‘They need a white knight or they will keep decaying’: Iconic reef island resorts face ruin

Kat Donaghey
Sep 12, 2018, updated Sep 17, 2018

Great Keppel Island Hideaway damage from Cyclone Dylan in 2014 is pictured. Photo: AAP

Iconic Queensland island resorts face a future of ruin unless “white knights” can sink millions into the ageing reef getaways.

From one end of the Great Barrier Reef to the other, about half of the sunshine state’s once-popular tropical escapes are closed due to cyclone damage or financial struggles.

Others have not had a facelift since their heyday in the 1980s and 1990s as many domestic holidaymakers opt for luxury packages in Asia.

Queensland has 29 island resorts in the reef region, of which 14 are currently closed – including Brampton, Hayman, Daydream, Lindeman, Hinchinbrook, Double Island, Dunk Island, Great Keppel Island main resort, Hook, Happy Bay on Long Island, South Molle, Wilson and Pelorus.

Once synonymous with barefoot bars, white sand and sparkling pools, these resorts have not welcomed visitors for years.

In the Whitsundays alone, about half the island resorts are shut, although three are promising grand re-openings in the next 12 months, offering visitors a more premium experience.

Daydream Island, a once-popular Whitsunday family resort devastated by Cyclone Debbie in March 2017, will reopen as a four-and-a-half-star facility in early 2019 after a $100 million refurbishment.

Hayman Island, also smashed in the cyclone, is promising a “new era” of luxury when its InterContinental Hayman Island Resort opens in July, while Lindeman Island has been approved for a $583 million redevelopment after it was severely damaged in Cyclone Yasi in 2011.

The Queensland government is trying to revive the suffering island industry, opening a $25 million infrastructure fund to encourage owners to “grow, green and clean” resorts.

A spokesperson for the Department of Innovation, Tourism Industry Development would not reveal how many applications had been received since the fund opened on August 1 (it closes on October 1).

The government has also promised $25 million to reconnect power and water to the now-demolished Great Keppel Island resort off the coast of Rockhampton.

The resort is seeking investors through cryptocurrency for a $300 million development.

Associate Professor of tourism Dr Pierre Benckendorff, from the University of Queensland Business School, said some resorts could face permanent closure.

“Some of the islands need a white knight to save them and sink a lot of money into them otherwise they will continue to decay,” said Dr Benckendorff, citing Chinese companies as the most likely saviours.

“Some of the resorts are just falling apart and each time they get hit by another cyclone, they fall apart some more.

“It’s inevitable they will have to shut permanently.”

Dr Benckendorff said the popularity of affordable five-star getaways to south-east Asian islands had frightened off investors concerned about returns in Queensland.

However some island operators have enjoyed success building a premium niche market catering to the top end of holidaymakers, including Lizard Island, which offers extreme luxury from $2000 a night.

Dr Benckendorff said running island resorts was very expensive due to high labour and construction costs. Owners also had to contend with multiple levels of government and sometimes the Great Barrier Reef Marine Park Authority as well as national parks.

Queensland Tourism Industry Council CEO Daniel Gschwind said he was optimistic about the future of Queensland’s island getaways.

“Tourism is moving towards special experiences; experiences you can’t duplicate elsewhere and with special connections, and islands are a wonderful mythical place,” he said.

“I think people are willing to pay premium prices for premium experiences. In Queensland we have a well-managed environment and marine parks, which they don’t have in Asia, which ensures we will have a competitive future for our premium tourism products.

“It can’t be overstated how important a pristine natural environment is.”