Tourist Hotels’ Rising Costs

Press, Volume CVI, Issue 31080, 8 June 1966, Page 3

Tourist Hotels ’ Rising Costs

(N.Z. Press Association) WELLINGTON, June 7. Without the attractions of resorts such as Waitomo, Milford, the Hermitage and Franz Josef, much of the country’s tourist trade would be lost to New Zealand, according to the Tourist Hotel Corporation.

The annual report of the corporation was tabled in Parliament today. The report, for the year ended September 30. showed £1,710.408 in ~ revenue (£1,378,299 in the corres-

ponding year of 1964), hotels expenditure £1.655.847 (£1,276,647) and an operating profit of £54,561 (£101.652). New hotels brought in revenue of £209,837 in 1965 but they cost £263,403 to run. “The corporation provides a standard of comfort and service in areas which contain some of the most important of New Zealand’s natural scenic attractions, but where through isolation and seasonal fluctuations, the hotels are very difficult to operate profitably,” said the. report. Factors which materially affected financial results included severe climatic conditions and access, high building and maintenance costs, provision of services such as water and power, the need to

provide full staff quarters and amenities, the non-availability of part-time staff, and landscaping. grounds and car parking. For the most part the corporation had to face a high peak demand and an off-sea-son low with severe fluctuations in earning capacity from costly fixed assets. Overseas visitors spent more than £500,000 in the corporation’s hotels, and this was only a portion of the amount spent by those same visitors in New Zealand. “The losses of the corporation are. therefore, to some extent a measure of the price of maintaining and encouraging our expanding tourist industry.” With an average staff of

658 and costs of £533.831 for the year, the corporation was vitally affected by changes in awards.

The effect of the 6 per cent general wage order (effective September, 1964) and the latest licensed hotels employees award had been to increase staff costs by £52,418 over the previous year, exclusive of the new hotels. A moderate increase in tariff would not become fully effective until mid-1966. “It is not anticipated that the additional staff costs will be covered by this increase, but the corporation is averse to raising tariffs further, and other avenues of lessening the impact of these costs are being explored.”