Company takes hit as hotel reopens

Scenic Hotel Southern Cross senior receptionist Sheena Ragasajo issues a room key in central...
Scenic Hotel Southern Cross senior receptionist Sheena Ragasajo issues a room key in central Dunedin on Monday. Photo: Shawn McAvinue
The Scenic Hotel Group has reopened one of its two Dunedin hotels – a move costing the chain about $70,000 a month.

Group general manager Brendan Taylor said its two hotels in Dunedin – Scenic Hotel Dunedin, in Princes St and Scenic Hotel Southern Cross, in High St – were closed when the Covid-19 pandemic hit.

Southern Cross opened when the nation entered Level 2 on May 14 and the other hotel remained closed.

A financial forecast revealed if the chain opened both hotels in summer, they would both lose money, as they competed against each other for guests.

The goal was to get the Southern Cross hotel “back into a break-even” situation.

“At the moment, she’s costing us $60,000 to $70,000 a month to run because of the overheads and the staff – if you duplicated that into two hotels – it’d be $140,000 [loss] a month.”

The decision to reopen Southern Cross was to “regrow” a traditionally strong market.

“If we didn’t open the booking engines and hold on to enough staff to provide a service – it would be very difficult to grow the market back.”

Since reopening, Southern Cross was running at “minimum staffing levels”.

Before the pandemic hit, the group employed nearly 800 staff across New Zealand.

Now staffing levels had been reduced to about 140.

“We are still losing a truckload of money.”

In summer, up to 60% of its guests in Dunedin were international visitors.

“We were lucky we got January, February and most of March but then it was like a tap being turned off.”

Since reopening Southern Cross, guests had stayed in the hotel and bookings had been made for late winter and early summer, he said.

Scenic Hotel Dunedin would remain closed, he said.

“We will need the Australian borders to open before we would consider reopening her again, unless there is another opportunity for us to remodel the hotel into something else, such as accommodation for the Dunedin Hospital rebuild.”

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