SME business relief package ‘a brilliant start’

What is in the SME business relief package?

1. a suite of 11 tax changes costing $480 million
2. an expansion to the export credit scheme
3. extended jurisdiction for the Disputes Tribunal
4. expansion of business advice services
5. a prompt-payment requirement for government agencies.

The tax changes are:

1. removing the 5% increase in provisional tax over the previous year
2. reducing the use of money interest rate for underpayments by 4.5%
3. threshold for GST payments method (instead of accrual) to increase by over 50% from $1.3 to $2.0 million
4. threshold for GST registration to increase by 50% from $40,000 to $60,000
5. legal expenses of under $10,000 can now be fully expensed in the year incurred, not capitalised
6. increase in threshold for montly PAYE filing increases from $100,ooo to $500,000
7. FBT annual filing threshold raised to $500,000 from $100,000.
8. value of minor fringe benefits to employees without attracting FBT will increase to $300 a quarter per employee from $200, and $22,500 a year per employer from $15,000
9. FBT prescribed interest rate for low-interest, employment-related loans will fall from 10.90% to 8.05%.
10. some other thresholds for accrual expenditure adjustments will also be increased.
11. certain SME tax simplification measures that are part of a bill now before Parliament will be fast-tracked.

(Hat tip www.kiwiblog.co.nz)

For the average accommodation business the package will not amount to much, however the business friendly rhetoric is appreciated and it is pleasing to see this acknowledged by the Motel Association.

4 February 2009
Press Release: Motel Association

The Government’s small-business relief package is a “brilliant start” to helping small businesses ride out the economic storm, says the Motel Association of New Zealand.

Chief Executive Michael Baines says the impact on cashflows, access to credit, and reduction of compliance costs is “just what we needed.”

The Motel Association represents 1,000 moteliers, every one of them small and medium-size enterprises, making it the only organisation made up solely of such businesses.

“These are very welcome initiatives for our members.

“The tax part of the package gives SMEs a far easier ride in what is a complex area”.

“Tax is a complicated area and the 11 tax changes announced today will make it easier for SMEs to manage this area.

“Cashflow will be affected in a positive way, which has got to be good for anyone in a small business in the current business conditions.

“This whole package makes SMEs feel wanted. It’s recognition of the tremendous contribution they make to the economy.

“It’s not just about the big boys."

Mr Baines said the expansion and promotion of advisory services and mentoring available to businesses is welcome but he would have liked the scheme to have integrated existing schemes run by organisations such as his.

“We have a mentoring programme running and we have the knowledge, and it would have been good to have that integrated into a wider scheme.

“Legitimate trade organisations have a tremendous role to play and need to be included in the programme”

“However, anything that makes advice and information easier to get is welcomed.

“We appreciate today’s moves as a start, and we look forward to many more initiatives that work.

“Following on from the welcome changes to the RMA announced yesterday, this whole package is really good for the little guy.”

Source: Click HERE

Moteliers support action on 'boy racers'

I have been following the boy racer debate with some amusement. These issues will always bring out knee jerk commentary down to the level of perennial radio talk-back callers.

The thought of suped-up Subaru's and Evo's being crushed by a government agency based on the traffic offenders age, youthful attire and amount of modifications done to the vehicle is laughable.

I personally do not support any further legislation and would prefer that the Police administer existing laws to those actual individuals that are actually breaking them. Assumptions that police are restricted by current laws in stopping recurrent law breaking boy racers is a cop out.

Questions should be asked to our top cops as to why they are not on top of this problem.

Good on the Motel Association for adding comment to the debate - I may not agree with them, but it is good to see some mongrel!

3 February 2009
Press Release: Motel Association

Moteliers support action on 'boy racers'

Members of the Motel Association applaud any action taken by the police or the government to deal with the problems associated with so-called boy racers.

“They are dangerous and a major nuisance to the motel industry,” said Chief Executive Michael Baines today.

“The time for politically correct claptrap solutions to this problem is long past. Direct and positive action is now required.

"Motels are located on main roads, both to make them accessible to the travelling public and as a requirement of the planning strictures of some councils. They are also the moteliers' homes.

“The disruption by these 'boy racers' invades not only the comfort of our paying guests but also the homes of the moteliers. The stresses on the operators by both the impact on their businesses and their personal space has proved to be debilitating in many cases," said Mr Baines.

“Many of the Motel Association's members support the crushing of offenders’ cars.

“There has to be a real consequence for their actions when caught. As far as we are concerned there is nothing wrong with a strong deterrent.”

Source: Click HERE

Minimum Wage

The Minimum Wage review is crucial to the accommodation and tourism sector.

For me there are two disappointing aspects on this issue in the press to date. Firstly it would appear that Key is softening and secondly the Minimum Wage debate appears to be territory where our industry representatives are afraid to tread. Their silence has been deafening. (Please correct me if I am wrong).

Accommodation providers and the wider tourism industry will need to look to Business New Zealand chief executive Phil O'Reilly to speak common sense on their behalf.

O'Reilly has said that "businesses struggling to break even will lay off workers if they are faced with increasing costs that does nothing to boost sales.....low paid workers would be better off with a tax cut rather than an increase in the minimum wage."

Wotif.com expects 20% profit surge

The internet appears to be the only frontier that can produce positive growth in guest night sales.

Not all internet resellers are successful as wotif.com and it would appear as if the wotif juggernaut keeps on rolling. The publication of the company's half year results to December 2008 will be eagerally antisipated by the accommodation industry.

Wotif.com sells accommodation online in more 45 countries. The website attracts 3.4 million visits, with customers making over 205,000 bookings. It is one of the most successful and readily recognised brands for online accommodation booking services in Australasia.

A recent survey revealed that 61 per cent of Kiwis now book accommodation online. It also found that 61 per cent use online research to decide what accommodation choice to choose while only 5 per cent ask a travel agent.

www.ninemsn.com.au

3/02/2009

Online accommodation booking agency Wotif.com Holdings Ltd expects its interim 2009 after-tax profit to surge by about 20 per cent.

Brisbane-based Wotif.com expects its net profit to be about $20.4 million to December 31, 2008, up 20 per cent on its interim 2008 net profit of $17.064 million.

This expectation is based upon internal management accounts and may change on completion and review of the Wotif Group's final accounts, the company said in a statement on Tuesday.

The company's interim 2008 net profit was 43 per cent higher on the interim 2007 result, and was generated by a 32 per cent hike in revenue to $41.062 million.

Wotif.com will release its interim results on February 2009.

By 1022 AEDT shares in Wotif.com were 22 cents or 7.07 per cent higher at $3.33.

Source: Click HERE

Small biz tax relief tipped for Key speech

Less is more! 

As we move away from statism, it is pleasing that some are starting to understand the philosophy that government does not create wealth or prosperity - private business and individuals do... 

New Zealand Herald
February 2 2009

Prime Minister John Key is to make a speech on Wednesday outlining measures to help small and medium businesses.

He told Breakfast on TV One this morning there would be a range of initiatives aimed at taking pressure off the sector which employs 95 per cent of New Zealand workers.

Changes would focus on tax, cash flow and regulation.

"It's one plank in a raft of responses from the Government to ensure that we can tackle this economic crisis to the best of our ability," said Key.

The Dominion Post reported the changes included reduced penalties for companies which underpaid provisional tax.

The tax is paid in advance based on estimated earnings. Underpayers get hit with a 14.24 per cent penalty.
Another likely change was to remove the presumption that profits would increase 5 per cent on the previous year for calculating provisional tax.

Source: Click HERE

We're Back!

The Motella returns.

After coming home from a break, the motel business envelopes you before the suitcases hit the floor. Inevitably there is a small mountain of work that has accumulated after an absence and the glow of the holiday is soon forgotten.

Sadly we have arrived home without our boy and in the moments between the distraction of looking after others, we can't help wonder what he is doing.

We remind ourselves that he will be busy too...

The Motella's Road Trip

The Motella and family are packing the car and will be doing our bit for the New Zealand economy by going on holiday!

The motel minders are in place and the v8 is tuned and ready to unashamedly burn fossil fuel to take us to a friendly motel that will be hosting us at the end of our journey.

We have been looking forward to this break away for some time with a mixture of excitement and anxiety. Before we return in a weeks time, we will be dropping our son off at his new boarding school away from home.

Our trip home without him will be emotional, but we know that our son has a great attitude and potential to do well without us.

Our son has spent all his life growing up in a motel environment and has observed the noble art of running a business. He has seen the hard work that goes on behind the scenes and the commitment that is required. He has observed how we treat our motel guests and transact with them. Hopefully he has seen the big picture of where money comes from and has appreciated what other children take for granted.

It can sometimes be tough for a child to grow up in a motel, but we know that this experience may help him in some small way to succeed in his new environment and the challenges that lay before him...

Accommodation stats reflect tourism decline

The Southland Times

By Ben Heather

22 January 2009

There are more rooms in Queenstown Lakes but fewer people filling them, with accommodation arrivals plummeting 16.1 per cent in November.

Guest arrival numbers were down from 113,804 in November 2007 to 95,432 last November, reflecting a national 5 per cent decline.

Numbers were down from on the 2007 for every month since April last year, but capacity is up 5.2 per cent on last year.

Hotel Association's Queenstown representative Victoria Shaw, of Eichardts, said things were tough with hotels looking to staff levels to cut costs.

"Tourism New Zealand is talking 10 to 15 per cent (visitor arrival decline) but we're all realistically talking 15 to 20 per cent," she said.

"I'm sure everyone will be feeling it."

The increase in visitor accommodation during boom times 18 months ago had left some hotel managers in a tight spot, she said.

"It wasn't really a need, it was driven by developers and the real estate ... but when it gets tight the returns aren't there."

Many excess rooms were part of strata schemes where investors bought into individual hotel rooms, which were then managed for them for a return.

"You watch the real estate section of the paper. There are going to be a few mortgagee sales," Ms Shaw said.

Motel Association chief executive Michael Baines said motels had not been hit as hard as expected but tourist spots like Queenstown and Rotorua had been affected by a reduction in tour groups. Other areas such as Southland were holding up well, he said.

ROOM BY ROOM: Fewer people, more rooms Visitor numbers in November 2008 compared with the previous year: Queenstown Lakes Visitor arrivals: down 16.1 per cent Accommodation capacity: up 4.3 per cent Central Otago Visitor arrivals: down 1.2 per cent Accommodation capacity: up 1.4 per cent

Source: Click HERE

Motels Hit The Mark This Summer

I have been watching, New Zealand Apartments since they launched their marketing group five years ago. They have grown to about 50 apartments.

I was interested when New Zealand Luxury Motels was formed by the same marketing company and launched in May 2008 with over 20 motel properties. The motel properties were selected to fill in the gaps where there were no apartments and were based on the higher end motels that were equivalent to 4.5 and 5 Qualmark star ratings.

Those that are not Qualmark rated have been self assessed by the group and have granted themselves equivalent star rating status on their website.

Anton and Jules Wilke head the two accommodation groups after being involved in commercial tourism marketing for 14 years.

Anton and Jules market their apartment and motel product to international travel agents at events such as TRENZ and sales missions to UK, Europe, US and Australia. The main marketing focus is on travel wholesalers offshore and inbound tour operators.

What I like about the group is that there does not appear to be any gimmicks such as tariff specials, customer loyalty points, free nights, free breakfasts or other inclusions. The offer is clean and simple. The focus is on consistent quality. Many frequent travelers have been burnt by inconsistent quality levels and this grouping of accommodation appears to appease those that are seeking a consistent quality accommodation experience. I really hope that this will work for them.

The website is also clean and simple with a booking engine that displays tariff and availability for member properties. A quick scan would suggest that less than half offer instant on-line reservations with the remainder choosing to offer rooms on-request.

The wholesale accommodation business is a hard market that the motel product has traditionally struggled in. Ideally, properties that are serious about participating the in wholesale market should be setting their published tariff at a level to sustain a 20-30% commission.

In the wholesale business, management costs and marketing are always much higher than operating in the domestic market. To add to insult, the accommodation provider needs to carry the cost of credit and is always the last to be paid. To depend on this market takes a lot of dedication, hard work and time...

Motels that joined New Zealand Luxury Motels six months ago should not hope for a quick fix, however many will be already assessing their ROI to date as they head into uncertain times.

Time will tell if New Zealand Luxury Motels can give continued value to their members and survive dependent on the volatile wholesale market. I hope they can.

21 January 2009
www.voxy.co.nz

The New Zealand Luxury Motel collection is already proving to be a success with customers, even though it has been only six months since the 20 strong accommodation collection was launched.

In developing what they believe to be New Zealand premier motel collection, directors Anton and Jules Wilke selected only high quality, modern motels.

The majority of motels in the collection hold Qualmark® 4.5 or 5 star ratings. Of the few that don't hold a Qualmark, an internal New Zealand Luxury Motels grading has been applied. "We've visited all motels and certainly they are at least of the quality of the 4.5 to 5 star Qualmark properties, if not better", advised Anton.

New Zealand Luxury Motels cater for the traveller who is not wanting to compromise on quality and is seeking limited self-catering facilities. "Typically our customers staying in the luxury motel range are couples and they find the kitchenette style amenities suitable for their needs", says Anton.

International Marketing The creation of the New Zealand Luxury Motel collection emerged from the experiences the Wilkes gained as they developed their New Zealand Apartments collection over the last five years. "As we grew New Zealand Apartments we could see these quality motels being built around New Zealand but they weren't necessarily being well marketed to the international traveller", comments Anton.

Anton drives the marketing and sales activities which are aimed primarily at the international travel wholesaler.

"We launched New Zealand Luxury Motels at TRENZ in May 2008 and this allowed enough time for inclusion in agents brochures for this current summer season", he adds. Subsequent sales activities and training overseas helped to cement the collection with the travel trade.

New Sector: New Locations Anton identifies the emergence of a new sector in the motel product offering; that of well built, self-catering accommodation with high quality amenities and services.

The expanded geographic range also has the bonus of being able to provide quality accommodation in locations where no New Zealand Apartments were situated.

The New Zealand Luxury Motel collection opens up new geographical locations in destinations such as Whangarei, Hamilton, Wanganui, Blenheim, Hanmer Springs, Hokitika, and Te Anau. This has resonated well, especially with the European markets, advises Anton. Europeans often stay longer, are self-driving and highly independent. The style of the motels, and their locations in secondary or tertiary destinations, suit this type of traveller.

Together, both the motels and apartments collections offer a total of 70 accommodation choices in 35 locations nationwide. "We can offer a comprehensive, nationwide network of quality properties, both apartments and motels. Our customers really appreciate the convenience of being able to access the number of properties through our central reservations office", says Anton.

"Given the tough global economic conditions, especially in some of our key source markets, we're pleased with New Zealand Luxury Motel bookings over the summer", concludes Anton.

Source: Click HERE

Motels take a hit

Ooops! Not good news for the motel industry with November figures reflecting the month from Hell.

It is frustrating that the accommodation stats are 6-weeks behind, as we can only guess how December has shaped up and how January is now fearing.

Anecdotal evidence suggests to me that the crucial months of December and January will be "softer" compared to previous years and this does not bode well for motel businesses fortifying themselves for the winter months ahead.

It's a good time for moteliers to start getting friendly with the bank manager...

By DAVID HARGREAVES
BusinessDay.co.nz
21 January 2009

Motels have been particularly hard hit by a drop in international visitor numbers that is having a significant impact on the country's accommodation sector.

Statistics New Zealand said today that motels collectively had 80,000 less "guest nights", a drop of 9 per cent, in November compared with the same month a year earlier.

Across the whole accommodation sector, the number of bookings was down 4 per cent, led by an 8 per cent drop in bookings from international visitors. A total of 2.7 million "guest nights" were spent in accommodation in November.

The drop in the motel figures, which equates to 80,000 less nights, represented two-thirds of the overall fall for the whole accommodation industry.

The fall off in business for the accommodation sector is widespread, with nine of the 12 regions reporting falls. Worst hit was Bay of Plenty with a 13 per cent fall, while the Wellington region fared best with a 2 per cent rise.

The occupancy rate of accommodation generally in November was 52 per cent, down from 56 per cent in November 2007. Hotels, with 62 per cent, had the highest occupancy rate.

According to Statistics New Zealand, short term visitor numbers to the country were down by 9500, or 4 per cent in November compared with the same month a year earlier.

Source: Click HERE