YHA New Zealand 2017 Annual Report

Page 1

3-day Whanganui Kayak Journey Image by: Karolyn Julès

Contents Executive Report




Our Hostels




Our Members


Notes to the Summary

Our Markets


Financial Statements


Our People


Auditor’s Report


Our Community


Governance 24

Our Environment


Acknowledgements & Directory


About YHA New Zealand YHA New Zealand is a leading provider of

YHA New Zealand’s mission is:

quality budget accommodation delivered

experiences which enrich people’s understanding of

through 41 hostels across New Zealand. We are a membership-based incorporated society and a registered charitable organisation, operating in New

To deliver quality budget accommodation and travel each other, the environment, and New Zealand

YHA New Zealand is committed to: •

Zealand since 1932.

Live our values of respect, integrity, passion, and excellence

Our affiliation with Hostelling International (HI) maintains

line of People, Planet, and Profit

our status as part of the world’s first and largest budget accommodation network and ensures our members

Focus on sustainability through our triple bottom

Recognise and respect the status of Māori in Aotearoa New Zealand

receive reciprocal benefits world-wide. Our mission is delivered through a balance of YHAmanaged hostels and our independently owned Franchise and Associate partners.

Provide a safe and healthy workplace and hostel experience for all

YHA New Zealand seeks to operate a profitable and sustainable hostel network that:

YHA New Zealand gives equal consideration to our social,

economic, and environmental impact. The Annual Report, therefore, reflects this triple bottom line commitment.

Delivers the best possible experience for guests and staff

Makes smart use of technology

Shows our commitment to the environment

Both DNS and Splendorgel are made from Elemental Chlorine Free pulp sourced from responsible forests, and manufactured by ISO 14001 certified mills. Printed by Spectrum Print.

ISO 14064-1 • certified organisation

Executive Report YHA New Zealand can again celebrate a very successful year, which reflects not only the positive tourism trading environment, but also the ongoing and cumulative impacts of a range of specific operational strategies. International visitor arrivals into Aotearoa New Zealand grew by nearly 10% in the year to 30 June, and total guest nights increased by 4% with the backpacker sector enjoying a 2% increase. The Mark Wells, Chief Executive

YHA network, including our independent operator partners, hosted in excess of 700,000 guest nights over the year, of which 430,000 were in YHA-managed hostels. This was a slight decrease on the previous year due to significant closure periods in each of YHA Queenstown Lakefront, YHA Aoraki Mt Cook, and YHA Auckland City for major refurbishments, as well as disruption to travel, particularly into Wellington, because of the Kaikoura earthquake event. Despite the reduction in inventory, we again achieved significant bed revenue growth, reflecting outstanding occupancy levels and the benefits of dynamic pricing by which we vary our room

John Hammond, National Chair

rates according to demand. Our trading levels reflect the strength of the YHA brand, which is founded on ensuring our guests enjoy a quality YHA experience through the combination of our







hostel facilities and staff commitment to customer service excellence. Nevertheless, achieving a financially sustainable level of performance is an ongoing challenge. Key metrics for the YHA-managed network, which now consists of fourteen hostels (out of a network total of 41), include: •

Bed revenue growth of 3.55% ($489k), which is outstanding given our reduced inventory

Bed yield (average price per sold bed) growth of 4%

Occupancy levels (adjusted for temporary closures) of 83%

Revenue earned per available unit (REVPAU) growth of 3.7% to $31.25 (adjusted)

Positive operating cash flow performance which exceeded budget

Network Adjustments and Development We maintain brand representation through 41 hostels in 37 destinations across New Zealand,




following the signing of a new Associate partner in Kaikoura. The recalibration of the hostel network to achieve the right balance between our own investment of capital and third-party operator partnerships in support of a more sustainable business model, is largely complete. However, there is still an intention to add Mount Maunganui and Dunedin destinations to the network through suitable operator partner relationships. We have continued to make significant investment in maintaining our hostels in support of quality standards – a total of $7.9m was invested over the course of the year. Major refurbishment projects




have been undertaken at YHA Queenstown Lakefront and YHA Auckland City, effectively creating a ‘second life’ for these properties. These are now very high-quality hostels setting a new standard for backpackers in New Zealand. In addition, a range of general work has been undertaken across the network in support of our quality standards and guest expectations, as well as our commitment to environmental sustainability. The development of the Asset Life Cycle Costing Plan provides a comprehensive, long-term view of our hostel asset replacement and refurbishment requirements, and will better inform our future capital planning.


We have also parted with surplus, non-operating property

Banks Peninsula, which is committed to the regeneration

over the year, with the sale of land on Stewart Island, our

of native bush and bird-life.

property in Kaikoura, and a contract for sale in place for Greymouth. It is anticipated that our one remaining ‘surplus’ property (Te Aroha) will form part of a Treaty of Waitangi Settlement over coming months. At the time of writing, the Board is also undertaking a review of YHA Opoutere.

We have also completed a solar installation in YHA Aoraki Mt Cook to add to those in YHA Wellington and YHA Franz Josef, and will continue with solar conversions as opportunities arise.

A really exciting development is the commitment to a

Infrastructure and Staff

new hostel in Lake Tekapo, which is now confirmed. This

During the year:

requires an investment of up to $9.8m and will deliver an attractive, two-level design in the heart of Tekapo

We implemented a new financial management

consisting of 120 beds and a licensed café. The inclusion

information system (FMIS) which better meets

of the café expands our operating model into food

our future requirements and has also improved

and beverage, and will ensure a significant additional

operational efficiency

revenue stream. This investment decision recognises the

We have started the process of redeveloping our

emergence of Lake Tekapo as a destination in its own right

website, which is a significant but important investment

through the development of attractions such as Earth and

in our digital and direct channel sales strategy

Sky, while remaining an ideal stopping point on the main route south. The expected completion date is August 2018.

We continued to invest in our staff through the further development of the electronic Learning


and Development programme and through the

New Zealand continues to be our single largest market.

Service IQ. This partnership complements our on-

We have achieved significant success in targeting the

the-job training with unit standards towards a formal

group and education segments, which support our

tourism qualification

occupancy levels outside the peak summer season.

development of a partnership relationship through

Once again, our annual staff survey confirmed high

There has been limited change to our international

levels of staff engagement and positive progress

markets – Germany remains the largest ahead of the

towards the goal of ensuring a great employee

UK, while China and Australia continue to sit alongside

experience of YHA. It is gratifying to work with a

each other. While we did experience some decline in the

hugely committed team of people who, in many ways,

Chinese market on the previous year, this did not impact

replicate our long-term members’ passion for YHA

YHA as much as it did other accommodation operators. There is also a sense that our occupancy levels, and therefore the limited availability of inventory, contributed to this outcome.

In conclusion, we celebrate another positive year for YHA New Zealand. We continue to make pleasing progress toward our goal of a sustainable business model, while trading at a level that enables investment into our hostel

Our ongoing marketing investment will continue to

network and business processes. This maintains our

balance the opportunities associated with our emerging

leadership position in the backpacker accommodation

markets, maintaining our traditional markets, and growing

sector. YHA will continue to adapt to commercial and

the level of business derived from off-season groups and

competitive challenges and opportunities, but in so doing,

the education sector.

remain committed to operating in a manner consistent

Our Environmental Commitment We remain committed to responsible tourism and managing environmentally sustainable hostels. A particular

with our long-held values. We therefore anticipate a positive and long-term future in which YHA continues to be more than just a bed to its guests and more than just a job to its staff.

celebration is our directly-managed network, including National Office, becoming the first accommodation network world-wide to be carboNZeroCertTM certified. As part of this programme, we remain committed to measuring, reducing, and off-setting our greenhouse gas emissions. We have chosen to off-set our remaining

Mark Wells

John Hammond

emissions locally by supporting the Hinewai Reserve on

ISO 14064-1 • certified organisation

YHA Annual Report 2017


Above: Exploring Aoraki Mt Cook National Park Above, right: Cape Reinga Right: Queenstown Rafting with Kiwi Discovery


New Zealand’s landscapes are a drawcard for travellers from around the world. Our network connects these travellers to all that New Zealand has to offer and ensures our guests make the most of their adventures.

Above: Skydive Abel Tasman Left: Hot Water Beach with Kiwi Experience Below, left: Snow fights with Kiwi Discovery Below: Exploring with YHA Bay of Islands The Rock Cruise

ISO 14064-1 • certified organisation

YHA Annual Report 2017


Our Hostels The Hostel Network In October, we welcomed YHA Kaikoura, Lazy Shag as a new Associate partner. Whilst visitor numbers to the hostel have unfortunately been impacted by the closure of State Highway 1 following the November earthquake, YHA Kaikoura, Lazy Shag is well positioned to host an increasing number of YHA guests as Kaikoura recovers. The YHA hostel network now comprises 14 YHA-managed hostels, 23 Associate partner hostels and four Franchise hostels, thus bringing the network to a total of 41 hostels. YHA-managed Hostels

Franchise Partners

North Island

North Island

YHA Auckland City

YHA Bay of Islands Paihia

YHA Auckland International

YHA Napier

YHA Opoutere

YHA Taupo, Finlay Jacks

YHA Rotorua

South Island

YHA Arthur’s Pass, Mountain House,

YHA Wellington

YHA Nelson By Accents

YHA Glenorchy, Kinloch Lodge

YHA Christchurch

Associate Partners

YHA Golden Bay, Annie’s Nirvana Lodge

YHA Christchurch, Rolleston House

North Island

YHA Hanmer Springs, Kakapo Lodge

YHA Ahipara Backpackers & Holiday Park

YHA Hokitika, Birdsong Backpackers

YHA Aoraki Mt Cook

YHA Bay of Islands, The Rock Adventure Cruise

YHA Kaikoura, Lazy Shag Backpackers

YHA Queenstown Central

YHA Gisborne

YHA Queenstown Lakefront

YHA National Park Backpackers

YHA Motueka, The Laughing Kiwi

South Island

YHA Franz Josef YHA Lake Tekapo

YHA Te Anau YHA Wanaka

YHA New Plymouth, Sunflower Lodge


YHA Whitianga, On the Beach Backpackers South Island

YHA Oamaru, Red Kettle YHA Picton, The Villa

YHA Ohakune, Station Lodge

YHA Punakaiki, Te Nikau Retreat

YHA Raglan, Solscape Eco Retreat

YHA Springfield, Smylies Accommodation

YHA Waitomo, Juno Hall

YHA Westport, TripInn Hostel

YHA Whanganui, Braemar House

YHA Ahipara

YHA Whangarei Falls Holiday Park

YHA Aoraki Mt Cook

YHA Auckland City

Hostel Development

YHA Queenstown Lakefront

improvements in bed yield at both YHA Queenstown

An exceptionally busy hostel development programme saw

Lakefront and YHA Auckland City, emphatically demonstrate

a number of exciting projects completed during the year.

the value of upgrading our hostels.

Major refurbishment projects included the complete

Qualmark and Hostelling International’s Quality

refurbishment of YHA Auckland City which now positions

Management System, HI-Q, remain the accredited quality

the hostel as one of Auckland’s premier backpacker

management systems in place across our YHA-managed

establishments. This work was complemented by the

hostel network. Qualmark is in the process of migrating

final stage refurbishment of YHA Queenstown Lakefront.

to a new system of assessment using Sustainable

This last stage included the installation of a guest lift, the

Tourism Business Criteria, including health and safety,

addition of six ensuited private rooms, additional shared

environmental, social, and economic factors. All YHA-

bathroom facilities, and the modernisation of all remaining

managed hostels assessed thus far under the new system

hostel bedrooms.

have achieved a Gold Sustainable Tourism Business Award.

An ongoing focus on bathroom refurbishment saw significant upgrades to bathroom facilities at YHA Wanaka,

Enduring Partnerships

YHA Wellington, YHA Aoraki Mt Cook, YHA Queenstown

Congratulations to the following Associate hostels who

Central, and YHA Te Anau.

reached significant milestones during the year.

The installation of guest lockers in all multi-share rooms

15 years

across all YHA-managed hostels was carried out early in

YHA Punakaiki, Te Nikau Retreat

the year in response to strong guest demand.

10 years

An upgrade of hostel insulation and installation of a solar

YHA Ahipara Backpackers & Holiday Park

energy system at YHA Aoraki Mt Cook, and the installation

YHA Oamaru, Red Kettle

of LED bedside lights in all guest bedrooms at YHA Christchurch demonstrate our ongoing commitment to

Looking Forward

environmental sustainability.

Without doubt, the most exciting development project for

Numerous other smaller refurbishment projects carried

the forthcoming year is the construction of a new 120-bed

out to improve guest comfort included the upgrade of

hostel and licensed café in Lake Tekapo. This development

the entranceway decks and installation of shade sails at

positions YHA New Zealand very strongly in a location of

YHA Wanaka, and installation of air flow ventilation units in

growing national and international significance.

guest bedrooms at YHA Franz Josef.

Committing to a project of this size does mean that it will


be a quiet year in terms of other development projects throughout the network. Some further work will be

The online guest review system, ReviewPro, once again

carried out in Auckland and a number of smaller projects

confirmed that YHA-managed hostels continue to rate very

throughout the network have been approved reflecting

highly in comparison to our major competitors. Significantly

our continued focus on upgrading hostels to meet the

improved guest ratings, supported by equally important

needs of our guests and minimise our carbon footprint.

ISO 14064-1 • certified organisation

YHA Annual Report 2017


Our Members International membership has experienced a substantial decline during the past year. Some of this decline is a result of two of our larger hostels being closed for refurbishment which affected front desk sales. We are finding it more difficult to persuade international guests to pay for membership as we face stiff competition from online travel agencies building customer loyalty through their own channels. We are investigating new options for a digital card and wider guest benefits in the next year in an attempt to halt this decline. Domestic membership has also declined but at a slower rate. While the competition of online travel agencies does affect this market, it has a lesser impact overall. YHA New Zealand continues to be engaged in the Hostelling International Membership working group to explore ways to maximise membership on a global basis.

Members - Year to 30 June International

















Member – Board Engagement Member Weekends have transformed. In recent years the Board noticed that fewer members were attending these weekends away. To continue to maximise the opportunities for members and the Board to engage, members have instead been invited to morning tea or lunch with the Board. These have been held in conjunction with a Forum when the Board meets in different locations and have been highly successful. The Board has been delighted by the number of members who have attended, including members they have not met before, and those for whom a whole weekend away is no longer possible.

Service and Merit Awards The following awards were presented at the 2016 AGM in Auckland:


Certificate of Merit Award

Distinguished Service Award

Barbara Pollard for her significant voluntary

Erin Ryan for her exceptional voluntary

contribution to the Auckland Branch

contribution to the Christchurch Branch

presented by Kevin Brewer.

presented by Darren Burden.

Our Markets Overall growth has been strong, however determining specific market growth has been difficult this year due to the combined impact of hostels closing for refurbishment and very high occupancy levels. This means that some markets which appear flat or in decline are the result of hostels in normally strong markets having some beds unavailable, with remaining beds sold out.

and UK markets plateaued; given these declines were

Despite this, we have seen a larger than expected decline

between National Associations.

in the Chinese market. This also was experienced by a number of other businesses operating in the youth segment. We continue to invest in building our presence on Chinese social media platforms, and we work effectively with regional tourism authorities and other industry partners to develop this market in our favour.

small we believe this is related to capacity issues as opposed to market weakness. YHA continues to attract a diverse range of nationalities, which is an important aspect of our mission to connect travellers from around the world. Our top five markets represent nationalities from Europe, Oceania, North America, and Asia. The strength of the international network continues to benefit YHA New Zealand through a wide range of marketing initiatives and the sharing of knowledge

YHA New Zealand is part of a marketing collective with HI USA, HI Canada, and YHA Australia, known as PACRIM. This group aims to share marketing resources in order to stretch our marketing spend further and compete more effectively on the world stage. This activity complements the strong working relationship we have with Hostelling

Domestically, our focus has been to develop and grow

International and individual associations such as those

school group business. This involved a comprehensive

in China, Japan, Taiwan, England and Wales, Ireland, and

research programme to inform both our business systems


and promotional activity. The culmination of this was a TV and digital promotional campaign in January and February. Early results are extremely positive with forward group bookings over 70% ahead of the previous year.

The continued improvement in hostel facilities across the network has elevated our customer reviews, which in turn is helping to drive continued demand. YHA is looking forward to another strong year, bolstered by the

Markets that have shown good growth include USA,

completed refurbishments of both YHA Auckland City and

Korea, Malaysia, Canada, and the Netherlands. European

YHA Queenstown Lakefront.

Where Our Guests Come From North America


United Kingdom


Western Europe



Overseas Groups




23% Australia


New Zealand

NZ Groups



Guest Nationality Data for 2017

ISO 14064-1 • certified organisation

YHA Annual Report 2017


Our People Staff Composition We employed a total of 165 people as at 30 June 2017 with a full time equivalency of 123. We worked a total of 265,263 hours during the year, which is 7,600 hours less than the previous year. This is due to the closure of the previous YHA Kaikoura in May 2016 and also the temporary closures of YHA Auckland City and YHA Queenstown Lakefront for refurbishment. Permanent staff turnover for the year was 25%. This is an annualised figure calculated using permanent staff departures against our average head count over the 12-month period. 55% of all staff are female and 45% are male. 84% of all staff work in hostels. The 25 different nationalities represented reflect the international nature of our business. New Zealanders comprise 46% of staff with the next three nationalities being British (14%), American (6%), and Indian (5%).

Long Service We congratulate team members who reached a significant employment milestone this year. Thanks to each of you for your contribution to YHA’s success! 10 years

5 years

Sue Fairclough, YHA Queenstown

Anna Allan, YHA Queenstown

Misera Lapa, YHA Wellington

Richard Girling, YHA Lake Tekapo

Jason Neave, YHA Aoraki Mt Cook

A Snapshot of Our People, 30 June 2017





PERMANENT Hostels: 79% (89 staff) National Office: 21% (23 staff)

139 hostel staff 90 staff

75 staff


Total : 112 staff

26 national office staff







101 hostel staff

18% 22 national office staff


Hostels: 94% (50 staff) National Office: 6% (3 staff) Total: 53 staff

Anna & Sue with their Long Service Awards

YHA New Zealand Network Conference in Queenstown

Employee Engagement

Health, Safety and Well-being

Our 2017 Staff Survey provided confirmation that we

YHA promotes a culture which supports a safe and healthy

are making excellent progress in our journey to be the

accommodation experience for guests as well as a safe and

employer of choice in our sector.

healthy workplace for staff. One health and safety measure

The annual survey covers eleven areas: health and safety, culture and values, common purpose, communication

is the number of work-related lost time injuries reported for the year. This year there were no lost time injuries.

and co-operation, the person I report to, my team, my job,

Last year we introduced a ‘Health and Safety’ section to

learning and development, performance and feedback,

the annual staff survey to measure YHA’s health and safety

reward and recognition, and overall perceptions. Staff are

culture. We were delighted with the most recent results as

asked to rate a series of statements on a scale between

health and safety continues to be the strongest performing

strongly agree and strongly disagree. The responses are then

survey section. The following statements took three out of

collated and a weighted average percentage score calculated.

the top five results for the entire survey:

This year we saw an increase in nine of the eleven

survey sections. The healthiest gains were in learning and development, health and safety, performance and feedback, and communication and co-operation. Engagement also saw a significant lift. With 60% of our

My Manager takes their health & safety responsibilities seriously

I have the knowledge and resources to do my job properly

I work safely even when no one is watching

workforce now engaged, we are an organisation whose people are passionate about what they do, are committed

This outstanding result reflects our ongoing commitment

to YHA, and who understand how their actions ultimately

to promoting good health and safety practices throughout

leads to YHA’s success.

the network.

What is the one thing more than anything else that makes YHA a great place to work? “The people we meet, the stories we hear, and the friends I have made.”

“Our culture and people.”

“The team spirit, fair and excellent management and knowing I’m working for an organisation that values humanity and the environment.” Alex and Rik, staff at YHA Wellington, as drawn by Jean Jamil.

Responses from our Staff Survey

@frk.konfusius on Instagram ISO 14064-1 • certified organisation

YHA Annual Report 2017


We continue to review and revamp our health and safety management system in line with our Health and Safety (H&S) Plan. This year we introduced a centralised online accident, incident, hazard and near miss form which has

Learning and Development In previous years’ staff surveys, employees indicated we could do better in learning and development (L&D).

simplified the reporting system for our staff. In addition, we

We took this on board and over the past two years have

completed a major project to convert our former hazard

been developing a learning and development framework,

registers to risk registers.

including a development pathway for employees from

National Board played their part in H&S by providing an oversight of our health and safety culture and performance. The Board’s due diligence process included its annual review of the management system and improvement plan, along with the H&S performance

induction through to management. Using a blended learning approach including on the job learning and course material, we have developed a range of online modules and worksheets to provide a suite of L&D tools for employees.

dashboard presented to each Board meeting. The

To support this framework, we have partnered with Service

dashboard includes updates on YHA’s risk management,

IQ, the industry training organisation (ITO) for our sector.

accident reporting and investigation, emergency

This partnership provides our employees the opportunity to

management, employee participation, ACC claims and

achieve NZQA accredited qualifications while participating

return to work, and continuous improvement.

in YHA’s learning and development programme.

As part of our commitment to staff wellbeing, YHA reports

We are now embedding this L&D culture within the

the average sick leave days per staff member. Sick leave

organisation so that it becomes natural for all staff to

this year was 2.38 days on average per person, which is a

participate in the programme. With a clear pathway

slight decrease from last year and is considered low.

through to management, our aim is to increase staff retention and further add value to our employees’

National Office Move

experience of working at YHA.

The building which previously housed YHA’s National

Here is an overview of our L&D pathway:

Office in Christchurch required earthquake strengthening this year, necessitating the movement of our 26 staff across the carpark into new premises. Effort was taken to ensure these premises would be fit for purpose and showcase YHA’s values and brand. Staff are delighted with their new home and welcome visitors to their new space.


Health & Safety Level 1

Health & Safety Level 2

Health & Safety Level 3

Customer Service Level 1

Customer Service Level 2

Pathway to Management

Guest Centrix Level 1

Guest Centrix Level 2

Guest Centrix Level 3

YHA Systems Level 1

YHA National Office


YHA National Office reception area

Management Systems

“We have very passionate staff who believe in what we do. Our staff in essence are the YHA brand. It’s awesome” Shannon Alker, Human Resources Advisor Left: YHA Taupo’s infamous ‘shoe tree’ Below: Mark Wells and Suzy Thyne cut YHA’s 85th birthday cake

YHA staff member Courteney at our Coes Ford Planting Day

Planting Day at Coes Ford ISO 14064-1 • certified organisation

YHA Annual Report 2017


Our Community YHA is committed to being part of a vibrant and active social community beyond the hostel network. At its heart, YHA is a gateway to new experiences, new friendships, and new understanding. People, Planet, Profit Vision This year, National Board established its long-term vision for our triple bottom line commitment. This vision is now being used to inform the Strategic Plan and each year’s Business Plan.




YHA’s amazing and happy staff

Our guests recognise the value

We are a financially sustainable

deliver the most awesome

in YHA because we are renowned

accommodation provider, offering

experience for guests as well as

as a leader and advocate for

our guests great value for money.

participating fully in making a

environmentally sustainable

Our business is successful through

difference in our local, national,

accommodation and travel.

all economic cycles, allowing us to

and international communities.

continuously invest in our infrastructure, and enable ongoing improvement in our network and services.

YHA in One Page This year we developed a one-pager that summarised in plain language our mission, values, commitments,


and strategic plan. The intention was

To deliver quality budget accommodation and travel experiences which enrich people’s understanding of each other, the environment and New Zealand.

to provide a simple overview of what can be quite complex documents – thus making this information more accessible for all. HOW WE WORK WITH EACH OTHER AND OUR GUESTS Respect •

• To live our values of respect, integrity, passion and excellence

• We treat others as we would like to be treated

• To focus on sustainability through our triple bottom line of People, Planet and Profit

• We encourage open, two way communication

• To recognise and respect the status of Māori in Aotearoa New Zealand

Integrity • We are honest, fair and open with each other

• To provide a safe and healthy workplace and hostel experience for all

• We keep our promises

• We stand up for what we believe in • We love to go the extra mile in all we do and we celebrate our successes Excellence • We always try to do things better and we share what we learn with each other

• Shows our commitment to the environment

• Maximising our revenue through smart, but fair, pricing and encouraging use of YHA’s direct channels to promote the network and membership wherever possible


• Supporting our guest’s experience with well-trained and • Being great local, national and international citizens participating in our communities, our industry and the Hostelling International network in a positive and

• We take personal responsibility for improving the way things are done • We want to do it best here at YHA! June 2016


• Makes smart use of technology

• Delivering a hostel network that sets the standard for quality, comfort and service excellence

• We are loyal to YHA and our team Passion • We take pride in doing a great job

WHAT WE ARE WORKING TO ACHIEVE Our over-arching goal is to operate a profitable and sustainable hostel network which: •

Cora Wilding Memorial Award

Conservation Efforts in the Community

The Cora Wilding Memorial Award is about helping young

Every hostel is required to have a local community project.

people reach their goals. YHA New Zealand’s founding

This year some of those projects included:

mission was to motivate and inspire young people to pursue personal development by exploring Aotearoa New Zealand and the outdoors. The Award reinforces that mission, having been established over twenty years ago to perpetuate the memory of Cora Wilding who founded YHA New Zealand in 1932. The Award comprises a subsidy of up to $4,000. Funds go towards the cost of participation in a personal development training course or project that will benefit the awardee as well as their local community. Awardees are also given a one-year YHA membership. This year’s award went to Hannah Overbye from Gisborne, who received funding to attend an Outward Bound course. Hannah is a leader both academically and athletically in her school. Hannah’s time at Outward Bound was spent increasing her leadership skills and expanding her appreciation for Aotearoa New Zealand’s environment. On the 21 day course she was also able to learn more about herself and others. Hannah reported back on her trip: “I can bring back my skills for my prefect role at school and I’m sure they will help me to lead all throughout life. But it also helped me to become a more compassionate person who’s accepting of everyone and their differences. I even came to accept myself. It was a huge learning experience for 21 days and I’m still learning things now. Outward Bound sparked a curiosity in me about the environment and finding solutions to polluted waterways for example, so I may one day educate myself on environmental science thanks to your help.”

Green Footprint Project The Green Footprint Project enables YHA travellers to

YHA Auckland staff completed two volunteer days on Motutapu Island in the Hauraki Gulf involving weeding, nursery work, and path clearing for the annual island marathon run. Staff also volunteer in their own time each week for organisations such as the SPCA and the National Maritime Museum. YHA Lake Tekapo’s Billy Kerr is a member of the local Regional Park committee. Billy planted up to 80 trees and worked with the local school to encourage visitors to help with the watering of the trees. He is currently working on providing the park with BBQ areas. YHA Glenorchy, Kinloch Lodge’s John Glover has chaired a community visioning task force for the last 18 months to produce a long term future vision for Glenorchy, focusing on sustainability, managing growth and the community’s effects on the environment. The hostel has an organic veggie garden to supplement the on-site restaurant, makes its own compost, and offers carbon-free transport for hikers to local tracks in their electric hybrid vehicle. YHA Bay of Islands, The Rock Adventure Cruise participate in beach clean ups around the local bays. Staff and guests undertake about 120 beach cleans every year on the islands while out on The Rock, which helps to stop any items washing from the beaches to the mainland. Owners Jonny and Sarah, along with their five year old, Scarlett, also participate in a project run by Bay Bush Action and monitor a number of pest traps that back onto the Opua State Forest. Other projects included: •

Zealand Maui dolphins •

off-set their environmental impact and reduce their carbon footprint by purchasing a native tree or shrub which is then planted in Canterbury or Wellington. This

YHA Rotorua participated in Clean Up New Zealand week by picking up litter in neighbouring Kuirau Park

The YHA Aoraki Mt Cook hostel management team volunteered on the local Fire and Emergency crew

year staff and guests, along with a number of local

and St John Ambulance

community groups and schools, planted over 700 hundred native trees and shrubs at Coes Ford in the Selwyn District.

YHA Christchurch fundraised to help protect New

Staff from both YHA Queenstown hostels took part in Clean Up New Zealand

YHA Hokitika supported the local Art club, and the Driftwood and Sand Festival

YHA Waitomo helped to fence off a local river and planted trees to improve water quality in the upper Waipa river catchment

ISO 14064-1 • certified organisation

YHA Annual Report 2017


Our Environment

“This is the way it should be”

YHA was founded on connecting young people to the outdoors. Many of our visitors come to Aotearoa New Zealand because of the landscapes and environment, so it’s important we protect our country’s core asset. Our staff and members expect no less from us and we do this because it is the right thing to do. YHA has been formally committed to minimising its impact on the environment for many years having signed the first HI Environmental Charter as long ago as 1992. Sustainable practices are embedded within our culture and our operational policies.

YHA New Zealand’s Kate Ufton

Our goal is to reduce the carbon footprint of YHA New Zealand and leave the planet in the same

on weaving sustainability into

or better state than we found it, so future generations can enjoy the same remarkable, diverse

hostel operations.

environment we enjoy today.

carboNZero This year YHA achieved a milestone in our commitment to environmental sustainability. Our managed hostels and National Office became the first accommodation network in the world to gain carboNZeroCertTM certification. Attaining carboNZeroCertTM certification is a three step process administered by Enviro-Mark Solutions based at Landcare Research Manaaki Whenua. Firstly, we measured our carbon emissions, which were certified by an independent auditor. Secondly, we constructed and committed to an emissions reduction programme. Thirdly, all certified emissions that remained were off-set. YHA’s carbon off-set supports a New Zealand provider of carbon credits – the Hinewai Nature Reserve and Wildlife Sanctuary on Banks Peninsula. Overseas carbon credit providers were considered; however the local option better aligned with our commitment to the New Zealand environment and our longstanding association with Banks Peninsula. We’re delighted to be able to support Hinewai and their land restoration programme, and understand that the certification meets an important expectation from a growing number of our youth travellers.

YHA’s Carbon Emissions 2015/16











Hugh Wilson, manager at Hinewai Reserve on Banks Peninsula

Kate Ufton and Brian Westwood with YHA’s “Best Green Accommodation

Emissions Data

Initiative” Award

Our certified carbon emissions for the 2015/16 year were 914.07 CO2e, with electricity, gas, and fuels comprising 85% of total emissions. The high proportion of emissions arising from energy consumption reinforces our investment in solar and geothermal energy sources. Additional improvements to hostels such as hot water reticulation, sensor lights, low-flow shower-heads, and upgrades to insulation and cooking facilities also assist with our commitment to reduce our greenhouse gas emissions. We reported last year that we installed a geothermal down-bore heat-exchanger at YHA Rotorua to heat the hostel’s hot water supply. We are pleased to report that in its first year the hostel achieved a 6% saving in power costs and an 8.5 tonne reduction in carbon emissions, set against a 9% increase in guest nights.

Solar Installations Last year YHA Franz Josef and YHA Wellington had photovoltaic panels and solar water heating systems installed. YHA Franz Josef’s full year result shows a 29% saving in power costs and an 8.4 tonne reduction in carbon emissions. The system, installed by Sunshine Solar, includes 108 square meters of photovoltaic panels which generate 125 kilowatts on an average day. This is one of the largest solar systems on the West Coast. In just six months YHA Wellington has achieved a 10% saving in power costs and a 5.4 tonne reduction in carbon emissions. The installation itself required a helicopter lift to place the 45 solar panels onto the roof. On the back of this success, we have recently installed solar into YHA Aoraki Mt Cook; this makes us the first commercial operator to do so in the iconic Aoraki Mt Cook National Park. The system includes 76 photovoltaic panels, 300 evacuated tubes, and is supplemented by additional insulation and reticulated hot water. All of these hostels also use a system called Splash Monitoring which displays real time energy usage and assists in managing power consumption.

Environmental Award This year we were the proud winners of the Best Green Accommodation Initiative awarded by the World Youth Student and Educational (WYSE) Global Youth Travel Awards. This is on the back of achieving second place last year. The award victory recognised YHA’s green policies and projects along with efforts by YHA staff to weave sustainability into everyday operations. ISO 14064-1 • certified organisation

YHA Annual Report 2017


International YHA New Zealand continues to be an active and contributing member of Hostelling International (HI), the trading name of the International Youth Hostelling Federation (IYHF). This membership is strategically important for YHA New Zealand and achieves a key competitive advantage. We continue to foster our international presence and relationships through the following: HI Conference, Gatwick, September 2016 Chief Executive, Mark Wells, represented YHA New Zealand at this meeting which is held every second year. Hostelworld Conference, Ireland, January 2017 Brian Westwood, Manager, Marketing and Sales attended this Conference, further building our international networks across the sector and across the HI network. Pacific Rim (PACRIM) Development PACRIM is a new collaboration between National Association marketing teams based in Australia, Canada, USA, and New Zealand. Brian Westwood has represented New Zealand to date in this initiative, including travelling to Vancouver in April 2017 for an initial meeting and to attend the North American Managers Meeting (NAMM). YHA Australia Relationship YHA New Zealand and YHA Australia continue to enjoy a close collaborative working relationship at both management and operational levels. This includes structured meetings among senior management as well as staff participation in each country’s key meetings. HI General Participation YHA New Zealand continues to contribute positively to HI. Mark Wells facilitated the Governance Review Committee established to review HI decision-making processes, while Brian Westwood remains an active participant in both the HI Membership and Marketing forums.

Brian Westwood presents at the North American Managers Meeting


Brian with colleagues at the North American Managers Meeting

Left: HI San Francisco City Centre games room, USA Below, left: YHA Australia guests explore Sydney Harbour Below: HI Montreal, Canada

International Youth Hostel Lijiang, China

HI Chicago common room, USA ISO 14064-1 • certified organisation

YHA Annual Report 2017


Financials Youth Hostels Association of New Zealand Inc


2016 $ 000s









Net Surplus / (Deficit) before Financing Costs Interest Received



Interest Paid



Surplus/ (Deficit) after Financing Costs





Gain/ (Loss) on Sale of Assets Gain on Revaluation of Investment Property (Impairment) of Goodwill NET SURPLUS/(DEFICIT) FOR THE YEAR Revaluation of Land & Buildings TOTAL COMPREHENSIVE INCOME (DEFICIT)















Net Movement in Equity for the Year



Equity at Start of the Year









Revaluation Reserve







Stewart Island Building Fund TOTAL ASSOCIATION FUNDS


These were represented by: 2017 $ 000s

2016 $ 000s





ASSETS Current Assets Long-Term Lease paid in advance Mortgage Investment Assets Classified as Held for Sale Investment Property Property Plant & Equipment Intangible Assets TOTAL ASSETS













LESS LIABILITIES Current Liabilities



Term Liabilities









On Behalf of the National Board

Ray Salter — Deputy Chair

K.Brewer — Convenor, Audit & Risk Committee


2016 $ 000s













Add Opening Cash Balance








REPRESENTED BY: Cash at Bank and on Hand Bank Overdraft





YHA Annual Report 2017


Notes to the Summary Financial Statements For the year ended 30 June 2017

These are the Summary Financial Statements of the Youth Hostels Association of New Zealand Incorporated (YHA New Zealand) for the year ending 30 June 2017. The specific disclosures included in these summary financial statements have been extracted from the full annual financial statements authorised for issue on 16 August 2017. The full financial statements have been prepared in accordance with the requirements of the Charities Act 2005, which includes the requirement to comply with generally accepted accounting practice in New Zealand (NZ GAAP). The full financial statements have been prepared in accordance with Tier 2 Public Benefit Entity Standards and reduced disclosure concessions have been applied. The criteria under which an entity is eligible to report in accordance with Tier 2 Public Benefit Entity Standards are that Youth Hostels Association of New Zealand Incorporated is not publically accountable and not considered large as its expenses over the last two financial period do not exceed $30 million per annum. These summary financial statements do not include all the disclosures provided in the full financial statements and cannot be expected to provide as complete an understanding as provided by the full financial statements. An unqualified audit opinion has been received on the full financial statements for the year ended 30 June 2017. A copy of the full YHA New Zealand financial statements for the year ended 30 June 2017 may be obtained by phoning YHA New Zealand on (03) 379 9970, or by emailing national.secretary@yha.co.nz. These summary financial statements have been examined by our auditors for consistency with the full financial statements. An unqualified audit opinion has been received. These summary financial statements were approved for issue by the National Board on 16 August 2017.

Basis of Preparation YHA New Zealand is a public benefit entity, incorporated under the Incorporated Societies Act 1908; and is registered as a charitable entity under the Charities Act 2005. These are the summary financial statements of YHA New Zealand and they comply with FRS43: Summary Financial Statements. The presentation currency is New Zealand dollars, rounded to the nearest thousand dollars. Full financial statements, upon which these Summary Financial Statements are based, have been prepared to comply with NZ GAAP and the Financial Reporting Act 2013. On 14 August 2017 the Association has an indicative offer from BNZ to extend the current facility and to fund the Tekapo development. The total facility is projected to increase to $26,572,100 which includes $9,500,000 of new development lending. The various tranches will mature between July 2020 and September 2021. There have been no other subsequent events to balance date which materially affect the result for the year, or impact on trading as a going concern (2016: Nil).

Specific Accounting Policies All specific accounting policies have been applied on the same basis as those used in the full financial statements of YHA New Zealand.


Auditor’s Report

Report of the independent auditor on the summary financial statements To the members of Youth Hostels Association of New Zealand Incorporated. The summary financial statements comprise: • • • • •

the summary statement of financial position as at 30 June 2017; the summary statement of comprehensive income for the year then ended; the summary statement of changes in equity for the year then ended; the summary statement of cash flows for the year then ended; and notes to the summary financial statements.

Our opinion The summary financial statements are derived from the audited financial statements of Youth Hostels Association of New Zealand Incorporated for the year ended 30 June 2017. In our opinion, the accompanying summary financial statements are consistent, in all material respects, with the audited financial statements, in accordance with PBE FRS-43: Summary Financial Statements issued by the New Zealand Accounting Standards Board.

Summary financial statements The summary financial statements do not contain all the disclosures required by Public Benefit Entity Standards Reduced Disclosure Regime (PBE RDR). Reading the summary financial statements and the auditor’s report thereon, therefore, is not a substitute for reading the audited financial statements and the auditor’s report thereon. The summary financial statements and the audited financial statements do not reflect the effects of events that occurred subsequent to the date of our report on the audited financial statements.

The audited financial statements and our report thereon We expressed an unmodified audit opinion on the audited financial statements in our report dated 16 August 2017.

Responsibilities of the Board members for the summary financial statements The Board members are responsible, on behalf of the Association, for the preparation of the summary financial statements in accordance with PBE FRS-43: Summary Financial Statements.

Auditor’s responsibility Our responsibility is to express an opinion on whether the summary financial statements are consistent, in all material respects, with the audited financial statements based on our procedures, which were conducted in accordance with International Standard on Auditing (New Zealand) 810 (Revised), Engagements to Report on Summary Financial Statements. Our firm carries out other services for the Association in the areas of treasury advice. The provision of these other services has not impaired our independence as auditor of the Association.

Who we report to This report is made solely to the members, as a body. Our audit work has been undertaken so that we might state those matters which we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Association and the members as a body, for our audit work, for this report or for the opinions we have formed.

Chartered Accountants 6 September 2017


PricewaterhouseCoopers PwC Centre, Level 4, 60 Cashel Street, Christchurch Central, PO Box 13244, Christchurch 8141, New Zealand

T: +64 3 374 3000, F: +64 3 374 3001, pwc.co.nz

YHA Annual Report 2017


Governance The Youth Hostels Association of New Zealand is a registered charitable organisation and an incorporated society. It is governed by a National Board elected by YHA New Zealand members. National Board

Member Participation

YHA New Zealand relies upon the vision and business expertise of its Board, which consists of six elected senior financial members and up to two co-opted members.

All senior financial members are, upon eight or more weeks’ current membership, entitled to vote in all YHA elections and vote on Constitutional Notices of Motion.

The Board’s role is to act in the best interests of YHA in order to deliver on its aims and objects and ensure its long term sustainability. The Board is committed to good governance and aligns its processes with the Institute of Directors’ best practice guides. It meets at least six times each year. The Board links its governance role to the day to day leadership and management of YHA through a close working relationship with the Chief Executive.

Register of Interests The Board maintains an up to date register of interests which is available for inspection by all Board members, the Chief Executive and Auditors.

Board Committees National Board has three sub-committees: Remuneration Committee – comprising the Chair (or their delegate) and up to two other Board members. Responsible for all aspects of the Chief Executive’s employment, including developing annual key performance indicators and remuneration. In addition, the Remuneration Committee signs off on all employment matters in relation to senior staff. Audit and Risk Committee – comprising no less than three Board members, one of whom is elected as Convenor. Responsible for monitoring and reviewing the internal and external audit, financial reporting and accounting policies, and systems of internal control. Also responsible for ensuring that a risk management framework, including adequate and appropriate insurance covers, is in place and the Board’s risk appetite is clearly stated. Awards Committee – comprising the Chair (or their delegate) and the elected Honorary Vice-Presidents. Responsible for receiving and considering nominations for service and merit awards and for determining the annual Cora Wilding Memorial Award.


Members are also encouraged to attend and take part in the AGM in order to gain insight into YHA’s strategic direction and performance. National Board publishes YHA News, an update for members on Board activities, four times a year. Over the course of the year, the Board held two meetings with members by general invitation – in Christchurch and in Wellington. A useful dialogue took place on both occasions.

Branches and Member Groups YHA Branches were originally formed by groups of likeminded members who often volunteered their time to support hostels and their activities. Many members of today’s Branch or Member Groups were involved with YHA when it was purely volunteer based and provide a valuable link to our history. Branch committees are responsible for co-ordinating member activities within the Branch and electing a representative to attend YHA’s AGM. Member Groups are an alternative way for members to come together for social and/or travel activities without the formalities of a branch structure.

Registered Office YHA New Zealand’s registered office is at Level 1, 166 Moorhouse Ave, Christchurch.

Acknowledgements Bequests Acknowledgement of Donations The estate of Gilbert Henry Boyd provided $50,000 this year. The estate of Ewen Duncan Jones provided $655 this year. The Eric Gordon Harvey Trust provided $6,591. In line with the trust deed this is to be used for the benefit of hostels in the South Island, so this year’s amount has been applied to the installation of solar panels at YHA Aoraki Mt Cook.

YHA is very grateful for the following donations of $100 or more. Green Footprint Anonymous Donor

$4,257 $1,000

Directory Patron

Honorary Vice-Presidents

Currently vacant

Dave Berry

Honorary Life Members 1967

Gordon Solloway

Harry Guitry Bruce Ward


Jim McKie

Chief Executive


Jean Nelson

Mark Wells


Peggy Jack (nee Lawless)

Donald Paterson


Rodney Metcalfe


Gwyn Rogers

Ruth Wildish


Roy Pyle


Peter Bugler


Bill Morris


Malcolm Wade

Bank of New Zealand


Mike Northmore

Gilbert Whalley


Bruce Bertram

Moira Lipyeat



Charlie Smith

Young Hunter


Ross Butler

Rhodes & Co

Lance Kiddey

Ben Mitchell

John Wilson

YHA Member Groups


Harry Guitry



Bruce Ward

Hawke’s Bay – Friends of YHA


David Berry


Amanda Gower


Coral Laughton

Clive Croy

Senior Leadership Team Kevin Cameron, Finance Manager Simon Cartwright, Hostel Operations Manager Maureen McCloy, Corporate Services Manager/National Secretary Mark Wells, Chief Executive Brian Westwood, Marketing and Sales Manager

Auditors PricewaterhouseCoopers

Charities Commission Registration Number CC37649

YHA Member Branches Auckland Whangarei

National Board John Hammond (National Chair) Kevin Brewer (Convenor, Audit and Risk Committee) Darren Burden Jaya Prasannan Ray Salter (Deputy Chair) Michael Sheehan Hayley Tribble Steve Wakefield

YHA Annual Report 2017


Youth Hostels Association of New Zealand Inc. Level 1, 166 Moorhouse Avenue, PO Box 436, Christchurch 8140, New Zealand ph: +64 3 379 9970 | email: info@yha.co.nz


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