DOC earns $17m from concession fees and sharpens its commercial skills
Thursday, 15 June 2017
DOC seeks better returns from its land. Amanda Cropp reports.
The Department of Conservation is reaping almost $17m a year in concession fees from commercial operations on its land, and is promising closer scrutiny of payment dodgers.
DOC's income from concessions has risen by more than $3m since 2013 and it expects to earn $20m in fees next year.
Director of planning, permissions and land Marie Long said a new economics and pricing unit assessed concessions to ensure there was a fair market return.
'In the past some of [the fees] have been incredibly low … We're getting smarter in our negotiations.'
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DOC currently receives fees from 4478 commercial concessions with the largest contributions come from guiding, aviation, tourism occupations, and ski areas.
Concession fees were invested back on the conservation estate and were 'not about making money for the sake of it,' said Long.
But there is some unrest over the department's new aircraft landing fees which are being staggered over over three years from 1 July as new concessions are granted and old ones come up for reviews.
Tourism Industry Aotearoa (TIA) advocate Rachael Moore said the speed of their introduction was potentially 'crippling' for some businesses who set their ticket prices 18 months in advance.
Concessions are reviewed every three years and Moore said it was unfair on operators whose concessions came up for review in the coming months and faced an immediate price rise.
'It might look like aviation is pulling in a whole lot of money and is going gangbusters with glacier landings, but the reality is there is not a large profit margin in that industry, and you have to consider who's the market, and are they price sensitive or not?'
Moore said after years of 'running its house in a way that needed a bit of a tidy up' DOC had suddenly decided to charge ahead without properly considering the ramifications for businesses.
Southern Helicopters pays about $100,000 a year in concession fees and operations manager Lloyd Matheson is also president of industry body Aviation New Zealand.
He is very unhappy about the lack of consultation over the changes.
'We're not complaining about the fees, but we want them to delay the first stage until we can adjust our prices.'
Matheson said computerised recording systems that logged each take off and landing were not geared up to handle the wider range of charges that included snow and glacier landings.
Until programmes could be rewritten, recording would be done manually.
He said the DOC fee rises came on top on increases in Civil Aviation charges, so operators faced a 'double whammy.'
Long said out of about 200 aircraft operators, 20 were affected and they had been asked to 'demonstrate that there's an impact that they consider they cannot wear.'
Matheson's other gripe was that some operators were dodging concession fees by not logging landings.
Long said under most concessions aircraft operators now had to provide GPS data on request so it could be compared with activity sheets.
'We will be able to see whether the two forms of data are telling us the same story.'
It was difficult to check compliance in remote locations, said Long, but there was a lot of monitoring at popular sites, and closer auditing might uncover more problems.
'As as we get sharper at that, it may well be that we may find the odd suspension occurring.'
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