Business news editor of the New Zealand Herald

Holidaying at $400,000 a week

Otahuna Lodge in Christchurch is almost ready to reopen after repairs to earthquake damage. Photo / Supplied
Otahuna Lodge in Christchurch is almost ready to reopen after repairs to earthquake damage. Photo / Supplied

As the warrior-laden waka approached the birthday party the watching billionaire Russian tourist asked Jean-Michel Jefferson for a Kalashnikov - it was a new request for the luxury tour operator.

Jefferson, founder of Central Otago-based tourism company Ahipara Luxury Travel, had organised the 50th birthday party for the Russian oligarch who was used to bomb-proof cars and bodyguards.

"He had nothing there except his Speedos and he turned to me and said Jean-Michel have you got a machine gun ... he was serious," Jefferson says. "I said relax, it's okay."

A powhiri was held and birthday gifts presented including a cloak worn by the Maori queen, a taiaha made by a master carver and a greenstone mere.

Ahipara hired a private island for the birthday bash, including a spa service and diving, with the captured crayfish cooked by a top chef.

"That's one example of one day out of one itinerary," Jefferson says. "We've never done the same itinerary twice."

Swiss clients of Ahipara wanted to understand the country and so the first thing they did was fly around for 10 days by helicopter, dropping into various lodges.

"The unfortunate thing about a helicopter is it makes you really work as a guide for your money," he says.

"Because you can be sitting on the beach and 10 minutes later they want to be somewhere else and you've got to get your phone working and be that somewhere else."

The next time his Swiss clients returned they homed in on the Wairarapa and the company introduced them to movers and shakers in the area.

"So when they actually came in they already came in to an established network which we helped set up," he says. "So it goes really beyond tourism."

Jefferson was a management consultant and corporate financier for Price Waterhouse, has a degree in Russian and led that company's aviation group in Moscow.

Luxury travel is not just about sightseeing in style.

"When these guys come over they don't switch their brains off and they keep their eyes open and they have got lovely networks back home," Jefferson says.

Visitors fall in love with New Zealand and then start talking about business.

"It's where tourism meets real life for people with plenty of money ... it basically becomes a service rather than a packaged product."

Luxury holidays organised by Ahipara have cost up to $800,000, which included two helicopters every day for 11 people for two weeks.

However, such big spending has become less frequent and the global financial crisis is changing behaviour - even for the super rich.

In the old days luxury travellers made substantial use of helicopters, Jefferson says.

"They wouldn't think twice about taking a helicopter from one end of the country to another and racking up 50 grand's worth of helicopter time.

"That's changed, [they're] not doing that any more, the helicopter trips tend to be smaller and circular."

There is a debate in the industry about where luxury travel is heading.

"And everyone seems to agree that it's heading towards value for money and experiences."

The luxury sector was hit immediately by the global financial crisis and two years ago Ahipara's revenue was slashed by about half, but since then the company has bounced back, with last year being its best and this season looking good.

"That was because people cancelled their travelling plans immediately because they were trying to work out where the world was going," he says. "They still had plenty of money but they had to manage their portfolios."

Some of the drop in luxury travel was because of how it looked.

"They didn't want to be seen to be spending when other people were falling over."

The impact affected the American market two years ago, which rebounded last year but this year it had dropped away, he says.

"This year it's gone, big time," he says. "I think it might be they're worrying again about what's happening to the world."

Jefferson says he has built up strength in many markets to develop stability and Russia will account for more than half of business this year.

The luxury sector was strong, he says.

"I think it's getting stronger, I think it's getting more resilient and I think it's getting deeper but what we'll find is the people who are adding less value will find it more difficult," he says.

"You've got to add a fair bit of value in order to survive in this new world and I don't see it changing, I don't see us going back to the old ways of ostentatiousness."

It is a different style of tourism which is not necessarily only for the super rich, he says.

"People who have got much less budget can also do some special things, like we've taken people in Waitomo Caves after they've closed."

Otahuna Lodge near Christchurch was damaged by this year's earthquake and owner Hall Cannon had to close the 115-year old manor house.

The lodge plans to reopen on January 10 and since September 6 there have been 40 to 50 people on site each day rebuilding the lodge, including plastering 200 walls.

"It's been an extraordinary undertaking," Cannon says.

He has seen newer markets come more into play.

"Historically lodges in New Zealand have seen their two largest markets being the US and the UK," he says.

"In recent years, probably for about the past 18 months, we've really seen that transition to, at least for us here at Otahuna, a much stronger Australian market."

Australia accounted for more than 30 per cent of Otahuna's total occupancy throughout the year.

"We in large part attribute that to the fact that as Australians have suffered the effects very little from the global financial crisis, they have been able to seek out luxury destinations here in New Zealand."

Otahuna opened in 2007 and has seven suites, which during the high season range from $1600 to $2100 plus GST a night for two people.

"I don't know that it [global financial crisis] has had a huge change in who the traveller is. I do think that it has made value ever more important than before in terms of what they're looking for," Cannon says.

The issue of value is difficult to overstate.

The lodge was out to provide the best value, with all meals, alcohol, wines, internet and even mountainbikes included in the tariff.

"What we hear so much from that affluent traveller now is, 'I just don't want to feel like I'm being nickel and dimed'."

Cannon says there is concern about the UK market but unlike Jefferson, he sees the American market as strong.

"Each of us [lodges] is independently owned so each of us does see slightly different trends and we'll have slightly different relationships with various in-bounders as well as agents abroad who supply to us."

Guests were looking for ever more customisation, personalisation and help in crafting unique itineraries, he said. "Our guests want to stay completely away from mass market."

- NZ Herald

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