Doubts expressed over hotel viability

It will take much more than major events to make a hotel at Dunedin’s Forsyth Barr Stadium viable, hotel operators say.

Any operation there will have to sustain visitor numbers day to day and have sufficient appeal to the domestic business market, they have pointed out.

Dunedin Distinction Hotel general manager Andrew Duncan said market conditions did not appear to be conducive to establishing a new hotel.

However, it would be good for Dunedin to have another good hotel, he said.

Scenic Hotel Group area manager Richard de Graaf said a business case for a new hotel could not be built on five events a year.

Dunedin Stadium Property Ltd, which owns Forsyth Barr Stadium, has called for expressions of interest about building a hotel, multistorey car park, sports bar, commercial office space and revamping the stadium entrance.

Land around the stadium could be leased or sold to developers.

Dunedin City Holdings Ltd chairman Keith Cooper said there were no plans to use ratepayer money for the venture.

DSP is one of the companies in the DCHL stable, owned by the Dunedin City Council.

Mr Duncan said conferences at the stadium could be an area of opportunity if a hotel was able to extract enough benefits from them.

This could be a possible point of negotiation.

The Distinction group had recently bought Dunedin Leisure Lodge, which is within walking distance of Forsyth Barr Stadium.

‘‘Dunedin does well because of its domestic business base,’’ Mr Duncan said.

Among market uncertainties were the lingering impact of Covid-19 and how New Zealand’s border would operate.

Mr de Graaf said the creativity of the council-owned company was admirable and any investor would examine what could be achieved longer term.

The University of Otago has several facilities at or near Forsyth Barr Stadium, including a gymnasium.

Acting vice-chancellor Prof Helen Nicholson said the university had campus master plans covering future accommodation needs.

‘‘We agree that there is a need for increased hotel accommodation and parking in Dunedin and we are willing to work with partners on future development at Forsyth Barr Stadium.’’

Liquigas has in the past raised concerns about the potential for visitor accommodation to be sited near its LPG storage terminal at Fryatt St.

A company spokesman said the proposed developments were not close enough to the storage terminal to cause concern.

Dunedin Mayor Aaron Hawkins said in a social media post he had no interest in the city council becoming a hotel developer, directly or indirectly.

The deadline for expressions of interest is August 31.

grant.miller@odt.co.nz

Comments

No worries.
Let's build it with the DCC carrying the risk, like they did with the Stadium.
I'm sure the RATEPAYERS WON'T MIND.

I believe doubts were expressed about the financial viability of building the stadium including the non participation of private investors but that didn't stop the council from 'building it anyway'. How we all shiver (literally as we turn down the electric heating) at the memory.

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