEASIBILITY 3 CONTENTS Executive Summary .................................................................................................................... 3 Contents .................................................................................................................................... 4 INTRODUCTION ................................................................................................................. 7 1.1 Report Objectives ............................................................................................................................... 7 1.2 Objectives ........................................................................................................................................... 7 1.3 Methodology....................................................................................................................................... 7 CONTEXT ........................................................................................................................... 9 2.1 Location ............................................................................................................................................... 9 2.2 Mana Whenua History ...................................................................................................................... 10 2.3 Spa History ........................................................................................................................................ 11 2.4 Demographics ................................................................................................................................... 13 COMMUNITY PERSPECTIVES ............................................................................................ 19 3.1 Introduction ...................................................................................................................................... 19 3.2 Mana Whenua Perspectives ............................................................................................................. 19 3.3 Community Perspectives .................................................................................................................. 20 PROPOSED VISITOR EXPERIENCES .................................................................................... 23 4.1 Introduction ...................................................................................................................................... 23 4.2 Identified Constraints / Considerations ............................................................................................ 23 4.3 Proposed Experiences ....................................................................................................................... 23 MARKET ANALYSIS ......................................................................................................... 27 5.1 Introduction ...................................................................................................................................... 27 5.2 Hot Pools and Spa / Wellness Market............................................................................................... 27 5.3 Competitor Analysis.......................................................................................................................... 28 5.4 Existing Spa Visitation ....................................................................................................................... 32 5.5 Wider Traffic and Visitor Flow Analysis ............................................................................................ 33 PROPOSED APPROACH .................................................................................................... 39 6.1 Introduction ...................................................................................................................................... 39 6.2 Core catalyst Spa Development ........................................................................................................ 39 6.3 Core Catalyst Domain Development ................................................................................................. 40 6.4 Main Street Optimisation ................................................................................................................. 40 6.5 Secondary Businesses ....................................................................................................................... 40 TE AROHA | TOURISM PRECINCT DEVELOPMENT FEASIBILITY 4 PRELIMINARY CONCEPT ................................................................................................... 43 7.1 Introduction ...................................................................................................................................... 43 7.2 Precinct Design Philosophy ............................................................................................................... 43 7.3 Heritage Assets ................................................................................................................................
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