Motel job losses likely in airport saga

Rotorua businesses could face a 5 per cent rates increase which could force job losses and closures in the city's motel sector, a businessman says.
With a rates increase, Rotorua Moteliers Association chairman Glenn Stafford said it could well be the final straw for some moteliers.
Mr Stafford said increased rates on top of rising costs for moteliers could signal more job losses in the sector and could force more moteliers out of business for good.
In the latest draft budget, the Rotorua District Council voted to keep the current rates framework which could see business rates rise to 5 per cent while residential ratepayers will only face an increase of 2.8 per cent, and farmers 3.1 per cent. The rates increases - along with minor cuts within council - will help pay for the $3.6 million needed by the council to pay off the interest on their airport debt.
Councillors voted yesterday at the resumption of their Corporate and Customer Services Committee meeting, where councillors were presented with three options on how to pay off the interest on their airport debt.
The council's vote was split down the middle, with chairwoman Janet Wepa having to make a casting vote.
Rotorua Chamber of Commerce chief executive Roger Gordon said it was disappointing the business sector had been called on to shoulder an "unequal portion of the rates increase".
"Recent media has already reported on the difficult time motels are having, this increase may well put a final nail in the coffin of many."
He said it would have a great impact on the accommodation sector with larger hotels rates rising by 5.2 per cent, rural commercial accommodation by 5.4 per cent and urban commercial residential, which includes most of the local motels, by a massive 5.6 per cent.
Last month, it was reported several moteliers had already been doing it so tough they had been forced to sell up.
Mr Stafford said the council needed to immediately enforce a capital value rate system as opposed to the current land value system.
"It's an unfair rating system," he said.
He said motels were already facing price rises in cotton and laundry services so "any increase in anything is bad".
Mr Stafford said most moteliers were already teetering on the edge.
Mr Gordon said the rates increase reflected the lack of understanding of many within council of the very difficult situation that business was currently facing.
He said the last two years had been difficult for business in Rotorua.
However, Mrs Wepa said she believed sticking with the current rates framework was fairer to more people.
"Everyone's struggling in the community, no matter what sector you're from."
She said businesses had benefited from rates cuts within the last three years while there were some people struggling to pay for everyday necessities.
Mrs Wepa hoped the small residential rates increase would keep money in people's pockets.
In turn, she said people could afford to spend more at local businesses.
Council chief executive Peter Guerin agreed residential ratepayers were doing it tough at the moment. He said while higher rates would be a burden for local businesses, the thing they were struggling with most at the moment was sales.
As suggested by Mr Guerin last week, ratepayers would no longer have to fund the $3.6 million needed by the council to pay off the interest on their airport debt.
Mr Guerin said he and other council managers had had to look at their entire organisation and had made cuts across the board.
No staff positions within the council are expected to be cut.
The final draft budget is set to be approved by March 30 and will be available for consultation in the week beginning April 4.