Motels around the country hosting former prisoners, homeless to try and survive Covid-19 downturn

April 20, 2020

The downturn from Covid-19 has been tough on thousands of motel owners. (Source: Other)

Ron Hunter is like most moteliers in New Zealand.

Many buy a lease on a motel for upwards of $600,000, then pay monthly rent to the landlord of between $30,000 to $50,000.

For the vast majority of moteliers and their families, their business is also their home.

Mr Hunter told TVNZ1's Q+A many families are left with "nothing at all" after being unable to pay rent during the Covid-19 crisis. 

He has no bookings between now and October. His family does not know what the future will hold post-Covid-19, but he is trying to stay positive.

"There is an opportunity here, we're not sure what it is, but we'll find it," he said.

In Rotorua, Mike Gallagher is trying to keep things going without any guests.

"The stress that that's brought on us and our colleagues is horrendous," he said.

This year, hotel occupancy levels have gone from 90 per cent down to two per cent.

There are 2000 motels in New Zealand, 600 hotels and 300 holiday parks, over half of them have had to make staff redundant.

Motels would usually be around 75 per cent occupancy rates in April, but they're down to 8 per cent. The eight per cent are Ministry of Social Development emergency housing clients along with some homeless people waiting out their lockdown.

Julie White is the CEO of Hospitality NZ overseeing the hospitality sector and accommodation providers.

"I understand some motels have been asked by Corrections to take on former prisoners,” Ms White said.

Like the wider hospitality sector, the Government has assisted moteliers with wage subsidies, tax and the guaranteed loan scheme.

"Unfortunately, 30 per cent of their outgoings is rent so unless they get some relief because they haven't had any income for over six weeks now," Ms White said.

A few days ago, Hospitality New Zealand wrote to Cabinet ministers asking them to adopt a code of conduct for landlords working with tenants similar to what the Australians have just put in place.

The immediate issue for hotels is rates.

"So we're pleading to the local councils to put rates, to actually put them on hold," Ms White said.

New Zealand's motels and hotels employ 40,000 people. In Queenstown, many of workers are from overseas.

Queenstown-based economist Benje Patterson has been tracking the potential economic and human fallout.

"There are many people that come for a season, they do many of the jobs others don't want to do, after lockdown we could have a humanitarian crisis," Mr Patterson said.

"This is the opportunity to save New Zealand to help spend the kids’ inheritance that's going to be the key to our survival," he said.

"We're really going to rely on the domestic tourism and it's actually going to be the moteliers who are going to be part of that recovery process,” Ms White said.

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