Updated Hut Maintenance Figures

When back-country hut fees increased several years ago, I wrote with some disappointment about how I saw hut fees as being the price of being honest. I still think that, but it’s not something up for negotiation right now.

Back then, I also tried to compare the expenditure on maintenance of back-country huts with the revenue from back-country hut tickets. This wasn’t fully possible because a DOC accountant told me that spending between regular back-country huts and Great Walk huts couldn’t be separated, despite the user-pays component of the latter not actually coming from back-country ticket and pass sales.

In other words, the $16.5 million figure for expenditure on “huts” in DOC’s 2009 Annual Report couldn’t be split between two classes of hut which are treated radically differently where maintenance is concerned, and so couldn’t be nicely compared with the user pays revenue streams for those classes of huts. Comparing hut ticket revenue with $16.5 million of expenditure wasn’t very meaningful when the bulk of that spending is probably going to maintenance of huts with user-pays fees sourced elsewhere.

Lately, in April we had a forum conversation on the NZ Tramper website, and this question of comparison came up again. Trying my luck a second time I fired off an Official Information Act request, and this time it seems to have gone to someone much more helpful. I received the exact figures I asked for. I didn’t bother to ask specifically about expenses on Great Walk and similar huts because they don’t interest me as much, but here are the comparisons for regular back-country hut revenue and expenditure for the last few years.

Year ending June
2011
$000
2012
$000
2013
$000
2014
$000
Expenditure:
Back-country huts direct operating expenditure* (4,318) (4,628) (3,804) (3,721)
Great Walk huts direct operating expenditure** (?,???) (?,???) (?,???) (?,???)
Capital charge costs and corporate overheads (?,???) (?,???) (?,???) (?,???)
Total Expenditure*** (17,363) (18,270) (17,680) (18,077)
Revenue****:
Back-country huts revenue 1,447 1,525 1,588 1,606
Great Walk huts and tracks revenue 4,210 4,240 4,806 5,293
* Direct operating expenditure on back-country huts whose user-pays funding comes from the back-country ticket and pass sales.
** Direct operating expenditure on Great Walk and similar huts, whose user pays funding is via advance booking system, was not requested.
*** Total expenditure on “huts”, which includes capital charge costs and an allocation for corporate overheads, as well as maintenance.
**** Revenue figures for back-country tickets and passes are published in DOC’s Annual Reports.

The lines I’m most directly interested in from the above table are the direct operating expenditure on back-country huts, compared with the back-country huts revenue. That’d be these lines here:

Year ending June
2011
$000
2012
$000
2013
$000
2014
$000
Back-country huts direct operating expenditure* (4,318) (4,628) (3,804) (3,721)
Back-country huts revenue 1,447 1,525 1,588 1,606

The meaning of these figures is open to interpretation. For those who point out that maintaining the back-country hut network is expensive and so user-pays is critical, I’d agree that yes it is arguably expensive, but also argue the significance of user-pays is more about funding priorities and what’s considered most critical in our lives than it is an absolute.

By way of comparison, the $26 million line which the government’s added to a spreadsheet for the upcoming New Zealand Flag referendums would keep New Zealand’s back-country huts running fee-free for about 6 whole years, or for 16 to 20 years if merely used to replace the $1.6 million or so revenue currently obtained annually from user-pays, and added what DOC presently tops up from its budget.

Whether back-country huts should be user-pays or not is a separate question, but I think the expenditure figures, in particular, put into perspective just how great a deal we seem to be getting on maintaining the bulk of our hut network, compared with the amount of slush which the government turns over from hour to hour.

It’s important to be cautious about making assumptions on what’s happening where trends are concerned. I still find it interesting to see that ticket and pass revenue from these huts is apparently going up over the past four years, whereas expenditure is apparently coming down. It’d be useful to understand more about why there seems to be this trend. I can’t answer that with certainty, but maybe someone out there can shed some light on it. Several ideas come to mind.

  • Maybe expenditure by DOC has gone down because it’s been able to rely more on corporate donations as part of its partnerships programme. eg. Here’s a swish advertorial from the government about one of its corporate partners.
  • Maybe it relates to DOC’s growing interest in fostering relationships with volunteers to put forward business cases and then carry out back-country maintenance, with programmes such as the huts and tracks fund.
  • Maybe expenditure has genuinely come down due to recent government policy and funding allocations, and back-country huts on the ticket and pass system are being inadequately maintained.
  • Maybe it’s a combination of all of the above, or none.

Equally of interest is that ticket and pass revenue has been gradually increasing. Relatively recently, DOC’s made pushes in some areas to try and entice more concentrated numbers of people into some of the more accessible parts of the hut network, and having people concentrated in the same place will normally be more cost effective from a bean-counting perspective. eg. In the last few years, parts of the Jumbo/Holdsworth loop of the Eastern Tararuas have become more family friendly, and popular as a result. This doesn’t necessarily translate to increased usage of other parts of the network. Or maybe DOC’s gotten better at convincing people to pay in more places.

As usual I’m just rambling without much authority, and interested in whichever thoughts and insights others might have, if any.

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