Hotel forecast gloomy

Press, 14 August 1980, Page 7

Hotel forecast gloomy

PA Auckland . The small growth in New Zealand, tourism can be blamed more on an inability of international airlines to attract tourists than on a shortage of hotel rooms in Auckland, according to the chairman of Vacation Hotels, Ltd, Mr J. R. Sheffield. An expansion of hotel accommodation was difficult to contemplate in current terms, he said in his ' interim annual report. Hotel occupancies in Auckland 'remained sluggish and, with new developments just completed and in the course of construction, there was little likelihood of any desperate shortage of hotel rooms in the foreseeable future. :

The decisions of responsible institutions, after full investigation, not to proceed with hotel development in Auckland was a warning to those who seemed determined to proceed with the erection of still further hotels.

At 17.5 per cent (the present Development Finance Corporation rate on advances for hotel construction) and based on a room cost of $65,000 and an occupancy rate of 65 per cent, a tariff of $4B was required to cover interest charges alone before any account was taken of running expenses. Vacation Hotels increased its profit by $2506 to $590,996 in the six months to April 30.