Newfound NV, the parent company of Humber Valley Resort, has successfully concluded its transaction to become an AIM listed company trading on the London Stock Exchange. It has been a long year for us as our focus and attention was often absorbed with the change of our group. It was a necessary thing as the growth we have experienced over the last years has choked our ability to move as fast as we would like on more than one occasion. I started Humber Valley because I believed with the right pieces in place, we could create a destination where people could have magical experiences with their families and friends. I am still a bit amazed at the explosion of those that felt the same way once they experienced the Valley. While this success is more than we had hoped for, it also created pressures we were unprepared for. Construction commitments that were ten times what we had planned, 400 rooms a year being added to the resort – the equivalent of a major hotel each year, infrastructure demands years ahead of schedule.
Another result of the surge of buyers of Humber Valley property was a number of units that were bought as smart investments, and now that property values at Humber Valley have tripled in some cases since they were bought less than three years ago, the resulting re-sales have slowed our development expansion. This year over 60 international buyers have visited Humber Valley with the overwhelming majority falling in love with the resort and the valley as we have. We are focusing on the re-sales now as well as strategic development to compliment the tourism experience.
As I stated during our owner meetings this year, our energy and investment have been centered on improving the holiday product. Over the last months, we have been reviewing the resort master plan and focusing heavily on continually adding to the vacation experience with our expansion. We are trimming down our property offering for 2007, continuing with higher density enclaves inside the current development area, and adding amenities on a smaller scale. At long last the day-spa chalet conversion is ready to start and will be open during this winter.
We see an indoor swimming pool and meeting space as our next larger amenity requirements, and we are looking at a plan to expand the clubhouse to satisfy them. I apologize for the inability to get the tennis courts in this year but we could not get it on the schedule. The driving range was completed however, although it still needs time to mature and both this and the first courts are expected to open during the summer of 2007.
The biggest news we have is that we have just signed a deal with Astreaus to offer twice weekly 737 service from Gatwick to Humber Valley starting in late January. This is a key step for us as with flights moving on Tuesdays and Fridays, we can offer 3 and 4 day packages for quick getaways. The planes will leave London in the afternoon and arrive in the Resort at dinnertime. Going home you will leave the Resort in the evening and stop briefly in St. John's to pick up those heading to London, with the flight arriving in the early morning. I have been pushing hard for this schedule for some time, as I believe it is the easiest way to do the trip home and get the most out of your time in the Valley.
By going through St. John's we are able to help defray the cost of the two planes a week, and if the market there responds, we hope to be able to increase frequency by the summer. Also, because of Astreaus' business relationships, we can look at routing through Dublin as early as this summer. I know our Irish owners have been frustrated at the inconvenient travel options available, but to date it has been a chicken and egg problem with a committed aircraft too expensive to maintain during the time it takes to penetrate the tourism market, and without Irish commercial rights or relationships, stopping in Dublin was exposing our carrier to Fifth Freedom rights and the potential loss of routes.
The simple truth with airplanes is that the more seats we can fill, the more flight options will become available, and like the tourism market, it takes time to grow the volumes. I know a lot of owners have asked how they can help expose the Humber Valley product, and I think the best way is to sell some of those seats with us. We are continuing to seek out and establish more and more conduits to market and sell our vacations, but those that have already discovered the magic of Humber are our best salespeople. I want to make it worth your while also, and for our owners this winter, we will be offering rewards for helping us introduce people to the Humber Valley experience. The flights run from late January until early April, and I hope we can see the kind of results that will allow us to expand the service again in June. More information regarding flight incentives to owners will be forthcoming shortly.
Having stood in front of large groups of Newfound owners in three countries over the last year, I understand the questions that you ask yourself about the progress being made in Humber Valley and the company as a whole. Our biggest challenge has been trying to communicate to a large geographically diverse group of people on a regular basis, and to compliment the regular resort updates, we will soon be introducing a Newfound magazine for our owners, investors, and employees internationally. We want to let you know the exciting things that are happening and the growth of our company since the last time you saw us. We are also planning a web-cast in the new year so that all of our owners can log on around the world and communicate directly with the Newfound senior management team.
As you know, Newfound NV has been looking over the last years for other locations that share the same ingredients as Humber Valley so that we can expand our model of large-scale resort development, operations, and vacation sales. We have found some places that truly fit with Humber Valley as unique and special destinations. The first of these is almost ready to start, and it is on the Caribbean island of Nevis. What Humber Valley is to me in terms of an authentic Canadian experience, Nevis is to the Caribbean version. Friendly, beautiful, safe, relaxing, and fun, this project has been a lot easier than Humber Valley was, as it is an established tourism region and the Four Seasons resort is directly adjacent to our 600 acre parcel. Stretching from 2000 ft of golden beach to rainforest 1400 feet above on the side of a dormant volcano, Pinney's Estate is a worthy sister of Humber Valley.
The growth of Humber Valley lies in the tourism product that we offer. We have gone through great pains over the last eighteen months to recruit and assemble a high quality of management to help build the Humber Valley experience into a truly fantastic international vacation product. Mike Clewer has fleshed his team out through this year, and I see already the constant improvements that are occurring at the resort. I look forward to you seeing in the coming year the results of the hard work being done now.
One thing that could help Humber accelerate the tourism business is the introduction of a major leisure brand into the resort, along with its established customer base. This was a very difficult task in the past as the location was too unknown, but in Nevis and the other locations we are developing, we have been engaged with the world's leading hotel, retreat, and spa brands for the last year. In future Newfound resorts, we will begin with higher-density centralized development with these brands, and then over time build out and develop our Newfound branded lower density Humber Valley-style communities with additional amenities. Pretty much the opposite of how we did Humber Valley.
I see it still a bit premature to bring these brands to Humber Valley as we need more access, but with our first New York flights happening in 2007, I hope we can have a regular flight service by winter 2008 to the U.S ., and we will be bringing some of these operators to see the Resort in the coming year. Our master plan will have central locations in expansion areas for this type of development.
We see clearly a family of these resorts in the future, all sharing the same quality of experience in distinct international locations away from the pack, but large enough in scale to allow the amenities and access without sacrificing the privacy and safety that allows a true retreat and escape. We see the Newfound brand being known for great vacation developments that let you create your own perfect holiday.
We are very excited by this future as it lies immediately in front of us. As I have spent the last years traveling to different locations and meeting with successful companies in the leisure development and travel business, I know our plan is on the right tracks for where these industries are evolving. Second home sales continue to increase in Europe and North America and the adventure vacation business is growing steadily. The demographics will favor this model for another generation, let alone the constant increase in affluence in our target markets that makes second home lifestyle investments and high quality vacations more attainable for more people all the time.
Having a number of special locations like Humber Valley developed and preserved for generations to come will only make the experience and the real estate more valuable. We look forward to the Newfound owners being a very privileged group of people that each own a piece of something very special. We have always been very sensitive to our owners interests, and for the third year in a row, the Resort is going to cover the costs of the property operations for those whom did not receive enough rental income to pay those costs in 2006.
It will be the last time we do this, but we do appreciate that people wish to see the tourism volumes grow faster. We have spent a lot of time and energy restructuring ourselves, building our resort management team, and growing our reach and relationships internationally so that we can better put the bridges in place that will make Humber Valley the destination we all know it will be. From where I sit, I am pleased with the progress made in the short time since we started, but more excited about what I see in the immediate future for us.
Once again, thank-you for your support and belief in Humber Valley and us, and I look forward in the future of providing you with more and more benefits from your Humber Valley ownership, and most importantly, more great memories created with us that will be with you always.
Kind Regards,
Brian Dobbin
Chief Executive Officer
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