ComCom green lights Spirit of Queenstown acquisition

By earthnews
1 year Ago

ComCom green lights Spirit of Queenstown acquisition

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Tourism ship the Spirit of Queenstown on Lake Wakatipu.
Photo: Supplied/ Southern Discoveries

A South Island tourism operator is set to secure a Queenstown cruise boat enterprise from a competitor that received nearly $7 million dollars of government support during the pandemic.

The Commerce Commission said it has authorised South Island tourism business Real Journeys Limited, which trades as RealNZ, to acquire the Spirit of Queenstown from fellow operators Southern Discoveries.

It follows an investigation about possible effects of the acquisition significantly lessening competition.

RealNZ also owns the long-standing TSS Earnslaw which also operate cruises of Queenstown’s Lake Wakatipu.

Both tourism operators received multimillion dollar government subsidies during the Covid-19 pandemic, most of which were loan funded.

Southern Discoveries, which is owned by the Skeggs Group, received more than $6.9m as part of the government’s support package for the tourism sector.

Ministry of Business, Innovation and Employment reports this sum included a $500,000 grant with the remaining $6.4m loan-funded.

Real Journeys Limited, which also operates several other tourism attractions across the lower South Island, received $25m.

The commission said it was satisfied that RealNZ’s acquisition was unlikely to “lessen competition in any New Zealand market”.

“RealNZ is focused on offering transport across Lake Wakatipu, on the vintage steamship the TSS Earnslaw, to experiences that it offers at Walter Peak High Country Farm,” a spokesperson said.

“Southern Discoveries, via the Spirit of Queenstown, provides food and beverage-focused cruises on Lake Wakatipu, without transportation to an end destination.”

Although both operators offer scheduled tourist cruises on Lake Wakatipu, the commission said it considered a range of factors, including the parties’ product offerings, pricing and passenger numbers, and found they “do not compete closely”.

“Given this, the commission is of the view that there would not be a substantial loss of competitive constraint on RealNZ as a result of the acquisition.”

RealNZ’s acting chief executive Paul Norris said the commission’s investigation was the important piece of the sale and purchase process.

“We’re thrilled that the Commerce Commission has granted approval for the acquisition of the Southern Discoveries vessel Spirit of Queenstown by RealNZ,” he said.

“We are currently working through the rest of the process for the acquisition to go unconditional.”