A company associated with five-star Sofitel Auckland Viaduct Harbour has gone into liquidation, with the loss of close to 140 jobs.

Viaduct Quays Hotel (VQHL) was put into liquidation on Monday, is closed and its website is not taking bookings.

VQHL as leaseholder operated the Sofitel Viaduct Harbour under a Management Agreement with Accor.

Tony Maginness, of Baker Tilly Staples Rodway Auckland, is now in charge of the business, wholly owned by Richlister Prakash Pandey, of the wealthy C.P. Group, which owns a string of hotels in New Zealand under various brands.

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Pandey told the Herald: "The hotel will re-open. I will update you closer to the time. It won't be long."

The liquidator is yet to issue an initial report.

The Sofitel Auckland Viaduct Harbour hotel "closed operations and the company ceased to trade prior to the company shareholders voluntary appointment of Baker Tilly as liquidator," Paul Farry, CP Group Legal Counsel, told the Herald.

"These steps were considered prudent by the directors to avoid large debts being run up in such a difficult trading environment.

"The hotel's closure is a result of the impacts of Covid-19 which particularly affected the Sofitel Viaduct Harbour due to its strong reliance on international visitors."

VQHL is 100 per cent owned by Prakash Pandey, of Mount Roskill. He is also a director, along with Grahame Fong.

The company was formed in 2011.

Viaduct Quays Hotel received a wage subsidy payout of $929,011.20 for 139 employees.

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"The Pandey Group recognise that the future landscape for tourist accommodation in New Zealand will be very different. To this end, the Pandey Group is planning to reposition the hotel as a more boutique offering in the market place as part of its recently announced strategic review and upgrade of its various hotel assets," Farry said.

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"They have already commenced a multimillion-dollar renovation of the Sofitel Viaduct with that in mind and with the intention to reopen as soon as practicable."

Farry said as the liquidation was a voluntary solvent liquidation the directors had advised they did not expect any losses to third-party creditors.

Hotel sector takes Covid hit

Hotels with exposure to the international market and not participating in the Government's isolation accommodation scheme have been devastated by border closures.

Hotel room revenue throughout the country dropped by 84 per cent in April and May, when the sector lost $185 million and thousands of jobs.

The NZ Hotel Owners Association says the economic impact of Covid-19 on the hotel sector has been severe, and the pandemic is expected to have a profound impact on global tourism for up to five years.

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The association's executive director, Amy Robens, has said members, many of them Auckland-based, have made mass redundancies; up to 80 per cent of the 10,000 people employed nationwide have lost their jobs.

Hotels will continue to trade in a downward cycle for now, as wider tourism demand is only beginning to re-emerge for 2021. In spite of some domestic tourism, hotel occupancy is forecast to be only about 25 per cent for the rest of the year.

About 20 per cent of Auckland's 86 hotels closed completely in April and remained closed the following month.

Those that did stay open did so with skeleton staff and minimal occupancy.

The association represents more than 100 hotels and members operate 11,000 rooms with a capital value of $3.8 billion.