Millennium & Copthorne Hotels says the company has already had more than 9000 night stays cancelled this lockdown, affecting profitability, and it is applying for the wage subsidy for staff at all its closed properties.
All its owned and operated hotels, with the exception of two operating as Managed Isolation facilities have been closed since New Zealand went to alert Level 4 on August 17.
In a statement they stated “Cancellations received to date exceed 9000 nights across all of our properties. The current estimated revenue that has been lost due to these cancellations does affect the profitability of MCK’s hotel operations but is not currently expected to affect MCK’s group financial position in a material way. We will continue to keep the market updated.”
The company said it had applied for the wage subsidy for employees at the hotels and corporate offices that are now closed thought to still number more than 1000 despite last year’s lay-offs. In February, Millennium & Copthorne Hotels posted a small profit of $1.9 million from its hotel operations but that was the last good news for the company and its investors. That was followed by lockdowns in Auckland, then Wellington, and now the whole country.
“The change of Alert Levels for the areas of New Zealand south of Auckland and Northland effective this week will not allow our hotels outside of those areas to reopen except for very limited essential services business,”
The past 18 months have been a sickening rollercoaster ride for the accommodation sector. Many businesses were tipped from record highs into last year’s Level 4 lockdown. Some laid off hundreds of staff – then struggled to hire them back again as the economy recovered unexpectedly through spring and summer.
Now, with Delta first stemming the flow of Australian tourists, and then domestic travellers, industry leaders warn the sector will need targeted government support to survive. Smaller hotel chains including Scenic, Naumi and Autolodge have already had their wage subsidies approved, as have tourism operators including Hobbiton, Skyline Skyrides and Bungy NZ. The Nando’s and Burger Fuel fast food chains are also claiming the subsidy.
Les Morgan, chief operating officer of the New Zealand-owned Sudima Hotel group, said his company hoped to get by without the wage subsidy but, ultimately, the whole industry would need targeted support to recover from this second hit.
He said he had been in tears last year as he broke the news to staff at one hotel after another, that their jobs were gone. He remembered, in particular, crying as he addressed a meeting of about 50 staff at Sudima Rotorua at the end of April 2020 – but an older woman at the back of the room had stood up and said, “Les, we don’t blame you”.