The New Zealand Government is threatening to force hotels to close, after the industry warned of the looming risk of a “black hole” that would consume $500m a year from their revenue streams.
The Government is expected to propose a new law that would allow the Government to “exercise its statutory powers” to force out the industry through the courts.
The new legislation will likely be referred to the High Court.
The industry has been lobbying hard for the Government’s intervention, with one industry executive claiming it could mean the end of “a $500 million annual industry” if the Government did not act.
In a letter to the Minister for Industry, Industry Minister Rob Stokes said the Government was taking “immediate action” to protect “our most valuable asset”, the New Zealand Hotel Industry.
“This is why we need a safe, secure and affordable environment,” the letter states.
“If the Government does not act, we will have no choice but to act ourselves.”
The Government’s new law could have “potentially devastating consequences for our industry”, the letter said.
The proposed legislation would mean that the Government could force hotels and guest houses to close if it was not “in the public interest” to do so, or if a property was deemed to be “unfit to serve” as a hotel.
A recent report commissioned by the Ministry of Business, Innovation and Employment (MBIE) suggested the industry had a shortfall of $500,000 in its “maintenance and servicing” accounts, which is expected for an additional $400,000 a year.
Mr Stokes would not comment on the figures, saying they were not “relevant to the current or foreseeable circumstances”.
But he said the current “relatively low” hotel occupancy rate was a “real risk” of “devastating and long-lasting consequences” for the industry.
Mr Blum said that the Ministry would now take “imminent action” against the industry if it did not comply with the proposed law.
“We have to recognise that these things are happening.
They are taking place because of the fact that we are having this crisis.
That’s not just us, that’s other countries and other countries around the world,” he said.
Mr Blums statement came as part of a submission by the Hotel Industry Association (HI) to the Government, seeking to have the Government amend the legislation so that hotels could close if they were unable to meet occupancy rates. “
That’s why I think the Government has to be really careful and really vigilant in what it is doing.”
Mr Blums statement came as part of a submission by the Hotel Industry Association (HI) to the Government, seeking to have the Government amend the legislation so that hotels could close if they were unable to meet occupancy rates.
Hotel occupancy rates were at record lows in 2015, with the industry forecasting that the industry would have a “further reduction” in revenue by 2023, if the legislation was not amended.
“The Government has taken some steps to address some of these issues,” said Mr Bluns.
“It is looking at ways of ensuring that we can continue to provide quality accommodation, but also in terms of maintaining our occupancy rates.”
In response to the HI’s submission, Mr Blumen said the industry’s main focus had always been on the tourism sector, and the Government should not have to act to ensure it was profitable.
We just don’t see the point of the Government acting on this issue now, if it is not in the public interests.” “
There’s a lot of things that are happening that need to be looked at.
We just don’t see the point of the Government acting on this issue now, if it is not in the public interests.”
In a statement, the Hotel & Tourism Council (HTC) said that it was “disappointed that the Minister has decided to move forward with the introduction of legislation to force the industry to close”.
The Government said it had not considered any of the concerns raised by the industry, but would continue to work with them to ensure that hotels continued to provide “world-class hospitality”.
It said the new legislation would not “remove the threat” of black holes that would engulf the industry and lead to “significant financial losses”.
The Minister for Tourism, Tourism, Sport and the Marine, Simon Bridges, said the legislation “would not allow the hotel sector to continue operating as normal”.
“We would encourage any hotels to reconsider their decision to continue to operate as normal, if they are satisfied that the risk of black hole is less than the risk to the industry as a whole,” he wrote.
A spokeswoman for the Ministry said the law was designed to ensure “a safe and secure environment for guests”. “
In order to ensure the industry has the appropriate level of protection and security to withstand the impact of a black hole, we would also like to make clear that we do not consider the Government is seeking to restrict our ability to do business as normal.”
A spokeswoman for the Ministry said the law was designed to ensure “a safe and secure environment for guests”.
The Department of Business said