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The Queenstown Lakes District Council is ''ringing alarm bells'' after hearing revenue from council-owned holiday parks is well behind that of previous years.
In yesterday's finance and corporate committee meeting, councillor John Mann expressed his concern about the holiday park figures for Queenstown, Arrowtown, Wanaka and Glendhu Bay.
Revenue for the first quarter of 2012-13 is down about 7.2% across all parks' incomes.
The worst is Queenstown, which is down 15% in revenue and 17% on budget compared with last year. In his report, holiday parks manager Greg Hartshorne put the poor performance for the year down to a bad ski season, a change in the market and deals being run by the hotel sector.
''The ski season by all accounts has turned out to be only an average one and, with the huge discounting going on across the market, there appeared to be a lot more people flying and taking advantage of these rates."
This resulted in a large drop in the number of campervans visiting during winter and a higher occupancy rate in the hotel and motel sector.
Although the summer months saved the council's holiday parks last year, it is not clear if there will be a repeat.
Mr Hartshorne said the outlook for the next few months was ''confusing'' and mixed, with bookings strong in some weeks and very low in others.
While the Queenstown holiday park had the biggest drop, Arrowtown was down 5% and Wanaka down 11% in revenue. Cr Mann had concerns over how the council could rectify this and make up the total costs.
''We are building up a big bell curve here ... I don't think there is a show ... of making this up.
''That's too much to make up. What initiatives are we looking at to cut out the operational costs, because we're not going to get the numbers.
''I'm ringing bells at the moment that I'm quite concerned."
Mr. Hartshorne's report said the area had lost a lot of its traditional visitors, particularly from Europe.