Friday, August 29, 2008

Air NZ Requests Further Corporate Welfare

Please sir, can we have some more... public money?

Not content with the public's forced capital injection and ownership, Air New Zealand has requested that the public further subsidise its marketing programme.

28 August 2008

Air New Zealand is calling on the government to increase its commitment to tourism in the face of softening global demand and travellers’ growing environmental consciousness.

Air New Zealand Deputy CEO Norm Thompson says it is critical that the New Zealand government acts now to protect the country’s market share given the slowing growth in tourism.

Visitor arrivals to New Zealand have grown less than 1% in the past 12 months and are forecast to grow at just over 3.3% through to 2014.

Mr Thompson says the government needs to prioritise the sector and ramp up the funding to market New Zealand offshore.

The $73 million in annual government funding to Tourism New Zealand to market New Zealand as a visitor destination overseas is not enough to stimulate growth beyond the forecast figures, he says.

“Tourism generates approximately $8.3 billion dollars in foreign exchange for New Zealand – a substantial return on each dollar invested by the government through Tourism New Zealand and businesses such as Air New Zealand. We have the opportunity to significantly increase these earnings through greater Government investment in the industry.”

Mr Thompson says Air New Zealand invests tens of millions of dollars promoting New Zealand offshore and in recent years has taken a leadership position in opening up new tourism opportunities, launching direct services into Adelaide, San Francisco, Shanghai, Vancouver and Beijing, and doubling its capacity to London through its Hong Kong service.

“The industry needs additional government funding to boost New Zealand’s profile in key offshore markets, expand the scope of promotional activities and focus on new emerging markets.”

Mr Thompson says the tourism industry is critical to New Zealand’s economic prosperity and transformation. As the single largest exporter in the New Zealand economy, it contributes 9% of our GDP and employs one in ten Kiwis. As the national carrier, Air New Zealand’s fortunes are inextricably connected to the growth of the tourism sector

Air New Zealand is receiving world-wide recognition of its commitment to reducing its environmental impact, and Mr Thompson says there should be a heavy focus on promoting New Zealand’s environmental initiatives and commitments.

“New Zealand provides a unique destination based on our diverse environment and clean green image. Our attractiveness as a tourist destination can only last as long as our reputation as one of the most environmentally friendly nations stays intact. We need a coordinated national approach to the environment that enhances our 100% Pure positioning and delivers on our visitors' expectations of one of the cleanest, greenest countries in the world,” he says.

“If New Zealand Inc is to continue to prosper, to grow our exports, to encourage investment in New Zealand, and to raise our position in the OECD rankings, then it is vital that we continue to market ourselves successfully to the world.”

NZ Defies Global Search Trends

Friday, 29 August 2008

Fresh research reveals that New Zealand’s online advertising industry is marching to a different beat, potentially creating major opportunities for savvy marketers prepared to buck local trends and embrace search engine marketing and optimisation.

A new study from IAB New Zealand and Pricewaterhouse Coopers shows that Kiwi marketers are putting most of their online dollars into classified and display advertising.

This defies global trends where search engine marketing – through the likes of Google - heads the online pack. Optimising websites for high search engine rankings is also very big in larger online markets.

IAB figures show Search leads online advertising spend in Australia (46% share) the United Kingdom (57% share) and the United States (41% share).

Yet in NZ, the IAB study shows that Search and Directories had just 25% of the country’s online ad market share during the June quarter, while classified had 44% and display 31%.

Why is NZ so different? Theories abound, mostly centred on complacency in both the business and advertising sectors, combined with a lack of online sophistication.

Jon Ostler from First Rate says: “NZ has always been a bit behind the curve with online advertising generally. For example, publishers have only just introduced rotating ads rather than fixed tenancies.” But according to Ostler, this lack of maturity means there’s a “massive opportunity” for NZ businesses prepared to embrace Search Marketing and Optimisation.

He says the cost of search engine advertising in NZ is currently half the cost of other markets. “The reality is at this stage that NZ is not a very aggressive search market apart certain categories such as travel.”

But Ostler warns that the door won’t be open forever, and the IAB agrees, forecasting that Search will grow the fastest of all on advertising categories in NZ.

Wednesday, August 27, 2008

Emissions Trading Legislation Will Hurt

Press Release
Greenhouse Policy Coalition
26 August 2008

News that the Green Party has pledged its support for the controversial emissions trading legislation should be ringing alarm bells amongst all consumers of energy, according to the Greenhouse Policy Coalition.

Catherine Beard, executive director of the Greenhouse Policy Coalition says the emissions trading legislation before Parliament, due to its comprehensive coverage and lack of price safety valves, will be the highest cost scheme in the world.

"Unless the scheme is modified to allow for a more gradual exposure to the price of carbon in the economy, it is hard to see how the legislation will survive once the price shock flows through to consumers."

"The Green Party is claiming they have made the scheme even tougher than it was previously, which should ring alarm bells for the public."

"While Minister David Parker promoted the emissions trading scheme as being affordable at a price of $15/tonne of carbon, the international price of carbon has long since gone into the stratosphere and is now in the $40-50/tonne region - making this a high price to pay once those costs are passed through to every tonne of carbon associated with fuel and electricity."

Catherine Beard says while the Green Party claim there will be concessions in the form of making homes more energy efficient, it is hard to see how lagging hot water cylinders and token support for solar hot water heating is going to offset the average price increase of around $600 per annum per household, once all the costs of increases of electricity, fuel and biofuel are added together.

Catherine Beard says it is hard to imagine any other country introducing a scheme which will increase the price of energy to businesses, households and food producers, with so little concern about the impact it will have on the basic cost of living or the number of jobs that will be lost.

"This is a major economic reform, and the time should be taken to make sure the end result for New Zealand is not just a loss of business to other countries that fail to tackle this issue with similar stringency to New Zealand."

A View of Analysts' Expectations for EU ETS Phase II (2008-12) &III (2013-2020)

Source: World Bank - States and Trends of the Carbon Market 2008


Sci-Fi Surcharge No Match for the Sun

SOLO-NZ Press Release
August 25, 2008

"Our decaying, corrupt Labour Party's last gasp, with any luck, will be their 'Emissions Trading Scheme,' says SOLO spokesman Greg Davis.

"For this crackpot scheme to proceed they await Winston Peters' tinpot, populist NZ First Party's parliamentary votes.

"Clark has talked tough on 'climate change,' her only religion, and had her Rudd-awakening from the other equally gullible Labour Prime Minister in Oz.

"She's taking a gamble which will prove her downfall. Londoners were not fooled — Ken Livingstone's measures in the name of combatting 'climate change' assured his exit.

"Warmists (along with the productive intelligent populace) will be forced to put our money where their mouth is, if this 'Emissions Trading Scheme' is enacted. It is being sold by the Greens' leader with the bribe of a monstrous money-go-round to compensate her voting block with rebates for foreseen increased energy charges.

"Well, that's great news, isn't it kids?

"The consequences of the scheme are more alarming than the 'climate change' scares we daily endure. All legislation based on the false premise of human-caused planetary warming is a crock. The government is acting on long-discredited science from the nineties.

"They'll force up all prices – you'll pay out more money – and they'll pass some of it back your way.

"If you believe putting more money with the government will help the planet, you surely have a death-wish. Like other government regulations it will cause a multitude of adverse effects.

"The end result of this emissions scheme will not be a healthier planet. Humanity has insignificant impact on average global temperature. Trillions of dollars are no match for the sun.

"Only profits generated by productive enterprise have a hope of success as a remedy to real pollution. Instead the government intends to knee-cap business with a sci-fi surcharge.

"Only a resounding electoral message sent back to these parliamentarians may persuade the equally catastrophic National party to rescind the bill,” Davis concludes.

Greg Davis

SOLO (Sense of Life Objectivists)

"Environmental report card from travellers positive"

The Labour Party's obsession with environmentalism seems to be well embedded into the Ministry of Tourism.

Monitoring tourists' environmental perceptions with stilted surveys are returning obvious results that are being used to justify centralist planning.

The latest revelation is that, "86 percent of those surveyed would choose an environmentally friendly option over an alternative, as long as other factors such as price and convenience were not compromised". - No kidding!

The best thing that the Ministry of Tourism can do for the tourism industry is to reduce tax, regulation, compulsion and bureaucracy...

Damien O'Connor
Press Release
27 August 2008

The majority of international and domestic travellers say New Zealand’s six top tourist regions show sound environmental management, Tourism Minister Damien O’Connor said today.

Mr O’Connor today released the Ministry of Tourism’s Regional Visitor Monitor (RVM) which shows 46 percent of respondents thought the six regions’ environmental management was ahead of most other countries and 95 percent considered it to be at least as good as others.

“These outcomes show New Zealand is still considered by travellers to be world class environmentally. However, there is no room for complacency, there is still work to do to lift our game and match our 100% Pure New Zealand promise.

“As it is our environment that underpins our 100% Pure brand, we need to take credible and visible steps to reduce our environmental impact and improve our environmental management,” said Mr O’Connor.

The research also showed that 86 percent of those surveyed would choose an environmentally friendly option over an alternative, as long as other factors such as price and convenience were not compromised.

“The New Zealand Tourism Strategy 2015 highlights the need for the tourism industry to take a leading role in protecting and enhancing the environment. This includes goals to understand the environmental aspirations of our current and future international visitors, and how they view our environmental management.

“This research provides a valuable baseline measure from which we can monitor changes in tourists’ environmental attitudes over time,” said Mr O’Connor.

“Monitoring tourists' environmental perceptions is part of a wider set of government initiatives designed to encourage operators to tangibly improve their environmental performance. The government has committed $840,000 under the Sustainable Tourism Advisor in Regions (STAR) project for nine regions to employ advisers who will work one on one with tourism operators to help reduce their business’ impact on the environment. Also, the new Qualmark Green criteria means licence holders now have to meet minimum environmental standards as part of their quality accreditation assessments,” said Mr O’Connor.

The RVM is a survey undertaken in six regions. It is done in partnership between the Ministry of Tourism, Tourism New Zealand and Regional Tourism Organisations in Auckland, Rotorua, Wellington, Canterbury, Queenstown and Dunedin.

The survey gathers information on visitor profiles, visitor motivations and expectations, travel planning and patterns of visitor activity, visitor satisfaction, and visitor expenditure, all at a regional level. See full report at Marks First Birthday

Sydney, NSW, Australia (PRWEB)
August 26, 2008

Leading accommodation booking website has launched a multi million dollar advertising campaign harnessing the collective powers of online and offline marketing.

Leading accommodation booking website has launched a multi-million dollar advertising campaign harnessing the collective powers of online and offline marketing. CEO Chris Dodd said the campaign marked an exciting phase of development for the company which celebrated its first anniversary only last month.

The $10 million media strategy includes:
  • $6 million outdoor (billboards & transit)
  • $2 million docket / voucher
  • $1 million print
  • $1 million online
Mr. Dodd said the campaign highlighted the flexibility required in meeting the challenges within a market undergoing exponential growth. "As a new company we have learned so much, so quickly that we have had to look outside our business plan and adjust our strategy along the way," Dodd said
"The challenge has been to harness the power of both online and offline marketing channels and integrate them seamlessly," Dodd continued. "Online channels, particularly search engines, are the most efficient at generating new customers while our branded media campaign builds repeat business into lifetime customer value and keeps travel top of mind."

Media enquiries:
Chris Dodd, CEO
(07) 5582 1121

Monday, August 25, 2008

Election Day - October 18th ?

One positive about the Olympics was the rest from the daily grind of politics in the media. The focus is now on political matters and it appears likely that we will have an election within eight weeks - let the real games commence!

Put a circle around October 18th as the most likely election date that Miss Clark will announce within the next few weeks. News today revealed that the gap between National and Labour is narrowing. Tax cuts due on October 1st should produce a "feel-good” factor that Labour would wish to capitalize on.

As business owners, we should be considering the party that offers us the, regulation, compulsion and bureaucracy!

We found the following party political broadcast amusing:

Saturday, August 23, 2008

Monitoring and Responding to Internet Feedback about Your Motel

There is a growing phenomenon of websites that publish feedback from gusts that stay at commercial accommodation, including motels. Web-cred is of increasing importance as a motel's consumer rating is being formulated and exposed to the world by guest reviews. Past guests are more than happy to share accommodation experiences and future potential guests are using these reviews to determine their accommodation choice.

The importance of your motel's on-line consumer "rating" will soon outstrip rating systems such as Qualmark. The Internet not only is making the traditional "Agent" redundant, but will soon be threatening traditional quality assurance programmes. In the very near future, it is conceivable that a motel's "star rating" will be solely determined by on-line reviews. This is daunting territory for many motel owners as the reviewers' data is raw, live and very pointed... who can argue with the adage that the customer / market is always correct!

It will become increasingly important for moteliers to monitor the Internet chatter on social media sites and networks surrounding their motels.

How can you monitor on-line guest feedback and comments? The answer is simple, easy to set up and FREE! Google Alerts provide email updates of the latest relevant Google results based on your choice of query or topic. Your motel name (and variants of) should be entered into your Google Alerts. Google is the most comprehensive search engine that now indexes the whole blogosphere and consumer-generated sites.


It's common knowledge that the Internet has changed how travel consumers perceive the credibility of information. Any discrepancy between "official" and "unofficial" content should be dealt with immediately. A motel has to stand by its product and service, but cannot ignore the “popular vote” for its product’s quality.

Research has shown that consumer-generated content on social media sites and networks is perceived as more credible by online travelers. The bigger the disparity between official and unofficial content, the bigger the gap in credibility.

Social Media (Consumer-Generated Media) is online content created by Internet users and made available to other Internet users via Web 2.0 interactive technology applications. Motel/hotel review sites such as are part of the Social Media phenomenon.

  • 38% of US Internet users (72 million) use a social media site at least once a month
  • 89% of US Online Buyers read customer reviews before they buy - 43% most of the time, 22% always.
So what are the most important motel / hotel-related customer review sites? There are only a handful that the majority of travel reviewers’ visit:
  • TripAdvisor receives over 30 million visitors every month. The hotel can actively respond to any customer review via the 'Hotel Owner's Page' by using the link located at the bottom of the page with customer reviews and then clicking on the 'Respond to a Review' link.
  • Expedia is the largest online travel agency (OTA). Currently the hotel can monitor all of Expedia's customer reviews, but cannot actually respond to a review.
  • Google is the largest search engine with 60% of search traffic in the United States, and more than 75%-80% of traffic in Europe. Google provides a sampling of reviews for each hotel from TripAdvisor and other review sites (type in the hotel name + location, and then click on Reviews under the hotel listing). You can then visit each of the review sites and respond to an actual review there if allowed.
  • Travel Bug: NZ’s own travel site has yet to generate sales that live up to the hype of its successful big brother, TradeMe. Guest reviews are a relatively new addition.
Action Plan for Monitoring Internet Chatter about Your Motel

It is important to respond to reviews and comments as you are made aware of them, so you can immediately address any issues and act appropriately (both negative and positive).

Here are some quick tips for responding to customer reviews:
  • Thank the customer for taking the time to write a review
  • Apologize profusely if the customer is right on target with their negative review
  • Provide a simple, short explanation of what really happened (if such an explanation is possible)
  • Assure the reviewer and motel guests in general that every possible step has been taken to address the problem or service in question
  • Offer a direct line of communication between you and the reviewer (via email, direct phone line, etc.) in order to rectify the situation
  • To conclude the response, use any elements of the customer’s comments that are constructive (e.g. great location, comfortable rooms, etc) to put a positive spin on a negative review.

Moteliers need to work hard to nurture happy customers and avoid negative postings. They must monitor reviews on review sites, TripAdvisor in particular, and react immediately if an extremely positive or negative review is posted.

Use Google Alerts to monitor all online chatter about your motel.

It's much better to react to these postings and show your current and potential customers that you are 100% committed to serving them by addressing any and all problems, rather than ignoring complaints. You may be under the impression that responding to a negative review is a wasted effort because this customer will probably never return. However, your response should be primarily focused on assuring the traveling public that the issue is being addressed and the motel is dedicated to customer service.

Your response will also speak to future potential customers who might stumble on this review and the motel 's response.

Friday, August 22, 2008

The Free-Market Case for Green

The biggest threat to businesses is not climate change.

The biggest threat to business is in fact the proposed measures that government will impose on industry in order to fight the mythical threat of climate change.

While the Clark government leads NZ to economic oblivion with its radical environmental crusade, it may still be time to examine a different philosophy. T J Rodgers proposes that governments should stand aside and allow the market to deliver energy choices.

T. J. Rodgers is the founder and CEO of Cypress Semiconductor Corp which owns solar-power manufacturer SunPower and the chairman of SunPower Corp, a manufacturer of solar-power systems. He holds a doctorate in electrical engineering from Stanford University and sits on the board of trustees of Dartmouth College.

T. J. Rodgers is a dedicated, unabashed, free-market capitalist and Libertarian is also a “green” environmentalist. Rodgers, believes that “green is green,” that it’s a money-maker and a winner for business. Says Rodgers, “You serve people by making things people want.” And if people want pollution-free power, the free-market can deliver it.

T. J. Rodgers separates climate science from global-warming fiction:

Do greenhouse gasses elevate temperatures? Probably true.

Are some global-warming scientists spreading false alarms? Probably true, again.

Is there more carbon dioxide in the atmosphere now than, say, 100 years ago? Probably true.

Is this catastrophic? Probably not.

In sum: Rodgers says it’s simply not clear that global warming is a catastrophe.

Does solar power “pay,” in the capitalist sense of the word? Almost. According to T. J. Rodgers, solar power is on the edge of of generating a worthwhile return on investment. And while there’s a learning curve involved in the process of efficiently capturing solar energy, it is neither steep nor prolonged.

In the cause of dealing with global warming, Al Gore proposes replacing payroll taxes with pollution taxes on CO2; Barack Obama supports “cap-and-trade,” in which businesses can emit CO2 to a certain level, after which they will need credits to do so; and John McCain leans toward cap-and-trade, but with an emphasis on subsidies for nuclear energy. T. J. Rodgers has strong opinions on each plan, and stresses overall that government should get out of the energy business.

T. J. Rodgers discusses the promise and pitfalls of the most popular alternative-energy sources (other than solar). Ethanol? Rodgers says it’s a “total waste.” However, bioengineering and genetic engineering that address the entire corn plant, rather than just the fruit, hold promise. Wind power? Rodgers says it produces high energy volume while remaining cheaper per kilowatt hour than solar. Nuclear? Not only is it cheap and efficient — it’s safe.

Click the following links for the full fascinating interview:

Part 1 The Free-Market Case for Green

Part 2 The Free-Market Case for Green

Part 3 The Free-Market Case for Green

Part 4 The Free-Market Case for Green

Part 5
The Free-Market Case for Green

Jeremy Clarkson for Prime Minister!

With New Zealand drowning in political correctness, the following article is a breath of fresh air. Jeremy Clarkson for Prime Minister? This is a potential leader who has compared getting behind the wheel of a Ford GT40 to “opening the Holy Grail to find Cameron Diaz in there, naked and bored”.

With the vanilla offerings available in NZ, wouldn't it be temping to tick the Clarkson box if it appeared on your ballot paper in October?

Daily Mail

Some of his views would make Genghis Khan blush, but as one of our most outspoken TV personalities, Jeremy Clarkson has built up a devoted following who tune in to Top Gear not only for the cars, but for his scabrous wit.

Now, more than 28,000 have signed a Downing Street petition for Clarkson to be declared Prime Minister.

Here, in the spirit of fun - and with apologies for bad taste and to the man himself - LEO McKINSTRY imagines Clarkson's manifesto.


Britons will be encouraged, through discounts and tax relief, to drive 4x4s, Jaguars and BMWs. Not only will this give a valuable boost to our oil industry, but it will encourage climate change. And what's not to like about global warming? Holland gets flooded and we get California's weather. That's what I call a win/win situation.


How can we take seriously a sport that stops for afternoon tea and whose followers wear striped blazers and bray like horses? Let's face it, we have been rubbish at cricket for years, so we should put an end to the endless cycle of misery in summer. My Government will bring back proper sports, such as jousting and bear-baiting.


The only thing special about our link with the U.S. is the amount of grovelling we do. My Government will stop acting as if Britain is the 51st state of the union. The last time I went across the Atlantic, I found people so stupid I'm convinced their nearest living relative must be a gherkin. They're the sort of people who can't read a road sign without moving their lips. Plus their cars are about as sexy as Ann Widdecombe's armpit.


The safety bureaucrats are the abominable no-men, constantly dreaming up new reasons to abolish fun and hobble business. With their silly regulations, they have done more damage to British industry than the Luftwaffe. They are the human equivalent of a Lada. But at least you could drive a Lada off a cliff.


It's true that some juvenile oiks come from broken homes where parents have all the child-rearing skills of King Herod. But let's stop making excuses. These delinquents have been creating mayhem for too long. They need to be taught some fear. Looking down the barrel of a sub-machine gun in a prison camp on the Outer Hebrides might do the trick.


Thanks to mass immigration, urban traffic moves at the speed of an arthritic snail. But still motorists are bullied by the rash of speed cameras, which are nothing more than a revenue-raising device. Serious criminals do not have to put up with this level of surveillance. My Government will tear down cameras and raise the motorway speed limit to 150mph.


Pupils are taught to feel ashamed of their past, our national flag is treated as an embarrassment, our heritage as a source of shame. My Government would end this cultural cringe. The only problem with the Empire is that it wasn't big enough and didn't last long enough.


Our involvement in Iraq has been the most misguided foreign adventure since Napoleon said: "I hear Moscow's nice at this time of year." As Prime Minister, I will bring back every British soldier and let the Iraqis get on with the national pastime of killing each other. And I'll put His Tonyness on trial for crimes against humanity and the Armed Services.


Despite Big Brother, there isn't enough humiliation in public life for those who deserve it. The medieval authorities had the right idea. The Beckhams will be the first in the stocks, followed by the chairman of the Health & Safety Executive.


Putting out the rubbish used to be a simple task. Thanks to the tyrants of green officialdom, it has been turned into a nightmare. Placing the wrong garbage in the wrong bin is regarded as worse than mugging a granny. My Government will restore sanity by providing everyone with a bin the size of Bernard Manning, which will be emptied twice a week.


In my new-look Britain, Wales will be forced to go independent. Any country that has produced Neil Kinnock, Max Boyce and Charlotte Church does not deserve to remain in the UK.


That boring lump of flatness stretching out into the North Sea will have no place in Clarkson's Britain either. Then all those tiresome luvvies with second homes in Norfolk and Suffolk can have the thrill of going to a foreign country without flying to Tuscany.


A diesel has all the excitement of a vegan dinner party. It might be good for you, but so is cod liver oil. The same goes for lowemission cars such as the Toyota Prius. Feeling self-righteous as you tootle around at 10mph may earn you Brownie points with the knit-your-own-lentil brigade, but to the rest of the world, you look like a sanctimonious idiot.


Under my Government, the rights of ordinary British citizens will have a higher priority than those of Islamic terrorists, Somalian gang-leaders and knife-wielding thugs. Homosexual pornography for deranged serial killers will not be regarded as a human right, nor will multi-million pound fees for hypocritical Leftwing lawyers milking the system.


The former U.S. President Ronald Reagan once said that the state was like a baby's alimentary canal: endless appetite at one end and utter irresponsibility at the other. My Government will reduce taxes by cracking down on all pen-sucking, paper-pushing jobsworths, outreach counsellors and parking enforcers, equality officers and drugs co-ordinators. Those who resist will be fed very, very slowly into their own office shredders.


In my Britain, smoking will no longer be seen as a crime against humanity. In fact, cigarettes will be encouraged in order to reduce the burden on the NHS and state pensions. After all, smokers perform a valuable public services by paying extortionate taxation, then generally failing to reach old age. The Marlboro Man has done more for our economy than any Chancellor.


We fought the last war for our independence, and now we're under the heel of the unelected eurocrats of Brussels. Under my rule, Britain will withdraw from the EU, so we will no longer be governed by a bunch of sausage-eating Germans, French cheese-eating surrender monkeys and kebab-swallowing Greeks.


Cool is just a fancy word for pretentious or unpopular. The Clarkson Downing Street will not be interested in appearing "cool". Instead, my team will be encouraged to listen to Seventies rock music and wear figure-hugging blue jeans, no matter what their age.


Cycling is just as dreary as recycling and twice as pointless. My Government will come down heavily on this sanctimonious activity by introducing new taxes on Lycra, plastic helmets and the bicycles themselves. Altogether now: "Four wheels good, two wheels bad."


Only those without any romantic sense of the richness of British history could pretend not to miss the public hangings at Newgate. The restoration of judicial killings before a cheering crowd would not only bring back some muchneeded colour to British life, but would also give the doomed prisoner the satisfaction of a brief burst of celebrity.


CHANCELLOR: Ken Dodd - very sound on taxation.
MINISTER OF TRANSPORT: Richard Hammond - a man with the right sense of priorities when it comes to modes of travel.
HOME SECRETARY: Henry Cooper - a knockout for criminals.
CABINET SECRETARY: Heidi Klum - no Cabinet meeting would ever be boring with the presence of the supermodel.
MINISTER FOR FOOD AND DRINK: Keith Floyd - no more puritan lectures about alcohol units.
FOREIGN SECRETARY: Boris Johnson - diplomacy is his middle name.

Find this story at

Thursday, August 21, 2008

Motel Tales That Make You Want To Stay Home

The "dark side" of motels is alive and well in the USA. provides plenty of script ideas for a motel horror film worthy of Alfred Hitchcock...

The Day
New London CT
By David Collins

The report last week from an overnight guest at the financially challenged Lighthouse Inn, who complained about, among other things, a lack of hot water, aroused my curiosity about what people have to say about other hotels and motels in the region. What I discovered, on a tour through travelers' comments posted to, is that, a dead rat in the swimming pool of a Mystic motel notwithstanding, the highest grades tend to go to the hotels at the two casinos and those closest to Mystic.

Those also tend to be the most expensive, with the Foxwoods Resort Casino and Mohegan Sun hotels sometimes charging two to three times the area's prevailing room rates.At the other end of the spectrum, far from the suites with butlers set, are the economy motels, where the yuck factor, I discovered, can be pretty intense.

Here is a sampling of some of the worst things tourists to Mystic Coast and Country have reported they encountered in overnight stays here:
  • “We returned later and were in bed watching TV and as we were getting comfortable we realized we had company in bed - BUGS!!. Millipeds. I called the office @ 3 a.m. and they had no other rooms available.”
  • “The toilet was disgusting it didn't look like it had ever been cleaned. There were many broken items in the room, including a broken AC. We went to the pool and decided we weren't even going to go in because it was so disgusting, with a gooey looking film on top. The floor was filthy with wads of hair and dirty Band-aids everywhere.”
  • “Exhaust fans blew the kitchen smoke directly into our room. In addition: tiny old towels, coffee maker but no coffee, a dumpster view, hand lotion but no shampoo, and the worst breakfast I have ever seen. All this for over $250 a night.”
  • “There were half eaten cookies under the bed and hairs on the bed sheets. Enough said. I would never stay here again.”
  • “The staff was strange and unprofessional. The room was very tiny and dirty. The bed was hard and stained. Two of the lamps would not work. The bathroom was awful. There was blood splatters on the bathroom door, the shower had mold and the shower head was broken and squirted water everywhere . . . Maybe we just had a bad room but I think it might have been better to sleep in the car than to sleep in that room.”
  • “After arriving at our room another guest walked in. Apparently the front desk assigned it to her a few moments after it was given to us.”
  • “I walked in to see two people in the lobby complaining about the rotting smell in their room. Staff wouldn't honor the Hotwire price and insisted on getting another $25. Needing a place to stay I was ready to give them the $25 but said I wanted to see the room first. They wouldn't let me see the room and the hotel manager started yelling at me for asking. It was incredible.”
  • “There was a bell to ring and right next to that was a sign in big letters that said 'We have a strict NO REFUND policy.' I knew at this point I was in trouble . . . My room was 127 and once I opened the door the smell was horrid. It smelled like it was closed up for years with no fresh air. The room was small. The bedspread had lots of stains. The carpet was dirty. The bathroom needed a good cleaning. The soap was the cheapest I have ever seen and the only other thing was shampoo but the little bottle had been opened and refilled several times it seems.”
  • “The walls had holes in them. The bed was semi comfortable. The AC barely worked . . . I've been in far worse hotels in central Asia but not too many as shabby as this here in the states.”
  • “What a disgrace. Mold everywhere. Ceiling caved in. My husband and I were so grossed out that we put the bed comforters on the floor to be able to walk on the stained carpet . . . $100 a night for this?”
One of my favorite postings was from a guy who leaves his wife home on gambling trips and stays in a budget hotel in Groton for $40. The towels are thin. The bedspreads have holes and the room has a strange scent. But the bed is comfortable and the fridge works and he can get baseball on the TV.
”This is not the place I go to with my wife (or girlfriend for that matter,)” he wrote.

As for that rat, it was seen floating in the pool of a moderately priced Mystic hotel. The guest said they got a $139 refund for the room and promptly moved to a New London motel, which they liked.

Wednesday, August 20, 2008

Ideas sought on reducing government travel

The motel industry should be somewhat concerned that the State Service Commission has recently asked for proposals on ways to reduce government department travel by 15 percent by 2010.

One of the major markets for the motel industry is the increasing guest nights consumed by the public sector. This has coincided with the number of people working for government departments blossoming by 11% between 2002 and June last year to a whopping 325,000. The number of public servants in Wellington grew by almost 7,000 in that time.

Labour has been recently accused of being obsessed with increasing public service bureaucracy at an unprecedented rate that has resulted in the public sector leading the market, rather than the private sector.

... So is the government now showing concern and introducing controls on spending taxpayers’ money as carefully as hardworking Kiwi families and businesses.... well NO!

According to the State Service Commission, there is no acknowledgment that government should be rationalizing spending other people's money or reducing the weight of the public sector. Instead, the State Service Commission wishes to focus on saving the planet! Apparently, the enemy of the state is greenhouse gas emissions, they need to be reduced and sustainable transport practices need to be accelerated...

The State Service Commission said in its request for information that it wanted ideas on how technology such as video conferencing and teleworking could work to meet travel reducing targets. Interested parties have until August 31 to respond.

The Motel Web Site

Kathie Shepherd, ex motelier and specialist motel broker extraordinaire comments on: The Motel Website:

"I guess there are a lot of people who are feeling pretty miserable at the moment. What with the bad weather and constant rain it is hard to get excited. I am even at the stage where I have to park my car in the neighbour’s paddock, behind my house, and climb the fence to get home because my front paddocks and driveway have become a lake. I am a firm believer though that there is a silver lining to every cloud and I figure now I have a lakeside property the value of it must have gone up..."Cick here for further

Tuesday, August 19, 2008

Lonely Planet: "NZ needs to protect its image"

As New Zealand continues along the journey of trying to establish a national identity, the regions are trying to attract visitor numbers by manufacturing their own unique icons. Are they creating cultural cringe or unique and enduring kiwiana?

The Dominion Post
Tuesday, 19 August 2008
Rebecca Quilliam

The Lonely Planet has again turned its attention to the land of the long white cloud. Rebecca Quilliam looks at how the country fared in the latest edition of the popular travel guide.

The Lonely Planet has scrutinised nearly every inch of Godzone and has lavished praise on the country's beauty but warns the tourism industry needs to protect its green status.
The new guidebook, released today, said there were "few countries on this lonely planet as diverse, unspoiled and utterly, utterly photogenic".

However, the book noted that while tourism numbers in New Zealand have risen, so has the environmental cost, with extra visitors putting strain on the clean, green environment the country is renowned for.

For the first time all listings in the Lonely Planet have been evaluated for their sustainability, with the best included in a "GreenDex" – an index of all the tour, accommodation and eating choices that demonstrate an active sustainable tourism policy.

"We hope that this, and other similar initiatives, will encourage other operators to see that there's a clear financial advantage in operating an environmentally-responsible business," book co-author Charles Rawlings-Way said.

The guidebook has praised the country's recognition of Maori culture and how "grass-roots small-scale Maori tourism operators give a more genuine experience for travellers".
Some of the top Maori experiences include exploring the East Cape, taking a Footprints Waipoua tour, and attending the Kawhia Kai festival.

It's not all good news though as the five authors also point out the darker, duller and plain odd aspects of the country.

They described the Tasman Glacier as having a "predictably spectacular sweep of ice, but further down it's downright ugly".

Bluff was described as "unimpressive" with the main reason for visiting to catch the ferry to Stewart Island.

They also include "tacky" features many towns and cities proudly display. Targets included Auckland's Sky Tower that "looks like a giant hypodermic giving a fix to the heavens", the replica Stonehenge in the Wairarapa – "A lifesize recreation of the original. Weird? Yes. Tacky? Absolutely", and Cromwell's "heinous giant fruit thing".

The main centres received good marks from the authors. Travellers were encouraged to, "rock into Wellington for a big city hit" and experience its "red-hot arts scene". Auckland could "justifiably respond to its detractors, `Don't hate me because I'm beautiful'." And Christchurch combines "an easy-going provincial charm with the emerging energy and verve of a metropolis".

The authors embraced small-town New Zealand, such as "cute as a button" Naseby, "best-kept secret" Opoutere, and Takaka: "laid-back to near horizontal. . . dreadlocked types rub shoulders with hardened farmers and crusty fishermen in equilibrium: the bike shop sells guitar strings; the pub serves chai".

However, not all out little towns found favour such as the Gulf Harbour – "a Noddy-town development of matching houses"– Dargaville – "you should know not to expect too much" – and Pauanui – "an upmarket refugee camp for over-wealthy Aucklanders".

Appropriately the authors compared the national psyche to "that little guy at school when they're picking rugby teams. . .Then, when he does get the nod, his sheer determination to prove himself propels him to score a completely unexpected try. "When his team-mates come to congratulate him he stares at the ground and mumbles `It was nothing, ay'."

They advised tourists to bring with them insect repellent to keep the sandflies away, the ability to get excited over a rugby game and a long sleeve shirt for summer – "the sun kicks like a mule".

They also included a dos and don'ts list. According to the authors, visitors should bring a small offering such as wine or chocolates if invited to a meal, turn up on time at restaurants to ensure their table is not given away, and tip about 10 per cent for good service. The don'ts include sitting on a table or surface where food is prepared as it is culturally offensive, or belch at the table as it is considered bad manners.

The author's comments are fair, but surely New Zealand is not the only country to turn their nose up at table burpers?

Monday, August 18, 2008

Super Saturday sporting success

New Zealand has blasted away the winter doldrums on “Super Saturday” with sporting success.

This was the “the greatest day in New Zealand's Olympic Games history” with a bag of five medals. Two gold medals to rowing twins Caroline and Georgina Evers-Swindell and shot putter Valerie Vili, a silver to track cyclist Hayden Roulston and bronzes to singles sculler Mahe Drysdale and fellow rowers George Bridgewater and Nathan Twaddle in the men's pair.

The icing on the cake was the All Blacks emphatic 19-0 rugby test win over the Springboks in Cape Town.

Major sporting weekends can be a quiet affair for many moteliers. Impromptu weekend trips away are put on hold, with many Kiwis preferring to stay at home in familiar surroundings and cuddle up to their own TVs.

On the positive side, hopefully the weekend’s sporting success will temporally jolt Kiwis out of the winter blues and get them out on the road to enjoy some motel hospitality.

Sunday, August 17, 2008

Southland Times report "June quiet for moteliers"

The Southland Times
Saturday, 16 August 2008

Soaring fuel prices and tough economic times are hitting accommodation providers in Queenstown and Wanaka hard.

Motel and camping ground owners have been worst affected with a nationwide 14 percent drop for the month of June this year compared with June 2007, according to just-released Statistics New Zealand figures.

Waikato and Otago recorded the largest falls, down 13 percent (22,000) and 9 percent (20,000) respectively.

Te Anau motelier Craig Duncan pictured outside his Bella Vista Motel. Mr Duncan said bookings were well up on August 2007, perhaps because of the better than average ski season in Queenstown and Wanaka.

"We're definitely down," Motel Association of New Zealand Wanaka branch president Paul Parker said.

"There's an economic uncertainty out there. There's less Japanese about and I think when fuel prices were peaking that was having a really strong effect." "There's certainly some (accommodation providers) hurting." Queenstown Lakes District holiday parks manager Greg Hartshorne said there had been a big decrease in domestic visitors at the Queenstown Lakes District Council-owned Arrowtown and Queenstown camping grounds.

"The main thing we're noticing is the price of petrol has stopped all those people who nipped in here for a weekend's skiing or just came down for a couple of days." It was the first time in 14 years he had noticed vacancy signs on Frankton Rd during the annual winter festival.

The Arrowtown camping ground had been harder hit than its Queenstown counterpart.

It has been a reasonably quiet winter for accommodation outlets in the deep south although moteliers in Eastern Southland say they have been kept busy by the booming dairy industry.

Gore's Esplanade Motels owner Rena Butel said this week her occupancy rate last month was 76 percent. That compared to 32 percent for Southland, for the same period last year.

Her guests were not tourists but contractors involved with the dairy industry or major construction projects in the town.

There were also a lot of guests connected with Solid Energy, which has vast lignite resources near Mataura — "it's just that Gore is so busy", Mrs Butel said.

Statistics New Zealand's accommodation survey for June, released this week, showed a quiet month for Southland moteliers.

Guest nights were down 3000, or 10 percent, on June 2007.

Statistics New Zealand project manager Tehseen Islam said month to month comparisons for the accommodation sector could be quite volatile.

For the 2007-2008 year, guest nights in Southland were down by 1000 which was reflected as a 0 percent variation on the 2006-2007 year, he said.

Friday, August 15, 2008

ATM PIN number reversal scam

The Motel Association of NZ (MANZ) is somewhat embarrassed today by including the following item in their weekly "eMANZ NewZ" email bulletin broadcast to over 1000 of its members:


If you should ever be forced by a robber to withdraw money from an ATM machine, you can notify the police by entering your Pin # in reverse.

For example if your pin number is 1234 then you would put in 4321.

The ATM recognizes that your pin number is backwards from the ATM card you placed in the machine. The machine will still give you the money you requested, but unknown to the robber, the police will be immediately dispatched to help you.

This information was recently broadcast on TV and it states that it is seldom used because people don't know it exists.

Information comes from Kelvin Ratnam, Senior Policy Advisor, Crime Prevention Unit l, Department of Justice who says "Please pass this along to everyone possible."

Ironically, the same bulletin quotes a well used catchphrase to stress a point in another article:

"If it sounds too good to be true, it probably is".

After an exhaustive 2-minute investigation, the writer found the ATM PIN Number Reversal Scam on several hoax and scam sites.

A New Zealand Herald report printed last year clears up any confusion on the authenticity of the claim :

Bogus email tries to fool ATM users
New Zealand Herald
Wednesday May 23, 2007
By Aroha Treacher

Don't be fooled into thinking there's a cunning way to get police to come to your aid if you are ever forced to withdraw money from an ATM machine.

Internet users are receiving bogus emails that promise banking customers just that - a false sense of security.

The bogus email claims if a robber or kidnapper ever forces you to withdraw money from an ATM machine, police will automatically come to your aid if you enter your pin number in backwards.

However Auckland police have confirmed that the email is a complete fabrication. "It is too far fetched to be believable," a police source said.

The bogus emails have found their way into Work and Income contact centres in Auckland and Hamilton, and the Crime Prevention Unit based in Wellington.

It is not known to what extent the emails have spread but a number of Work and Income staff receiving the email believed the information to be true and forwarded the email.

One of the reasons people believe the email is because a senior staff member for the Crime Prevention Unit received and forwarded it on.

Kelvin Ratnam, senior policy advisor for the CPU said: "Unfortunately when someone else forwarded the message on they must have deleted the history below it leaving my name as the last recipient."

He advises that if you have received the email to go the urban legends website which explains the origin of how it all began back in September 2006.

Craig Howie, ANZ bank media spokesman said: "We strongly suggest that customers ignore these kind of emails and delete them."

He also said ANZ provide a number of tips for customers about protecting their security. These can be found on the bank's website .

Under the weather? Blame the season

As motel hosts, we know only too well that the weather has a huge influence on our business.

When the sun is shining all is well with the world. Our guests are positive and happy to be away from the familiarity of home. When the dark clouds loom and it starts to rain, our guests become dour, depressed and high maintenance.

Over the holiday season, we watch the evening weather with great anticipation. If Jim promises good weather ahead, then our phone will start ringing.

Even our business travellers appear to be influenced by the weather. Good weather brings out positiveness and optimism regardless of the sales figures.

New Zealand Herald
Thursday August 14, 2008
By James Ihaka

If you're feeling cranky and don't give a toss about anything without quite understanding why, the miserable weather could be to blame.

Waikato University social psychology lecturer Cate Curtis says seasonal affective disorder, or SAD, is common during the winter months. Symptoms range from feeling low, lethargic and irritable to not sleeping, having difficulty concentrating and impaired memory. But Dr Curtis said those who weren't SAD-afflicted were often as likely to suffer mood changes with the awful weather.

"Research suggests that temperature, not being able to go outside, humidity, strong winds and stormy weather do affect people's moods and their cognitive ability, their ability to concentrate and their likelihood to help people," said Dr Curtis. "Arguably, it's related to things like boredom and being cooped up with the same people all the time."

Dr Curtis said getting outside - "particularly in the brief patches of sun" - could have an "immediate effect" on a person's mood, which could be bad news for the Bay of Plenty, Rotorua, Gisborne and Hawkes Bay, which MetService says should expect lower-than-normal sunshine hours this month and next.

In reasonably temperate climates, spring was often the time when people's moods picked up, although in summer things could sometimes get out of hand. "In really hot weather people tend to get more aggressive and violent, and that seems to be in part around their difficulty in controlling temperature but also around people being out and about with more interactions."

Thursday, August 14, 2008

The Coral Court Motel

You can’t beat the Coral Court Motel for classic
"No Tell Motel" Americana!

Just before the motel opened, in 1940, J. Edgar Hoover called for an investigation of all motor courts, alleging their
connection with drugs, desperadoes, and declining moral values.

I was born in the wrong era!

"The Coral Court is the not only a stunning example of
architecture worthy of preservation but for generations of travelers, it remains a bastion of hospitality that has evolved into a venerable Route 66 icon.

Those of us who value Coral Court remember all the cars filled with weary souls cruising by gleaming tile walls. We see shadowy shapes behind glass block windows and a big lighted sign acting as a beacon for so many. We hear the laughter of the children playing beneath the shade trees.

Tourists, salesmen, honeymooners, and road warriors of every description found refuge at the Coral Court. Just after the motor court opened in 1941, young men going off to war stayed there with wives and sweethearts. Some of those GIs never returned. There are women whose hair has grown gray that recall every detail of that last night spent with their young man - wrapped in each others arms with only the sound of passing traffic on the Mother Road to serenade them.

To all of those people and for so many, many more, Coral Court is a special place - an extra special place."

Michael Wallis
Author of Route 66: The Mother Road

For more information click on:

The energy efficient light bulb debate

The arrogance of the present government can be highlighted by their recent announcement to ban traditional incandescent light bulb sales from October 2009.

This was breathlessly announced by the arranged marriage of Labour’s Energy Minister David Parker and the Green Party’s Jeanette Fitzsimons. This will be "good" for the country by cutting greenhouse gas emissions and will be "good" for the kiwi battler by saving saving household power costs...

At first the media conformed to lazy journalism and cut and pasted the feel good government spin, however some media commentators decided to take time and think about the issue as the tide of public opinion changed rapidly. What started off as a warm and fuzzy announcement has turned into a public relations disaster that has demonstrated the "do as I say" culture of the present government.

This is a government whose language is riddled with words such as “should”, “must” and “ought”. The Nanny State always
knows best and we must be saved from ourselves. Mum and Dad middle New Zealand don't mind the government telling others what to do, but object being told what they have to do in their own household.

The main issue here is having a freedom of choice unilaterally removed. Believe it or not, most people aren't stupid. Some people may chose to save money and buy new energy efficient light bulbs, but being bullied into it by smug bureaucrats rankles.

In spite of the philosophical debate, the motel industry is frantically dumping ordinary incandescent light bulbs in favour of the new politically correct and
government subsidized energy efficient light bulbs. This is mainly being done for economic sustainability reasons as the benefit from energy savings can quickly recoup the initial capital cost. And one would think rightly so.... however not so fast!

Ian Wishart's "Investigate" magazine has unleashed a sensationalist article that claims that "new light bulbs (are) dangerous, toxic, could cost you thousands".

The article in "Investigate" should be judged with common sense and reason, however it makes interesting reading.

At a glance the article, "See No Evil" covers the following main points:

  • Mercury vapour US authorities don’t recommend use in children’s rooms or over carpeted areas because of toxic hazard
  • Damage to houses Despite NZ government assurances, the latest scientific tests in the US prove the mercury in one broken bulb can irreparably contaminate a carpet. In the US insurance companies are refusing to cover the cost of replacing carpets
  • Fire risk It is normal for CFL bulbs to physically burn up at the end of their natural life. Although rare, in some cases this has led to house fires
  • Toxic smoke The burnt plastic and gases emitted when lights burn out are carcinogenic
  • Lifespan Although many bulbs claim 6,000 hours (five years’ use) or greater, this is based on ideal laboratory conditions. Some bulbs have died within 12 months in household use
  • RF Interference Household CFLs are widely known to cause interference to wireless networks, electronic appliances, hot water cylinders and cordless phones
  • Power disruptions NZ Government briefing papers disclose major concerns that CFLs could cause regular widespread power outages because of a peculiar side-effect known as harmonic distortion
  • Cost of disposal Some US states now require homeowners to drive old CFL bulbs to a special recycling centre to avoid contaminating the environment.
The full article, can be read here:

June a horror month for motels

There are signs that there is an overall softening of trade, however the winter blues may not last long. Kiwis make up the bulk of visitor numbers and their perception and level of optimism seems to be driven by media, sporting results and the state of the weather.

There is light at the end of the tunnel. October heralds the general election and by this time the sheeple of Aotearoa will hopefully be distracted from fretting about the housing market, blossoming debt, cost of living and increased petrol prices will have become accepted normality. The honeymoon period of a new government will coincide with better weather and this may give us a well needed boost heading into a busy Summer season.

In the interim, in order to keep business stuttering along, he's hoping we can win a few medals at the Olympics and may the All Blacks triumph!

New Zealand Herald
Wednesday August 13, 2008
By Tamsyn Parker

The Motel Association is hoping falling petrol prices will encourage people to get back out on the road and stay overnight, after one of the toughest months for the industry.

Statistics New Zealand figures released yesterday reveal a 14 per cent fall in the number of nights spent in motel accommodation in June compared with June last year.

It was the main driver of a 5 per cent drop in total accommodation nights during June, which were down 96,000 on last year to 1.7 million.

Motel Association chief executive Michael Baines said the figures were expected to be down, based on feedback from members, but some regions were being hit harder than others.

"It is quite regionalised - some areas are still doing quite well, but those reliant on feeding in from Auckland have been particularly hit."

Baines said the main reason behind the fall was higher fuel and power prices.

"A big part of it is domestic tourism. That is obviously a reflection of petrol prices and power going up. A lot of travel for leisure is dependent on disposable income."

About 70 per cent of people who stay at motels are from this country, with many using motel accommodation to visit friends and family.

But Baines said areas with strong links to agriculture, such as Taranaki and Otago, were still seeing strong visitor numbers.

He said the petrol-price rises in June had come as a big shock to many people, but now that the price was coming back down the industry was hoping to see a return of locals.

"As petrol prices have fallen back cars are already appearing on the road again. We are starting to see the people come back."

But despite the tough month overall, total guest nights increased 2 per cent in the year ending June 2008 compared with the previous June year. Seven of the 12 regions recorded higher numbers of guest nights led by Auckland and Canterbury.

Statistics New Zealand said the overall trend had seen guest nights increasing since January 2006.

Wednesday, August 13, 2008

Challenges that face the motel Industry

The following article appeared in New Zealand Resort Broker's "Tourism Informer" publication and has been reproduced in the August/September 2008 Southern Hospitality Magazine. It would be fair to say that the article caused a stir and was a hot topic of conversation within the motel industry.

The article is straight shooting and outlines some of the challenges facing the motel industry. Realistic words written within the "Tourism Industry" are very rare, so it is refreshing for Resort Brokers to have the courage to put their name to this article...

For further information:

Ageing stock and obsolescence

The bulk of motels in New Zealand are more than 10
years old and are generally well located on main arterial
routes, easily accessible to the traveling public. It is fair
to say that in high profile areas the motel use of the site
is the lowest and worst use of the land and that if the
motel did not exist it would be replaced with enterprises
which can generate better returns for the freehold owner
i.e. apartments, retail, commercial service, fast food, and
service stations all generally provide a better return in
high traffic volume areas.

Freehold owners expecting better returns

So we all need to watch out as any owner will be expecting
to receive a fair return on their investment and rightly
so. Many motels only exist today because of the long
term leases found in the industry. Many freehold owners
cannot wait until the current leases expire so that they
can redevelop and in the interim they will often tend to
push for higher rents thus squeezing the profitability of
the business.

Increasing costs

The costs of operating a motel have increased often
well above general inflation so the business operator’s
margins are suffering another form of squeeze. The old
days of the 1/3 1/3 1/3 rule (1/3rd revenue to rent,
1/3rd revenue to costs, and 1/3rd revenue to operators
profit before drawing, tax, depreciation etc) have gone as
freehold owners have often pushed hard at rent reviews
to get a higher percentage – sometimes up to 40%.

With costs rising we have seen examples of where they
represent a proportion well above 33%. In an example of
a 20 room motel which has a turnover of say $500,000
the traditional split would have been as follows:

  • $166,700 rent to the freehold owner
  • $166,700 operational costs
  • $166,700 operators pre tax and drawings profit
Now if the ratios change to say 35% rent and 38% costs
then the operator income will drop from $166,700 per
annum to just $135,000 - $31,700 straight off the bottom line.

Loss in capital value

Investment in a motel lease is in fact a depreciating asset
in any event although many owners have become used
to seeing their values increase over the years for three
major reasons, namely:

  • Increased rooms rates and occupancies pushing up real returns
  • Ability to buy additional years on their leases at reasonable prices, and
  • Little distinction in the market between any lease with more than 20 years to run
Things have changed however as we have seen declining
incomes through higher rental and costs detailed in the
previous section – that reduction of $35,000 p/a alone
would result in a loss in the lease value of between
$100,000 and $150,000 depending on the location and
nature of the motel.

Many areas of New Zealand have seen a drop off in
custom over the last 12 months with the increases in fuel
costs, higher food prices, interest rate increases, reducing
corporate profits and the like, impacting on people’s
desire and ability to travel for both leisure and business
purposes. Our recent study of what was considered to
be a very profitable modern motel indicated that the 18
room motel was very susceptible to only minor changes
i.e. we demonstrated that just a 10% drop in occupancy,
only a 5% drop in room rate, and a minimal 2% increase

in interest rates turned this successful motel into a

Current profit before tax, depn, interest and owner drawings $177,800
Current profit after mortgage
payments 30% P and I loan $ 81,800

After changes outlined above:

Future profit before tax, depn,
interest and owner drawings $ 78,500
Future profit after mortgage
payments 30% P and I loan -$ 21,800

With just these minor changes in the market, the owners
of this business would be losing $21,800 per annum and
their business would have at least halved in value.

Increased competition

The bulk of the industry has been attacked on a number
of fronts with varying degrees of success, namely:

  • Increased supply of serviced apartments and the advent of management rights
  • Hotels taking customers based on increased service and little differential in price
  • More modern motels being built which offer better accommodation than existing stock
  • To some degree the establishment of the bed and breakfast industry, and
  • Those motels who have seen the light and undertaken extensive refurbishment
There was a time when back street motels experienced
low occupancies and were forced to market the attributes
of a quiet location. Now the public have become aware
that many of the more modern motels are not necessarily
on the major arterial routes and the newer motels have
been pretty successful in securing the established
customers from older, better positioned properties.

Customer needs

Let’s face it – when people travel they expect to stay
in accommodation either equivalent to what they have
at home or better. The advent of large screen TV’s,
microwaves, air-conditioning, quality lighting, heated
towel rails, mixing faucets, large mirrors, fast internet
service, quality furniture, comfortable beds, and
quality soft furnishings have meant that these are not
considered luxuries by most people who travel but have
become a part of their every day life.

Most people do not want to stay in a motel with floral carpets, floral curtains,
patterned wallpaper, sagging beds, dated bathrooms and
kitchenettes, and dated soft furnishings - not even if it is

A brief review of the industry would indicate that most
operators of motels are on average in the 50’s and it is
clear that the limited refurbishment that takes place is
orientated towards the tastes of that age group rather
than the wider travelling public. Clearly there is a need
for motel operator/owners to seek external advice on

Make your customers happy and comfortable and they
will come back and also tell their friends – the cheapest
advertising you can get. Let them think that it is like
staying with the mother in law and you risk a final goodbye
as they begrudgingly hand you $120 and wonder what

Legal structures standing in the way

20-30 years ago it became popular for freehold going
concern owners to split their assets into a freehold
investment portion and a business lease. This generally
yielded a greater value as it satisfied two investor

The freehold investments became very popular
with long term investors due to the length of the leases
offered and the quality locations of most of the properties.
Freehold owners felt very safe with their investments and
were prepared to pay premiums over and above normal
commercial investments.

The process also opened up the ability for people with less capital to get into the
business through the acquisition of a lease/business.
So splitting up of the entities was a profitable exercise
and before long most motels of any size throughout the
country had such structures in place and almost all new
properties were and are formed on this basis.

The problem with this structure is mainly that the leases
are for such a long term and the lessor will generally
demand a ratchet clause meaning that the rental can
never go down below that set at the last review. This
is perfectly fine if the market continues to improve over
the 25 or 30 year term but sure as eggs the market will
decline at some point in time and the rental will become

The second major issue with leases is that generally
the freehold owner does not take any responsibility for
expenses other than structural repairs and maintenance
plus water tightness. Well it does not take an accountant
to understand that the share of profits the operator
receives makes it difficult to afford and undertake the
refurbishment required over time to ensure that the
motel has a lasting place in the transient industry.

It is the writer’s belief that the leases need to be reformatted
over time to reflect these inherent difficulties otherwise
many freehold owners may find themselves standing
behind the reception desk rather than simply awaiting
their next monthly automatic bank payment.

The third issue is that most leases have a provision for
a maintenance fund for future R and M but generally this
represents only a fraction of what is required. In hotels
it is usual practice to set aside a fund equivalent to 5%
of gross revenue and this is never enough to keep the
property up to standard and requires periodic capital
injection. In motels the usual fund is only 3%-5% of the
annual rental – not gross revenue. Therefore maintenance
provisions in motel leases are usually less than a third of
what is provided for in hotels – yet as already stated the
provision in hotels is not enough. The motel industry is
not generally aware of this huge shortfall and the lessee
feels that there is inadequate revenue to set aside – a
problem to be dealt with in the future.

The trouble is that lessees all around the country have
continued to ignore the issue and the deterioration of
motel stock has begun to accelerate.

value of leases/tax depreciation

One wonders if the effects of obsolescence and physical
deterioration have been properly factored into the
assessment of worth for motel leases. I suspect not,
other than in extreme cases where the motel has reached
the stage where it is simply not habitable.

If buyers looking at motel leases were more discerning and fully
reflected deferred maintenance into their thinking then
it might force current owners to be more responsible in
the protection of their major asset. A motel business is
no different than most other businesses – if you continue
to take out and not put back then you will suffer an
eventual loss in income and capital worth.

Most owners are more than happy to accept tax reductions in terms of
depreciation and spend the savings elsewhere without
regard to the fact that depreciation is real and needs to
be dealt with. Depreciation is not just a tax break – it is

Why don’t moteliers refurbish?

Well the major reasons are usually fiscal. Normally
owner operators feel that they cannot afford to expend
the capital. The reality is however that they simply
cannot afford not to refurbish in most circumstances.

Others simply choose to ignore the reality and hope to
sell before it becomes too apparent. Over time buyers
will be made aware of the problem facing the industry
of a deteriorating stock as it will become public news
and these same buyers will look for low maintenance
properties that have demonstrated a willingness to set
additional funds aside and undertake progressive well
planned improvements.

The industry is walking a dangerous path but it will all
come home to roost and someone will have to pay. Unless
addressed, our industry will suffer with less guest nights
sold to domestic and foreign visitors, less revenue, and
loss in business values.

The good news

Whilst we are aware of the problem and little is being
done to remedy it we can at least get comfort that the
industry does have a good backbone. Our motels are
generally very spacious and include features such as
kitchenettes which is fairly extraordinary by international
standards. We have a strong base to work off and the
distribution of our stock is pretty much in proportion with
the demand.

Resort Brokers has produced a very simple model to
help moteliers understand the potential benefits of
refurbishment which can be downloaded as follows:

There is no pain involved in at least having a look at
this model and then talking with a refurbishment expert
– in association with your accountant, valuer, and bank.
These people can help you make the right decision and
grow your business.

The future will be bright if we wake up to our responsibilities either individually or collectively.
Please don’t undertake piecemeal or sporadic
improvements because a new bedspread does not help
a room that needs new carpet, new paintwork and is
shabby in other areas. A decent refurbishment plan
is a continuous operation which does not stop and will
mean that the motel will never be run down. Sure you will
undertake most of your more major tasks in the off-peak
season but the process will be continual. Leave it for 10-
15 years and the cost will be prohibitive – leave it for 2 or
3 years and it will stretch your finances.

Treat your motel business like a family member - make sure
it is well fed and you will prosper along with you golden nest
egg. Please set about helping yourselves which will in turn
help us when it comes time for you to sell. Establishing
and implementing a refurbishment programme should
be one of your highest priorities and if done right you
will benefit from stronger income streams and retention
of value. There are plenty of people that can help you
– unless you are well skilled in this area, you are well
advised to bring in the experts.

For more information, or if you would like to
discuss any of the elements of this article,
please contact Gordon McGregor:
Mobile: 021 99 88 10
DDI: 09 369 9700

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