HCA Strategic Director, James Doolan.

By James Doolan – HCA Strategic Manager

As New Zealand’s worst ever high season ends, there are a number of misconceptions that Hotel Council Aotearoa (HCA) is determined to set right.

Many non-hoteliers believe that closed borders provide a bottleneck of “pent-up demand”. Unfortunately, hotel room nights are perishable and lost revenues are gone forever. There is no such thing as pent-up demand for yesterday’s unsold room-night. A hotel stay can’t be home delivered by Uber or experienced virtually by Zoom. Losses have accumulated for such a long time now that overall recovery will be long and hard from here.

Others believe that Managed Isolation and Quarantine (MIQ) work is a form of central government industry support. Only one in every 10 hotels is providing MIQ stays. That’s just 32 hotels out of New Zealand’s more than 330 hotels and motels with 30 guest rooms or more, or around 6,000 guest rooms out of a total rooms supply of 32,000. Any rhetoric suggesting MIQ has ‘saved’ the hotel sector is alarming and wrong. RevPAR stats are abysmal including the MIQ earnings, they are catastrophic without.

RevPAR in Auckland is at half the level it was before borders closed due to the pandemic.

Hoteliers in New Zealand wonder whether policymakers truly understand the business model and ‘product’ that hotels sell. Our leaders appear not to recognise how hotels are key infrastructure in any healthy tourism economy, sitting alongside a country’s airlines, airports and domestic transport network as the ‘tourism backbone’ that delivers high-value international guests into the country.

Auckland is a prime example of the confused approach to hotel sector support after COVID-19. Auckland Council is consulting on whether to reintroduce its targeted rate on accommodation providers. The targeted rate does not adjust for catastrophically low earnings, it places a disproportionate burden on accommodation providers while ignoring other tourism economy businesses, and the revenues generated by it are earmarked for spending that’s not highest and best use in the recovery. 

Auckland City Council received backing for its targeted rate proposal from the NZ High Court.

Elsewhere around the world, city councils and central governments have provided target assistance for hotels, including ongoing wage support, waiving all business rates and/or shelving plans to introduce new bed-taxes. In New Zealand, our leaders seem to think the time is right to add to hotel fixed costs – kick the dog while it’s down.

New policy should help not hinder the accommodation sector.  Now is the time for visionary leadership and fresh thinking in support of all of our tourism backbone, including hotels.

HCA is an advocacy-focused organisation with a mission to educate and influence key decision-makers on matters of importance to the New Zealand hotel industry. HCA’s target membership encompasses hotel owners, general managers, operators/brand companies, consultants, academics, advisors and other organisations and individuals having a close professional connection with the hotel industry. HCA currently represents over 140 New Zealand hotels, comprising over 15,600 guest rooms or 5.6 million available room-nights per annum.