How luxury lodge Wharekauhau Country Estate kept going during lockdown

One of New Zealand’s most luxurious lodges halved room rates and redeployed staff to vineyards owned by an associated NZX listed business during the national lockdown.

Richard Rooney, general manager of South Wairarapa’s Wharekauhau Country Estate, told how covid and the alert level 4 sank lodge bookings earlier this year so an alternative plan was swung into action to save staff jobs.

“I really want to emphasise that we managed to keep all our staff. Not only that but we actually hired more people as domestic demand outstripped our expectations,” Rooney said.

As autumn dawned, grapes were on the vines at properties owned nearby by NZX-listed Foley Wines, he said, the company founded by American billionaire Bill Foley.

Extra pickers were desperately needed for the harvest.

“One of Bill Foley’s mantras is ‘always advance, never retreat’, and I think despite the exceptionally tough tourism climate we have absolutely nailed that,” Rooney said.

So some staff left the quiet lodge and – classed as essential service workers – they picked those berries at the busy Te Kairanga and Martinborough Vineyard to ease the pressure.
“With a strict lockdown, we were unable to have any staff at the lodge so this was the perfect way to keep the team employed and work within our wider-ownership ability.” he said.

Lodge staff have also helped out pruning in the vineyards near Martinborough.

The listed business said that during alert level 4 and working under strict conditions, the harvest was able to take place.

Bill Foley is the company’s chairman, majority shareholder and owns the lodge, which also buys Foley Wines’ products, including Lighthouse Gin and serves those products to guests in rooms and the restaurant.

Wharekauhau received the Government wage subsidy of $158,000 for 23 staff, initially than a further $103,000 for 24 staff.

The Herald reported in June how hotel room revenue throughout New Zealand dropped by 84 per cent in April and May, when the sector lost $185m and thousands of jobs.

The NZ Hotel Owners Association said the economic impact of Covid-19 on the hotel sector was severe, and the pandemic was expected to have a profound impact on global tourism for up to five years.

Executive director Amy Robens said members had made mass redundancies and up to 80 per cent of the 10,000 people employed nationally had lost their jobs.

Rooney said that to draw visitors to the lodge where royals Kate and William stayed during 2014, rates were dropped by around 35 per cent for a short time to build occupancy and awareness.

Operating hours were also cut from seven days a week to five: Thursdays to Mondays, focusing on weekends when Kiwis could get away to the remote spot 90 minutes from Wellington.

So instead of a waterfront storm cottage commanding $1668/night per couple during the winter/spring seasons, that dropped to $995/night per couple for a few weeks during its quietest period.

“We took the gamble to pull back on the rates that much and for the second and third quarters it worked. Bookings recovered. We had to run at 100 per cent occupancy to make that work,” he said.

By the end of September, domestic tourism was recovering as the domestic market took advantage of exploring their own backyard and rates returned to normal.

In December, one of its busier periods, storm cottages will be $3500/night per couple.

“Weekends are now near fully booked. We have 100 per cent occupancy and strong demand is continuing,” Rooney said.

He worked with Foley Wines’ chief executive Mark Turnbull to develop the staff/room rate plan, meaning the lodge had not suffered the same fate of some others – having to close due to Covid, and to ensure all staff kept their jobs.

“Our staff are at our absolute core and we need to navigate the good times with the bad. It is personally one of the proudest achievements in my 15 years here to have ensured we brought the whole team on this tough journey – a good reminder that ‘family’ matters,” Rooney said.

But for the first time in Rooney’s time at the estate, the lodge will shut from December 21 to January 3, partly to save staff wage bills.

“The traditional New Zealand mindset at Christmas moves to beaches, baches and families. It’s the first time we’ll be shut at Christmas but we think that’s the right thing to do and it will give the team time with their own families,” Rooney said.

Rooney also acknowledged major changes to the lodge, which has been significantly expanded in the past few years on the back of growth in luxury tourism.

Photos from 2014 show a much smaller lodge building with only four chimneys whereas pictures this year show the main building with about 10 chimneys. The lodge front appears quite different and is now more French chateau/Cape Cod style.

Rooney also acknowledged millions had been spent there in the past few years. The entire lodge was re-roofed with cedar shingles, imported from Canada, he said.

“Even in the face of a tough tourism climate, significant development continued,” he said.

The swimming pool was also replaced with a new in-ground fibreglass structure and around $200,000 was spent on that complex.

Two years ago, a new gym was built alongside the pool area. Some cottage bathrooms have also been refurbished. Around $400,000 was spent on that.

Since 2014, three new “wetland” cottages were built and furnished for about $2.5m. This money was spent with local company Holmes Construction, which is also building the new Foley Wines’ development at Te Kairanga Wines, Martinborough.

“The business has increased tenfold since 2014. By adding cottages, we’ve added capacity. The total property experience builds occupancy.”

But there is no current appetite for more new cottages because existing dining and lodge facilities cater comfortably for the maximum of 32 guests in the existing 16 cottages.

Around 80 per cent of guests are now coming from Auckland, Wellington and Christchurch with the rest from regional areas.

On the outlook for next year, Rooney said: “We have a chance to reset a few things and with the hard work this year a great domestic base to rebuild upon, and we would anticipate some form of safe international travel to recommence in staggered tiers over 2021.

“New Zealand has become a rockstar on the global tourism stage, and the desire to get into wide-open spaces, and genuine experiences absolutely resonates with the international premium tourism sector,” he said.

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