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However, the company, the Scenic Hotel Group, is not yet ready to say if it will try to oppose any development endorsed by the Dunedin City Council.
The council has called for expressions of interest to build a "high-quality hotel complex'', having facilities "normally associated with a five-star hotel'', on the Filleul St car park site opposite the Dunedin Town Hall.
Council staff said yesterday there were continuing indications of interest, and formal expressions of interest were expected to follow before the December 6 deadline.
The council was also part of the waterfront development plan, which envisages a five-star hotel - built by the private sector on the southern side of the Steamer Basin - as part of stage two of the revitalisation of the wider area.
The Otago Daily Times was told yesterday that during a briefing for city councillors last week, Dunedin Venues had also again floated the idea of a hotel development on the site of the Forsyth Barr Stadium car park.
Scenic Hotel Group managing director Brendan Taylor said yesterday his company had been watching developments in the Dunedin market "with interest'', but had no plans to pursue a five-star hotel in the city.
The company already owned two hotels - the Southern Cross and Dunedin City - which together offered about 300 beds, and would not be lodging an expression of interest in the Filleul St site, he said.
Instead, he predicted the development of a new five-star hotel would prove to be a mistake, as visitor numbers from China dipped and occupancy rates at his company's Dunedin hotels dropped slightly, he said.
"We have the ability to [redevelop] either of our products into a five-star product, if we wanted to, but we just don't believe the market is there for it at the moment,'' he said.
Asked if the council's move was therefore a mistake, Mr Taylor said: "Yeah.''
"We believe it's too early.''
Mr Taylor would not say whether his company would oppose any new five-star development on the Filleul St site.
"I don't know, until we actually see that,'' he said.
It was the kind of tactic criticised previously by Tekapo businessman Anthony Tosswill, whose own hotel plan for the Filleul St site was declined resource consent in 2017.
His project had faced opposition from Millennium & Copthorne, which owns the neighbouring Kingsgate Hotel, and nearby landowner Misbeary Holdings Ltd, which had links to the Scenic Circle Group.
The opposition prompted Mr Tosswill to say any future hotel bid would be "futile'' while two opposing hoteliers were allowed to stand in the way of development.
Yesterday, Enterprise Dunedin director John Christie said the council's aim was to encourage a wider range of accommodation in the city and expand the overall visitor market, rather than "just shuffling people from one hotel to another''.
The expressions process was an attempt to be "as open and transparent and as fair as we can be to a number of developers who have been interested in that site''.