White-water rafting at Okere Falls near Rotorua. Photo / Christine Cornege
A proposal to merge all of Rotorua’s commercial rafting operators is before the Commerce Commission.
The application has the backing of Rotorua Lakes Council’s tourism arm, RotoruaNZ, but the commission is examining whether the deal could reduce competition.
Rafting JV Co, a newly formed joint venture, would combine the assets of Rotorua Rafting, Kaitiaki Adventures and Kaituna Cascades.
Rotorua Rafting has also agreed to the takeover of another operator, River Rats, meaning the three businesses would represent all guided commercial rafting and sledging operations in Rotorua. Sledging is a solo, board-based whitewater activity.
The operations include trips on one of the world’s most renowned rafting rivers, the Kaituna, as well as the Rangitāiki River and seasonal runs on the Wairoa River.
Rotorua Rafting’s Sam Sutton said the number of commercial rafting operators in Rotorua had steadily declined.
“Twenty years ago there were seven or eight operators,” he said. “Now there are three.”
Sutton said running a high-risk adventure activity as a small owner-operator had become increasingly complex.
“You need a lot more layers underneath you now, particularly around health and safety.”
He said rising Department of Conservation concession fees were a key pressure, noting the standard 7.5% charge on gross revenue could represent a significant share of operators’ net profit.
“It’s a good system in that the money stays in local scenic reserves, but it’s still a big hit.”
Sutton also pointed to weather-related disruption, saying extended river closures in recent years had made standalone operations financially vulnerable.
“This isn’t about putting prices up,” he said. “Rafting isn’t a necessity. If it becomes too expensive, people just won’t come, they’ll do something else.”
Sutton said the scrutiny of the proposal felt disproportionate given the scale of the industry involved.
“We’re talking about three small rafting companies, while supermarkets, fuel and building prices are what actually put pressure on New Zealanders,” he said.
The application was lodged in November, and the commission initially scheduled a decision for late January. That timeline has since been extended.
“At present, the information before us does not allow clearance to be granted,” said Vanessa Horne, the commission’s general manager of competition, fair trading and credit.
As the threshold for clearance has not been met, the commission will publish a Statement of Issues online, inviting submissions from other parties on the proposed merger.
Under the Commerce Act, the merger can only be approved if the regulator is satisfied it is unlikely to substantially lessen competition in any relevant market.
In a preliminary Statement of Issues document, the commission identified several potential competition concerns requiring further scrutiny. This included the risk of higher prices, reduced service quality, fewer choices for consumers and barriers to new entrants.
Rafting JV Co maintained the merger is necessary to manage rising Department of Conservation concession fees – potentially an increase of 500% – and climate change pressures.
Efficient use of assets, cost savings, improved river experiences, enhanced safety, stronger adherence to tikanga Māori, greater financial resilience to climate impacts and the potential establishment of a dedicated rafting guide school were listed as other benefits of the merger.
The group argued rafting operates within Rotorua’s broader adventure tourism market, alongside activities like ziplining, mountain biking and geothermal attractions, and should not be assessed as a standalone market.
The would-be consortium has received support from RotoruaNZ, the council-controlled organisation responsible for promoting the district’s tourism sector.
RotoruaNZ chief executive Andrew Wilson said the “proactive and collaborative” merger could help ensure “the long-term sustainability of the rafting sector” and provide an opportunity to “preserve and enhance a cornerstone” of Rotorua’s adventure tourism market.
Tourism Industry Aotearoa’s general manager of membership and advocacy, Greg Thomas, said he did not believe the merger would “substantially lessen competition” across Rotorua’s wider tourism market.
“Rotorua’s adventure tourism sector remains highly competitive, with numerous alternative activities available to both domestic and international visitors,” Thomas said.
Richie Pepene, director of operations at tour operator Contiki, also supported the “positive and pragmatic” proposal.
Submissions on the proposal will be published on the Commission’s online case register.
A decision is due by April 14.
Mathew Nash is a Local Democracy Reporting journalist based at the Rotorua Daily Post. He has previously written for SunLive, been a regular contributor to RNZ and was a football reporter in the UK for eight years.
- LDR is local body journalism co-funded by RNZ and NZ On Air.