Hospitality Business Magazine

Heritage Hanmer Springs Hotel to close permanently

Hanmer Springs’ Heritage Hotel will not reopen after the Covid-19 lockdown. The increased number of holiday homes in the town and the financial pressure of the lockdown are being attributed for the permanent closure of the prominent hotel in the centre of Hanmer. 

It is believed forty full time equivalent jobs will be lost.

Graham Wilkinson, a director of Hanmer Management Ltd, which operates the hotel said there has been a slow deterioration of trading conditions in recent years.

“The proliferation of holiday homes operating in the Canterbury and Hurunui regions on booking platforms such as Airbnb have seriously undercut hotel occupancy levels.”

The news comes days after the Hermitage Hotel in Aoraki/Mt Cook proposed axing all but eight of its 178 staff and plans to start from scratch when it is able to reopen. Wilkinson, who also operates two hotels in Queenstown and the Rydges Hotel in Wellington, said a specialist hotel accountant’s report confirmed the Hanmer operation was not viable for the future.

“It’s simply not profitable in any way, shape or form. It’s pretty tough for everyone, but the reality is when you see it in the cold light of day, the hotel’s always been a bit of a challenge.”

Reopening the hotel after lockdown would have also cost a minimum of $300,000 and that money could not be recouped, he said.

The hotel’s 40 full time equivalent staff would be paid their full entitlements, he said. The company had received the Government’s wage subsidy and Wilkinson said 100 per cent of that money had gone to staff.

He said there could still be some jobs available for staff at other Heritage hotels and staff would be needed to look after the grounds.

Keeping the restaurant and bar open was not viable because the level of casual dining there before the lockdown was “insignificant”, Wilkinson said. 

The hotel’s 66 units are all privately owned and leased back to the hotel. Owners of those units jointly owned the land and buildings, which are run as a body corporate.

Christchurch man Doug Pflaum​, who has owned one of the units for 20 years, said he was not surprised at the decision to close the hotel. He had not received any payments from the operator since April 2019. 

He said the unit owners were considering their options and could possibly get together to rent out and promote the units themselves. 

Wilkinson said the owners of the units would meet soon to decide what to do with the property.

“No decisions have been made at this time.”