Is This The End For The Mt. Ruapehu Ski Resorts In New Zealand?

Julia Schneemann | | Industry NewsIndustry News
Kiwi
Mt. Ruapehu, picture: Save Mt. Ruapehu Facebook Page

Ruapehu Alpine Lifts, or RAL, the operator of Mt. Ruapehu’s twinned resorts Tūroa and Whakapapa on New Zealand’s North Island, is facing liquidation after the Government reportedly declined to provide a lifeline to keep it going until the 2023 ski season. The 2023 ski season in New Zealand goes from about June to October, so it is about six months away.

RAL was placed in voluntary administration in October after a below-average 2022 snowfall forced an early closure of most of the ski field. The snow that fell early in the season was washed away in August by La Niña rains. After two years of Covid-19 lockdowns, the struggling operator could not afford to continue operations and was forced to file for voluntary administration. The two resorts had been struggling for several years and had initiated a Life Pass Holder option for around NZD 5,199 a year in a bid to raise additional revenues.

The embattled operator has been saddled with NZD 45 million (USD 29 million) in debt and would require at least NZD 9 million (USD 6 million) to survive until the start of the 2023 ski season. The voluntary administrator, John Fisk, had put together an NZD 4 million (USD 2.5 million) rescue package from the New Zealand government and the Australia and New Zealand Banking Group Limited (ANZ). The funds were supposed to get the resorts through the summer but are due to run out by Christmas. More is needed urgently to stretch to the start of the 2023 ski season.

Mt Ruapehu
Mt. Ruapehu, New Zealand, at the beginning of the season in June | Picture: Mt. Ruapehu Instagram Page

The New Zealand cabinet decided on Monday this week that they were not going to be supplying any more funds and voluntary administrator John Fisk was forced to break the devastating news to the locals of Ohakune on Wednesday. Ohakune is at the foot of Mt. Ruapehu and is the gateway to the skifield Tūroa. The region used to be very involved in logging but now relies heavily on tourism. The lift operator RAL is the largest employer in the region, with approximately 700 workers in winter. The twin ski fields contribute an estimated NZD 100 million (USD 63 million) in revenue to the region and a further 880 jobs.

Sam Clarkson, founder of the Save Mt. Ruapehu Skifields Group, said the Cabinet decision to not extend any more financial aid was confusing, “That leaves us with only one option now, that’s liquidation.” He argues that closing the ski fields and removing the infrastructure from Mt. Ruapehu as a proposed alternative would cost up to NZD 100 million in itself and be more costly for taxpayers. “The taxpayer has two choices here, pay up about $10m or $15m to rescue RAL or pay $100m to slaughter the Central North Island economy, and Cabinet has given no reason why,” he said. “It’s just fiscal madness.”

The government is reluctant to supply RAL with any more funds. Last month, the Ministry of Business, Innovation, and Employment, short ‘MBIE’, asked the administrator to survey if RAL’s 14,500 Life Pass Holders would financially support a new entity to operate the ski fields. The MBIE had invested NZD 15 million (USD 9.5 million) in 2018 for construction of the Sky Waka Gondola and is not willing to invest any more funds into the struggling business. A restructuring of the operating company seems necessary either way.

Clarkson said administrators needed to hold a watershed meeting before December 16. Unless the Life Pass Holders vote to chip in funds to keep operations going until the start of the new ski season, it appears liquidation is the only other option at this point. Right now, there are a lot of initiatives to help the struggling ski fields around the volcano Mt. Ruapehu. We can only hope that community efforts can help bring the government over the line and save the two ski fields whose history is steeped in grassroots efforts.

Mt. Ruapehu Sky Waka
Mt. Ruapehu Ski Resort’s Sky Waka Gondola | Picture: Mt. Ruapehu Facebook Page

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