Chateau deserves support

The strategic director of the Hotel Council of Aoteroa James Doolan says it would be a “real shame” to lose an asset like the Chateau Tongariro, said.

“The Chateau is an iconic hotel property in the New Zealand eco-system and in order to create a thriving visitor economy as well as the moutains and the rivers and the views we need good high quality accommodation like this one,” he said.

Luxury hotels had a primary role in encouraging high-spending tourists into the country. They deserved to be “incentivised” by both local and central government.

“The kind of tools which could be used could include rebating the GST that gets earned by the hotel. Considering the money they bring in; I’d like to see incentives like those once offered to overseas film companies.”

He had heard that the Chateau had become run down in recent years, as the previous owners did not keep it up to the mark.

“I haven’t visited for a while but I think its evident that running a luxury hotel is not a high margins business. Luxury hotels might expect to have one employee per guest room.

“And if you have that, your employee costs are $30 an hour and the labour costs alone for running a luxuary hotel might be $240 a room per day.

“So I think the demise of the Chateau in its present form has shown how running a hotel of any kind is not an easy business.

“Obviously that’s been particularly so during the extended period of borders being closed to intenational travellers. It’s very hard to recover from that extended period without getting revenue.

“Add to that operating in a national park, a bit of isolation for staff to overcome, iwi land claims working their way through the system and the need for earthquake strengthening. It all adds up, but its also all present elsewhere.”

He said the Chateau was competing with destinations around world which touted for the same international travellers. Most of these had lower construction costs, lower land costs, less strenuous earthqauke regulations and an easier way of doing business.

“The challenges of running a hotel are tough enough even in a modern building, built to standard and the highest levels of energy efficiency. But when you inherit an historic building and need to bring it up to standard then that’s an extra cost layer that sits on top of running the hotel.”

Overseas the regulators, the councils and central government used tools to encourage hotel development, recognising that high-end hotels facilitated the entire tourism economy.

“Tourism was New Zealand’s largest export earner before Covid and is currently number two, even as we still recover from Covid. Many other destinations that heavily rely on tourism could be a little more proactive in helping to encourage investment in hotels, where and when they are needed.

“The Chateau is the perfect example of how challenging it is to run a hotel, particularly when high value international travellers have been effectively shut out for an extended period of time. I feel the Chateau deserves support in order to flourish once more.”