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But Mr Cull hit back last night, claiming all Dunedin accommodation providers would win if the city could guarantee potential visitors the facilities they were demanding.
The initial criticism of Dunedin's hotel accommodation stemmed from a delegate to a Tourism Export Council in the city.
Mr Cull responded to that criticism, and said he wanted increased quality accommodation in the city, and planned to attract investment or promote the city as a site for such development.
Scenic Hotel Group executive director Lani Hagaman said in a statement yesterday the Scenic Hotel Southern Cross, had a 4.5-star rating, and the Scenic Hotel Dunedin City had a 4-star rating.
''For Mr Cull to weigh in with these comments, especially when a new 120-room hotel is about to open, is not only incredibly short-sighted, but seems to show a complete lack of knowledge about what is happening in the city he is leading.''
The Distinction Hotel in the former Dunedin chief post office was expected to open in October.
There was not enough hotel occupancy in Dunedin to justify courting others, and doing so would have wide-ranging negative effects for the entire accommodation sector, not just hotels, she said.
''If more hotels were to come to Dunedin, without a major increase in occupancy which will not come about unless the council focuses on promoting the city as a destination, it would spark a price war.
''I would suggest Mr Cull's time, energy and focus, as well as council funds, would be better spent on bringing in more events and building the regularity of large conferences.''
Mrs Hagaman's statement included comment from Jeff Staniland, the chief executive of Queenstown-based Skyline Enterprises, which owns the Mercure Dunedin Leisure Lodge, and Scenic Hotels director Stuart McLauchlan.
Mr Staniland said Mr Cull seemed to be implying the quality of Dunedin's hotel offering ''wasn't that great, and I disagree completely with that''. Mr McLauchlan said Mr Cull showed ''a complete lack of local accommodation sector knowledge''.
Roslyn Apartments manager Donna Suszko also contacted the Otago Daily Times, and said she was ''just incredibly disappointed'' by the comments she read.
Mr Cull last night said he stood by his comments.
It was not council's job ''to sacrifice the wellbeing and growing prosperity of the whole city for the enhanced profits of a few operators''.
The city was becoming increasingly attractive to Chinese tourists who demanded a level of accommodation Dunedin struggled to offer at present, he said.
Added to the tourism needs, there was already a lack of capacity in Dunedin to accommodate big events, he said.
The city's perceived inability to accommodate the thousands of supporters expected for the 2017 Lions rugby tour had scuppered Dunedin's chances of hosting a test.
''The bottom line is it's called the free market. And what I have to do is put the wellbeing and the growth of Dunedin ahead of the interests of a small number of operators who want to maintain a stronghold.''