HOTEL TARIFFS AND BARS

Greymouth Evening Star, 18 September 1945, Page 8

HOTEL TARIFFS AND BARS

WELLINGTON FIGURES. , ‘ WELLINGTON, September 15. If the Hotel Waterloo, Wellington, were unlicensed and the space now used as bars was let as- shops it would be necessary to charge a tariff of £2 a day, instead of £l/7/6, to pay a dividend of 5 per cent., said Mr. Bernard Thomas O’Connell, assistant general manager and secretary of New Zealand Breweries, Ltd., in evidence he gave to the Royal Commission on Licensing yesterday. Tn the 12 months ended March 31, 1945, there was a loss of £496 omthe house and a profit of £12,975 on the bars, the net profit of £3657 shown after taxation had been deducted, being a return of 2.36 per cent, on the investment.

Witness compared the figures for 1945 with those for 1939, when the house made a profit of £4367 . and the bars a profit of £11,034, and the net profit after taxation deduction was £7591, giving a return of 4.90 per cent, on the investment. The tariff had not been altered over those years. The average cost of victuals for each guest meal served had increased from l/9.3d in 1940 to 2/10.33 in 1945. To show the same return per guest in 1945 as in 1939 the daily tariff would have had to have been just over 3/6 higher. Witness- quoted also figures lor the Empire Hotel, Wellington, showing in 1939 a loss of £474, made up of a loss on the house of £4138 and a profit on the bars ol £3664. In ‘1945 the profit in the bars was £8657 and the loss on the house £5933, leaving a profit of £2724, which after taxation had been deducted gave a return of less than 1 per cent on the investment. The average return in 1943 on investment was 3.2 per cent, for the 17 freehold hotels of the company, said witness. Managers of hotels run by the com-pany-were paid between £8 and £l5 a week with an allowance to cover hospitality, and they received ■free quarters and food. They were instructed that legal trading hours were to be strictly observed, and no incentive was given to depart from the instruction. Asked by Mr. J. D. Willis, counsel assisting the Commission, if it was desirable that there should exist houses which provided negligible accommodation for the travelling public, witness replied that if every hotel in Wellington provided a, considerable amount cl accommodation none would pay at all. He said he thought that the type of hotel which provided only sufficient accommodation to conform with the law should continue to exist in certain districts where other hotels provided accommodation, such as the cities. Asked if the company would be prepared to carry on business as a brewer only, witness said the company would prefer to carry on as at present. It had originally been intended as a brewing company, but had Embarked on the policy of conducting hotels because of the actions of another company’. , . _ Answering the chairman, Mr. Justice Smith, Mr. O’Connell said that he believed the main cirticisms of the licensed trade which had led to the setting up of the Commission were based on the price of beer, the public failing to realise what a large proportion of the price was tax, and on the restrictions with whicn the trade was hedged. In England, where he had lived five or six years, and on the Continent, people were better in the consumption ol liquor, and he thought that the outlook of people in New Zealand resulted from the restrictions. Trie distribution of licences also was a cause of dissatisfaction, certain sections ol the public feeling that they had not fair access to the commodity. He hau not heard from members of the public the criticism that the retailer was forced to trade alter hours because ol the price he had to pay for his Premises and liquors. His company nad never paid excessive goodwills.