State Finance For Hotels Explained

Press, Volume CII, Issue 30227, 4 September 1963, Page 19

State Finance For Hotels Explained

Hilton Hotels do not build hotels; they manage them under an operating agreement after someone else has secured the finance and built the hotel, according to the Minister in charge of Tourist and Health Resorts (Mr Eyre).

The Minister made this comment in reply to a letter to the editor of “The Press,” in which “Hiltonite” asked why the Hilton organisation was not allowed to build a £1,330,000 hotel in Christchurch.

In his letter “Hiltonite” said: — "I challenge the Prime Minister or any one suitably qualified to tell us South Islanders why the International Hilton Corporation was not allowed to build a £1,333.000 hotel at Christchurch. when the Government of New Zealand states that it is very anxious to promote tourism and consequently improve our overseas currency reserves. If the reason is that ‘the financial conditions were not acceptable to the Government,’ then it is to be assumed that economically we are not as sound as such countries as Spain. Persia. Mexico, etc., where Hilton hotels are flourishing or being constructed. This illustrates the Government’s apathetic approach towards the wellbeing of the South Island.” No such proposal had been put to the Government or himself, said the Minister in his reply.

“The position is that the Government hotel finance scheme is administered by the Tourist Department in cooperation with the State Advances Corporation and the Treasury. Naturally, there is a set formula requiring certain minimum

financial obligations. "I am informed that preliminary proposals were received from an overseas construction company which was interested in building a 300-bed hotel art Christ - church. The financial arrangements offered were not acceptable as they did not come within the minimum terms of the Government hotel finance scheme. “This was referred back to the company for further consideration and the company was invited to submit a further application within the framework of the Government finance scheme. A report is expected soon and it is still possible that the company may submit acceptable proposals. Redaction For S.I.

“The basic terms of the Government scheme apply equally to South Island projects as to those received from the North Island. In feet, far from being apaithetic to the wellbeing of the South Island, as claimed by your correspondent, the Government recently reduced the

minimum number of beds required for Christchurch to 100 beds and for Dunedin to 70 beds, whereas the minimum requirement for Auckland and Wellington is 150. “This would indicate to any fair-minded person that the Government is particularly interested in seeing accommodation built in Christchurch and in Dunedin and there are indications that this policy will soon promote additional proposals for new Christchurch hotels. Further, die Government is building two new hotels in the South Island —Wanaka and Franz Josef,” Mr Eyre said.