The Antipodean Explorer: How a tourism outsider is launching a luxury, length-of-NZ train service

Chinese developer Fu Wah International’s investment followed a meeting with Johnston in Beijing last year. Image: Anthony Chong

When Amanda Johnston went to see Chinese developer Fu Wah International seeking investment for her length-of-NZ luxury train venture, it was the very first meeting of what she thought would be a long day of door-knocking.

It was September last year and Johnston was in Beijing thanks to work by NZ Trade and Enterprise’s Ivan Kinsella, the government agency’s Shanghai-based director of commercial relations for Greater China.

Kinsella, who knew Fu Wah from previous work, introduced Johnston to the company paving the way for their Beijing meeting.

“He had put together a list of other potential investors,” says Johnston, the co-founder and general manager of the soon-to-be-incorporated Antipodean Explorer New Zealand Limited.

Kinsella needn’t have bothered – Fu Wah was in.

“We didn’t even approach the other investors,” Johnston told the Ticker.

Fu Wah was no stranger to New Zealand and the tourism sector here with its $200m Park Hyatt hotel coming out of the ground in Auckland and a $300m, 425-apartment complex being built at the city’s Wynyard Quarter.

Its general manager for the South Pacific region, Richard Aitken, was at that initial meeting in Beijing.

“Right off the bat, we were very impressed with the preparation that Amanda and her team had put into the plan,” says Aitken, who is now a director of the new rail venture.

“They had been working on it for several years and every question we asked they had a sensible answer so it was easy for us to be confident in it. We believe in the tourism market here in New Zealand and when we put the two together it really wasn’t a difficult decision for us.”

The developer became a cornerstone investor in Johnston’s venture, bankrolling it with the finance it will need to get to launch in late-2019 – an amount understood to run into the tens of millions of dollars.

“To invest in a venture like this you have to genuinely believe in it because it’s a very high-risk project – every dollar is spent before you get a single customer,” says Johnston, who hails from an investment background.

“You have to fundamentally believe that the customers are there and in terms of seeking investment, that was one of the most challenging things for us.”

But with Fu Wah and its deep pockets aboard, the planning of the new service could begin in earnest.

The proposed Antipodean Explorer will spend six nights travelling the country starting in Auckland and ending at a South Island terminal yet to be determined. Its 56 passengers – the Chinese luxury market is being targeted – will alight and catch a luxury bus to Queenstown where the tour will end.

Work is currently underway with Dunedin Railway that could potentially allow passengers to transfer onto a train to go to Middlemarch and then be driven to Queenstown.

“The two official terminuses will be Auckland and Queenstown but obviously there is no rail line into Queenstown so we will get as close as we can and then drive and boat there,” says Johnston.

“We are still finalising the timetable at the moment so it’s subject to change. We would love to go to Northland and if that [rail] line was upgraded then we would be the first in line to use it. We can go to Invercargill so that’s a possibility also.”

Passengers will have the option of taking 2-, 4- or 6-night journeys and they will change trains just once, for the Cook Strait ferry crossing.

There are no details yet on pricing but Johnston says it will be “in line with other luxury trains around the world”.

For customers, the core proposition is enticing: come explore every region in New Zealand in the comfort akin to a luxury hotel.

Between Auckland and Queenstown, the service will stop every morning and afternoon at around 75 locations for passengers to take part in activities. Johnston says she has a list of 75 tourism operators she is keen for the service to connect with throughout the country.

“We will have two luxury coaches that will follow the train around that will take people to activities. We are not doing this on our own – this is a collaboration and we really want to hear from operators who would be interested in working with us.”

Negotiations with KiwiRail over access to the country’s rail network are underway. The state-owned enterprise, which has its own rail tourism products, has received the new venture positively.

“KiwiRail is keen to welcome new tourism ventures to New Zealand and views the proposed sleeper service as complementary to our Great Journeys of New Zealand tourism experiences,” says a KiwiRail spokeswoman.

The next requirement was the stock. Where could the venture find the sixteen railcars required to launch?

As it turned out, Auckland Transport had 31 rail carriages for sale sitting in storage at Taumarunui. The carriages used to run on the city’s suburban network up until three years ago when they were replaced.

The new venture has an agreement to buy the stock subject to KiwiRail giving it permission to operate on the national rail network.

“That hasn’t been given quite yet but it is expected to be given in the next few weeks,” says an Auckland Transport spokesman.

Johnston became aware of the stock and now had the money to make an offer.

“They are the bones of our business so we were really fortunate to become aware of that opportunity,” she says.

The plan is for the carriages to be refitted in South Dunedin’s Hillside engineering workshops, which would be re-opened after they were closed by KiwiRail five years ago.

Although she has led the project for seven years, Johnston says it was her husband, John, now a fund manager at investment firm Milford, who originally came up with the idea.

“He got the idea after travelling on an overnight train in Vietnam, combined with a great love of New Zealand and ten years working overseas and recognising some of the challenges that tourism in NZ has, particularly at the top end of the market.”

Coming from outside of the rail and tourism industries had not deterred the Auckland couple from getting stuck into the project. With three young children and extended family in Hawke’s Bay and South Canterbury, travel around New Zealand is a part of life and has helped inform their view of the rail venture’s potential.

“We both come from an investment background – not tourism – but we personally spend a lot of time travelling around New Zealand, we have a young family and we spent ten years living overseas. I guess that has helped us appreciate what’s truly unique about New Zealand,” says Johnston.

“This is all very new and we are still working through all the contracts but they are very much heading in the right direction. We’re confident they will be completed this side of Christmas.”

And then, as they say, the hard work begins.

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