Len Brown's Spend & Hope

It looks like socialist mayor, Len Brown has saddled hapless Auckland ratepayers with a 10-year rolling-maul of rate increases well beyond the likely rate of inflation. Brown's mantra of taxing towards prosperity has allowed the signing off of "nice to have" pet-projects that include:

* $2.86 billion city rail loop.
* $18.6m cruise ship terminal.
* $16m superyacht facility.
* Free swimming pools for children 16 years and under.
* $10m for waterfront theatre. 

One of the more bizarre items on Len Brown's shopping list is a budgeted $3.2m to purchase a playmate for Auckland Zoo elephant, Burma. 

Accommodation providers will be wary of attracting the brunt of rates hikes and the possible introduction of a "bed tax" that was embedded into the Council's draft long term plan. A proposal to levy a daily impost on each visitor staying in commercial accommodation would be used to "contribute towards council transport costs and to offset rates rises" looks increasingly likely as the increased rates burden start to bite. 

While Accommodation providers will be burdened with rates increases and the possibility of a fresh new tax, it looks like Auckland City Council is also trying to manipulate the local accommodation market by touting for investment in a new downtown five-star hotel.

Councilors love getting involved with hotels - especially 5-star facilities. Offering incentives (corporate welfare) and meddling in the free market allows councilors great ribbon cutting photo-ops. A gleaming brand-new hotel is seen as a badge of progress and a mystical key that unlocks streams of cash from previously lost tourism opportunities. The reality is that any edifice that is built due to behind the scenes sweetheart deals and the cronyism of public officials will have serious unintended economic consequences including cannibalising competing businesses. 

The managing director of Millennium & Copthorne Hotels, BK Chiu has some interesting observations:

The head of a major hotel company has criticised Auckland Council for touting for investment in a new downtown five-star hotel, saying no more hotels are needed as the country is already saturated.

BK Chiu, managing director of Millennium & Copthorne Hotels New Zealand, told investors in the NZX-listed company the group had already made a submission to the Auckland Council about its plans and how they might affect the hotel industry.
Downturns in tourism out of Europe, the United States and Australia were continuing to hurt existing operators, he said at the group's annual meeting in Auckland yesterday.

No-one would build a hotel in Auckland based on current room rates, he said.
"Part of our submission [asks], `how have hotels been doing in Auckland?' – and I can go back 10 years."

Indexing over the past decade shows room rates have not kept up with inflation, he said.

Hotel occupancy for the year to December 2011 was down to 64.3 per cent across the hotel group, which has 34 hotels nationally, down from 66.4 per cent in 2010.
The group's submission about Auckland's future urged the council to stick to creating demand as Wellington has successfully done.

"Let us look after the supply side," Chiu said.

New Zealand typically built capacity to the maximum which just hurt the industry and created wildly fluctuating room rates.

"We've seen it in Auckland, we've seen it in Rotorua, we've seen it in Queenstown," Chiu said.

"There's enough rooms in Queenstown to last the next 25 years assuming you have 3 per cent growth."

Source: Click HERE

iPhone 5 Release?

I love rampant consumerism, in particular the self-perpetuating build-up before the release of a new iPhone. If history trends are correct, the new iPhone will be called the iPhone 5 and will be released with hysterical fanfare some time in October.

Model          Release date
iPhone         29 June 2007
iPhone 3G   11 July 2008
iPhone 3GS 19 June 2009
iPhone 4      24 June 2010
iPhone 4S    14 October 2011
iPhone 5      ?

According to the building buzz on the internet, the biggest upgrade feature will be a larger screen that will make the new iPhone 5 comparable with current HTC and Samsung hero phones. The possible introduction of a larger screen has apparently come with the blessing from the grave of former CEO, Steve Jobs that was previously opposed to a screen too large to reach the outer edges with your thumb.

Other rumoured new iPhone features include a 12-megapixel camera, A6 quad core processor and liquid metal chassis... 

History also tells us that often Apple rumours that are published as fact before the release are often wrong...but that doesn't stop Apple fan-boys and girls providing Apple with free consumer generated publicity by building anticipation to ferocious levels while trying to second-guess what will be on offer. 

Whatever the specs of the iPhone, when it is finally released the hysteria generated will ramp-up demand for smartphones and leapfrog the change in consumer web browsing behavior. As the iPhone 5 becomes the must-have consumer item, the older model phones will be recycled into the hands of consumers that will be upgrading from non browser enabled phones and are unable to afford new. 

iPhone owners more often than not, obsessively look after their object-of-desire and can't even bring themselves to throw away the original packaging. The second-hand phone market will soon be flooded with some very good quality phones.

For accommodation providers, this means that the widely touted prediction that by 2014, more people will be using mobile devices to browse the internet, than desktop devices - is more likely to become reality. 

In most surveys, travel is the number one motivation for mobile search. The best thing an accommodation provider can do at the moment is to buy a mobile device and start looking at their business through the eyes of a consumer.

What's Hiding Under That Motel Bed?

It was a lovely, serene day when the Google camera car breezed past the sleepy Black Stump Motel in April last year.

No one knew at the time, that under one of the motel's beds was hidden incriminating evidence that could unlock a 21-year-old murder case.

Items discovered in a motel room that the murder victim stayed in for about a week before her death in the central-west of New South Wales, has sparked a second inquest which opened at Tamworth Coroner’s Court yesterday.

"Sergeant Jason Darcy told the court that the motel’s owners found the secret compartment during renovations in February.

It contained a hacksaw blade, a business card for a United Kingdom insurance company, a toilet roll, the butt of a rifle, a package of condoms dating back to the time of Ms Hill’s death, and a used condom."

Ewww! Better check under those motel beds!

Source: Click HERE

More Sky TV Hysteria?

Moteliers will be rubbing their hands with glee with the prospect of Sky TV getting a slapping after pinko compulsion aficionados, Clare Curran and Jim Anderton raised concerns about Sky's business success.

Sports bodies that fund and administer public interest groups' sporting hobbies are apparently handing over cash to Sky to televise their events - I would have thought that, Clare & Anderton would have been in favour of using other-people's-money to televise sporting events?

Maybe the answer to curtail this anomaly is for the government to simply stop funding the sporting bodies in the first place?

Sky TV accused of 'monopolising' sports

The Commerce Commission is being urged to widen its investigation into Sky Television....

Motel Parenting

As micro-managing parents we regularly use technology to hector our teenage children. 

I was amused to read Mrs Motella's recent one-way text conversation with our reluctant and distracted 16-year-old boy - obviously he had more important issues to cope with instead of communicating with his exasperated mother for the last 2-days:

The Patel-Motel

I spent a bit of time yesterday helping a recent immigrant get settled into her new flat.

She has a remarkable story. She came over to New Zealand 6-months ago from India in the hope of improving her and her family's life. She has left behind her husband and her 3-year-old son while she establishes herself. After completing exams and going through a process of practical on-the-job experience, she has recently managed to qualify to New Zealand standards and is working shift work part time until a full time position becomes available in her profession.

I got the impression that her modest 2-bedroom flat that is now sparsely furnished with a few x-motel items that I donated was a lot better than the environment she had left behind in India. The only item of significance she had purchased was an old 10-speed bike she needs to commute to work.  

What amazed me about her was her burning drive and ambition. She has a positive attitude and was extremely happy and grateful that she is living in a beautiful country with such a high standard of living.

Once reunited, this family will add tremendous value to society. I couldn't help fantasizing about a regime where we could selectively export some of our own ungrateful, non-producing members of society in exchange for ambitious immigrants. I wondered how the average deadbeat welfare dependent Kiwi that is overburdened with entitlement would cope after being parachuted into the middle of India?

With this in mind, today I purchased, Life Behind The Lobby a book that tells the story behind the 'Patel-Motel' phenomenon in America.

Incredibly, Indian Americans own about half of all the motels in the United States. Even more remarkable, most of these motel owners come from the same region in India and—although they are not all related—seventy percent of them share the surname of Patel. Most of these motel owners arrived in the United States with few resources and, broadly speaking, they are self-employed, self-sufficient immigrants who have become successful—they live the American dream.

I wonder to what extent this phenomenon has occurred in the New Zealand motel industry?

Dunedin's New Hotel?

I see that a radical proposal to build an imposing $100 million hotel development in the bleak, windswept industrial port area of Dunedin has been announced this week.

An unnamed party has commissioned a lawyer to front the plan.

The proposal is to build a five-star, 28-level hotel and apartment accommodation that features  a swimming pool, a rooftop restaurant, an all-season entertainment rooftop area, car parks and a penthouse presidential suite. If built, the building will be the tallest in Dunedin and stand out from the crowd with the use of aluminum-framed textured facades and extensive use of glass.

The overall look of the stark design is bound to evoke controversy and it's scale will radically change the accommodation scene in New Zealand's largest provincial outcrop.

I can see that two camps will quickly form.

Those that will support the project will become swept-up in the glamor of the hotel business and envision themselves impressing guests as they sweep through an impressive chandaliered hotel lobby. Like most people, they assume that tourism is an easily understood one-dimensional business that provides great streams of income. They blindly assume the mantra, "build it and they will come" and believe this alone will attract hoards of tourists that were eager to visit before, if only the city had such an impressive facility.

A portion of these supporters will also put their money where their mouth is and eagerly fondle the hotel development's prospectus that will make no promises beyond a locked-in modest return for the first 2-years. The graphs of potential returns printed on glossy paper will presumptuously elevate skyward and will attract cheap finance for the development company from local Ma and Pa "investors.".

The hotel will attract a major international brand that will manage the business of the hotel and this will be seen as vindication that the development will be an outstanding success. The major players - the big names, Sheraton and the like - are in fact awake to the harsh realities of abysmal ROI from hotel ownership. Consequently they no longer own hotels and have become franchise operations that rent their name, offering a pooled marketing service and clipping the actual hapless hotel owners ticket for a piece of their turnover.

The other camp that will form will be the busybody social-minded folk that believe they have a collective right to impose restrictions and rules upon the productive. Dunedin will have its fair share of socialist cardigan-wearing, academic non-producers that will be earnestly forming committees against the development. The glass and aluminum facade of the proposed hotel will be like red-rag-to-a-bull to these hand-wringers that will be earnestly clinging-on to the concept that all development should be centrally planned and in keeping with Dunedin's old-world charm.

After the stadium blowout, it will be interesting to learn if the cash-strapped city council will be supportive and offer any enticements (ie corporate welfare).

The resource consent process, the fawning and the howling from interest groups will be interesting to follow.

The GC

While the Banks/Dot.com saga continues, the real story that has captured my attention is....the reaction to the first television screening of a NZ's mockumentary, The GC - A contrived brain-dead glimpse into the egotistical lives of tatted-up, gangsta Maori Australians (Mozzies) living on the Gold Coast. 

On behalf of NZ taxpayers, NZ On Air generously handed over $420,000 to assist the show's production.

The howling that has ensued has been highly amusing and commentators have formed two distinct camps. The first camp take a "positive" view and believe the television series has its place - they either enjoy switching off their brains and watching eye-candy or celebrate the fact that young Maori are being portrayed as "successful" by not appearing on Crimewatch.  The other camp have quickly written off the series as trashy and an embarrassment, but want to see taxpayer funds directed into more high-brow television production.

As usual I have formed my own camp. My observation is that love-it-or-hate-it, The GC is a successful show (assuming that the initial high viewer ratings continue). We get what we deserve and the TV3 viewer stats tell us that a hard-core of Kiwis enjoy to gazing at the contrived lives of narcissistic wannabes.

As the show appears to be successful, was the decision to provide corporate welfare justified? Er..no. 

In fact NZ on Air should be disbanded immediately. Why should a parental NZ on Air board dictate and distribute welfare to producers of "a colourful range of local television, radio, music and new media content to extend choices for New Zealand audiences?"

But would have The GC been produced without taxpayer funding? Absolutely!. The well-proven formula that appeals to the lowest common denominator appears to work in the marketplace. However, success is not guaranteed as the the market will dictate that there is a limit to these type of shows.

If we don't fund it, will we just get an endless array trash media...I don't think so.

Instead of the producers of all types of media spending time and resource lobbying to tap into other-people's-money, maybe they should focus on what the rest of us do - stand up on their own feet and let the market decide. 

The type of media consumers view is rapidly changing and a conveyor belt of talented folk have now got access to cost effective platforms that allow them to showcase their passion. It is also possible to expose your media project idea to a wide range of people and crowd source funding from willing buyers.

...Like this guy, that is creating a multi-media project on The Motels of Route 66. Luckily, America doesn't appear to have a government broadcast funding agency that is stifling the market.

 

Naked Motel

Are you a motel finding financial times tough? Are you looking for an innovative way to get more "bums-on-beds?"

You may be inspired by a quirky x-Brit that operates The Fawlty Towers Motel in Cocoa Beach, Florida that has come up with a plan to improve the bottom line of his rapidly declining motel business.

From today, the motel plans to fill its numerous vacant rooms with naked patrons in a last gasp effort to defer permanently closing the doors after years of declining trade.

The decision to "promote family oriented nudism" is to set the establishment apart from the increasing competition from larger chain hotels.

Thankfully, the motel owners will remain clothed, however their guests may go nude as long as they remained within the confines of the motel.

Judging by the way this titivating news has gone viral, it would appear that this promotion is off to a good start.

I'll be keeping a very close eye on future developments...

Is your business run for your convenience or your customers?

It's a simple question that is worth considering.

For some accommodation providers, the iconic TV series Fawlty Towers is a series of real-life snapshots of dealing with ungrateful and awkward customers.

Life would be so much easier without customers. You could spend your life pottering around without cleaning up after them and answering repetitive, inane questions...