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The Scenic Hotel Group is considering temporarily closing one of its two Dunedin hotels and has mothballed two on the West Coast as the chain’s finances take a hit from the Covid-19 pandemic.
General manager Brendan Taylor said Te Waonui Forest Retreat in Franz Josef had been closed for the past three weeks and Heartland Hotel Glacier Country in Fox Glacier had been closed for more than a month.
He said the group was now looking at Dunedin’s two hotels — Scenic Hotel Dunedin, in Princes St, and Scenic Hotel Southern Cross, in High St.
However, he said a decision had not yet been made about which hotel would be mothballed.
“The problem we’ve got is that we’ve got more than 300 rooms between the two hotels in Dunedin. There’s no way the domestic market is going to come back to fill up 300 rooms.
“So we’re now going through all the options — just trying to see if there are any other business models out there that would allow us to keep them both open.
“As an example, we’ve made a few inquiries around the hospital rebuild.”
He said it might be possible to change one of the Dunedin hotels into a facility that
could accommodate the increased workforce.
Mr Taylor said the group had 17 hotels across New Zealand. Only the hotels at Franz Josef and Fox Glacier had been mothballed at this stage.
“The issue that the industry has is that if we can’t get Australia’s borders open, we’re not going to have any overseas people this summer and we’ll have to live off the domestic market.
“So then you have to get real about how much volume there is in the domestic market and how much business they can provide into the provinces.”
Even with the wage subsidy, he said the group was losing about $100,000 a week across all of its hotels.
The company also still had to pay millions of dollars in council rates and power bills for its closed and near-empty hotels.
Mr Taylor was optimistic the mothballed hotels could be reopened before the end of this year, if the Government continued its wage subsidies.
“As soon as we see a turn and indication in volume, we’ll be open again.”