Hotel investing ‘too dicey’

Press, 24 January 1986, Page 23

Hotel investing ‘too dicey’

PA Wellington

High interest rates, wage settlements, and inflation made hotel projects “too dicey,” the Opposition spokesman on South Island development, Mr Warren Cooper, has said.

The Minister of Tourism, Mr Moore, said on Tuesday that there could be a shortage of good standard hotel rooms in Auckland, Wellington, Christchurch, Queenstown, and Rotorua by 1990. His department was studying why investors had been slow to commit themselves to what was destined to be one of New Zealand’s main growth industries.

Mr Cooper said the facts were “transparently clear.”

“None of the hotels he (Mr Moore) foreshadowed 12 months ago has been

approved. The hotel developers are hiking the tariffs up on existing plant and taking advantage of the bottlenecks, particularly in Queenstown,” he said.

There the Tourist Hotel Corporation was “hamstrung” on planning and was going to appeal in spite of no finance being arranged or agreed to by the Government. The position in Christchurch was now critical, Mr Cooper said. “Why would any developer risk money on expensive construction with record inflation, interest rates, and wage settlements and little sign of relief from these impediments?” Mr Cooper said most prudent investors would “milk” an increasing profit from existing plant rather than risk undercapitalised extensions.