Rationalisation due to Covid-19 has provided an opportunity for family-owned Explore Group to buy Fullers Great Sights' tourism operations in the Bay of Islands.
Explore Group owner and managing director William Goodfellow said his company had been in a very crowded environment with boat trips in the area, and the same went for Fullers, owned by Entrada Travel Group (formerly InterCity Group).
"Covid caused the international market to collapse but it meant that consolidation became a real opportunity for both of us. A silver lining from Covid has now become a reality," he said.
Explore bought the five-boat, seven-bus operation for an undisclosed amount, mainly from existing funds.
"Tourism is not the flavour of the month for lenders," said Goodfellow, who started the business around the America's Cup event in Auckland in 2000.
Explore's purchase encompasses key assets and the Fullers Great Sights brand, notably its Hole in the Rock tours, Cream Trip and 90-Mile Beach coach tours.
"By bringing us together we can be more sensible about the experiences we schedule and more consistent with them. It gives us the ability to manage the peaks and the troughs in this very difficult environment," said Goodfellow.
The absence of international visitors meant add-on experiences were dropped and both companies were fighting for the same market: Kiwis, who make up about 60 per cent of visitors to the region.
"Through Covid we ended up with very similar products ... [boats] were trundling out at the same time with reduced loads. It makes absolute sense to combine them."
Explore took aim at a different Fullers-branded operation in 2015 when it launched ferry services between Auckland and Waiheke Island, but pulled out the following year to concentrate on tourism operations.
During the past 18 years Explore has operated a range of tours in the Bay of Islands, including their Discover the Bay Hole in the Rock Cruise, dolphin viewing cruises and ferry services to Otehei Bay on Urupukapuka Island.
It also runs tours in Auckland and had two vessels running spectator tours during the last America's Cup.
Goodfellow said with New Zealand's traditional reliance on international tourism, it remains a challenging time for all operators.
"We are playing the long game and we believe there is huge potential to grow and enhance the Bay of Islands as a visitor destination. We're excited about what this business acquisition will enable us to do, to continue to support the local community, help bring more visitors to the region and showcase everything the Bay and Northland has to offer."
He said the combined operation would not mean staff cuts, although there would be mixing of workers between the two brands, which will retain their identity.
"We're proposing to keep both schedules going; there's not a major impact on staff."
The new operation would employ between 30 and 100 people depending on the season.
Goodfellow said the next 12 months will be tough, with the transtasman bubble remaining fragile and uncertainty about when visitors from further afield would return.
The current bubble pause had hit this country's skifields hard. "What's to say there won't be more bumps coming in the summer season when we would expect visitors from Australia," he said.
"We don't have massive expectations for anything beyond domestic and some Australians but we would like to think that the following summer there would be some opening up of other international markets."
The return of cruise ship visits would be a big boost for his company. Pre-Covid there were close to 80 ship visits and passengers were very keen to do bus or boat excursions in the Bay of Islands.
Goodfellow said Explore's cruise experiences in the Bay of Islands throughout its peak summer season this year were busier than expected, and it continues to run weekend and long holiday weekend services throughout winter.
"We're very pleased with the increase in domestic visitors but they're spread out - the seasonality is worse but we have spikes on the weekend which is a good thing."
Domestic spending - the numbers
Figures out today show strong domestic electronic card spending.
Ministry of Business, Innovation and Employment data shows domestic tourism electronic card transaction (TECT) spending was up 29 per cent to $11 billion in the year ended May 2021, compared with the previous year.
Domestic card spending was also up 16 per cent on the year ended May 2019. International spending in the year ended May 2021 was down 71 per cent on 2020, to $841m, and 74 per cent down on 2019.
Australian card spending was down by 76 percentage points compared to the year ended May 2021 and 79 percentage points from the year ended May 2019.
All regions showed double-digit growth in domestic spending in the year ended May 2021 compared with the year ended May 2020.
Auckland, with spending of just over $2b, was the only region that didn't show an increase in domestic spending when compared to the year ended May 2019.
West Coast saw the largest increase in domestic spend in the year-ended May 2020, up 62 per cent to $155m. This was followed by Tasman (up 57 per cent to $138m) and Otago (up 51 per cent to $1.2b). These three regions also saw the largest increases in domestic spend when compared to 2019.
When comparing domestic spend in May 2021 to May 2019, Tasman and Marlborough witnessed the largest increase, up 46 per cent. These were followed by the West Coast (up 40 per cent) and Otago (up 31 per cent).
The three regions with the biggest increase in domestic spending, both at the annual and monthly level, also saw some of the largest falls in international spending.
They also had a high reliance on the international tourism market before Covid-19, the ministry said.