HOTEL INDUSTRY ECONOMICS

Press, Volume XCIII, Issue 27911, 7 March 1956, Page 12

HOTEL INDUSTRY ECONOMICS

Provision Of More Accommodation

SUGGESTED PLAN OF INCENTIVES (New Zealand Press Association) WELLINGTON, March 6. Measures by which the hotel industry’s profit on the sale of liquor and loss on accommodation might be balanced, to encourage the provision of accommodation, were suggested by the Licensing Control Commission today by counsel assisting the commission, Mr H. R. C. Wild. These included:— (1) Removal of price control and other restrictions on the construction of new hotels; (2) Reclassification of “beer houses’’ which, for geographical reasons, had no demands for accommodation, so that they could operate as lock-up saloons and pay a charge on liquor to the accommodation houses; and (3) Contributions <.o the accommodation sid'' of the industry from wholesalers.

At the end of an inquiry, which lasted four months. Mr Vvild told the commission (Mr A. M. Goulding, chairman, and Mr L. C. Nisbet) that the trade had approached the problem in a disappointingly negative way. The National Council of the Licensed Trade merely asked for decontrol and, if that tailed. Government assistance. The wholesalers acted almost completely on the defensive, and here again no positive, constructive suggestions for the trade as a whole were forthcoming, said Mr Wild. The greatest assistance had been received from a group of independent hotel proprietors, who had shown a realisation of their responsibilities. Balancing Hotel Operations

The last of six questions on the order of reference was the main one. Mr Wild said. This asked what steps should be taken by legislative or other means to ensure a proper and more equitable balance between earnings derived from the sale of liquor (both wholesale and retail) and those derived from the provision of accommodation, so that there would be greater encouragement for the provision of accommodation.

The trade recognised that, through the system of licensing, it had a form of protection with which went responsibilities, said Mr Wild. It was too late now to divorce the sale of liquor from the provision of accommodation, and it might be said that all licensees must share the responsibility of providing accommodation. There was a geographical reason for the need for the trade as a whole to face this responsibility, said counsel. “In parts of New Zealand, the obligation of providing accommodation is a legal one only, and in practice amounts to nothing,” he said. “Many hotels are rarely troubled by a guest.” But in these areas there was still the need for a bar service, said Mr Wild, and it was not the fault of licensees that their business was so dissimilar trom that of the accommodation man who operated under exactly the same licence and conditions —one made the profits; the other shouldered the burden. “This licensee without accommodation worries is so far removed from the innkeeper that he becomes no more than the proprietor of a lockup saloon,” Mr Wild said. “Would it not be wiser to recognise him for what he is, alter the law to fit the facts, and make his hotel a drinking saloon?” Contribution to Accommodation There was a case for imposing a charge on liquor sales made in such establishments, and using this income to assist the accommodation houses, said Mr Wild. It would involve a major change in the laws, but separate bottle stores and bars were operated by the trusts. Recognition of this situation would help the beer-hotel in conducting its affairs: it would save the face of the law in a farcical situation; it would squash high goodwills and obtain contributions for the struggling accommodation houses, said counsel. A levy-bounty system for correcting the balance had been regarded with suspicion or outright condemnation. the fear of the trade apparently being that the Government would be the agent through which a liquoi' tax would be imposed, Mr Wild said. Bid this charge on liquor to pay for accommodation could pass through the hands of the trade itself, or of the commission. The proposal was worthy of full examination, rather than being discarded out of hand as a bureaucratic idea of doubtful parentage.