Auckland five-star waterfront hotel Sofitel Viaduct Harbour is about to re-open, according to staff and a company chief but an investor has raised concerns.
The hotel shut in July when a company behind it went down, liquidators saying it suffered lack of occupancy when Covid struck.
Contractors were at the hotel this week bringing in equipment and although the property remains shut to guests, one staff member said a soft opening was planned for next Thursday and the hotel would be fully open by October 19.
If it does re-open next week, the hotel at 21 Viaduct Harbour Ave will have been shut for three months from mid-winter after financial difficulties.
Prakash Pandey of C.P. Group is the Auckland businessman running the largest privately-owned New Zealand hotel chain established by his father, Charles Pandey. He is also one of two directors of the liquidated hotel company along with Grahame Fong.
He said this week of plans for the shut hotel: "The refurbishment project to elevate the hotel to a new level is completed and it is opening soon."
On July 6, Pandey - sole shareholder of Viaduct Quays Hotel - called in liquidators. The hotel had been shut and Tony Maginness and Jared Booth of Baker Tilly Staples Rodway issued their first report naming creditors.
Creditors included ACC, Sky Network TV, Inland Revenue, Lane Neave Lawyers, Meridian Energy, Rentokil, Mitre 10 Retail, BOC, Fullers Group, Placemakers, Pandey, electrical business J A Russell, NZ Post, Pandey Viaduct Suites, Resene Paints, Nestle NZ trading at Nespresso and the Royal New Zealand Yacht Squadron.
Vodafone, Watercare, Waste Management, St John Northern Region, Orbit Corporate Travel, Loaf Handcrafted Breads, Southern Hospitality, HRG New Zealand, Crown Tours and Travel, Deadline Express Couriers, CP Group and Auckland Council also appear, along with a long list of individual names which could indicate the overseas-based owners of the suites or rooms were also claiming money.
Chai Kwok Kit and Eveline Hooi Yoke Ying, Chai Siew Chin and Lai Yeow Wun, Chakkaphant Manlitsathit and Malipa Manlitsathit, Chan Soon Onn and Lin Chee Yee, Cheah Min Loong and Cheah Soo Ling, Chi Wah Yuen, Chin Cheuk Ngen and Chang Bee Hua, Chong Chin Lin, Chong Sun Pin and Hoo Yang Hwa and Colin Jee Fai Low were some of the individual creditors named in the first report.
The liquidators explained the relationship between the company being liquidated and the global hotel chain: "The company operated the Sofitel Viaduct Harbour in Auckland, which was managed externally and from leasehold premises."
Many of the hotel suites are owned by investors in Singapore and Malaysia, who bought into the project developed by Nigel McKenna of Melview around the time it was under construction.
One investor told the Herald he strongly objected strongly to the July liquidation.
"By putting VQHL into voluntary liquidation, leases were terminated with independent unit owners who collectively own 88 rooms," the investor said.
"CP owns up to 84 rooms and the hotel's common areas. It plans to operate a boutique hotel under Sofitel, with the exclusion of independent unit owners and due to CP's control of the body corporate, place restrictions on independent unit owners' usage of their rooms. I am one of the independent unit owners," the investor said.
Liquidators blamed the hotel's closure on Covid.
"The hotel ceased trade prior to the date of appointment as a result of the Covid-19 epidemic which detrimentally impacted upon customer numbers. It could not be used as an isolation facility. The liquidation should not result in loss to third party creditors. Subsequent to the date of the liquidators' appointment, all employee claims have been cleared," they wrote in their July report.
The hotel was previously branded as a Westin and has had a troubled history with investors. In 2011, the Herald reported how at one desk, a hotel room will cost about $600 a night. A few steps away, an identical room will be just $99 a night.
That was the strange situation last decade at the hotel, then called the Westin Auckland Lighter Quay. Rooms were seized by owner/investors who had rebranded their share of Westin as Hotel Viaduct Harbour and slashed rates by three-quarters.
The Singaporean and Malaysian investors last decade withdrew 116 rooms from Westin, leaving the American-owned hotel chain with only 58. Sliding to two-star status will help generate cash, after unpaid rent of $6.8 million accumulated, the owners say.
The 116 rooms were then being marketed as "five-star hotel at two-star rates".
Graham Wilkinson, body corporate chairman at the time, said in 2011 that the new cut-price deal aimed to fill rooms but rates would rise during the Rugby World Cup when some five-star hotels hoped for $1000/night.
"It may seem incongruous to be slashing room rates on the waterfront on the eve of the Rugby World Cup, but that merely indicates how committed the room owners are to start creating income from their investments," Wilkinson said when that trouble erupted.
Wilkinson was central to a resolution and soon after that, CP bought in and the hotel was rebranded Sofitel, with Accor taking the management contract.
An Accor spokesperson said yesterday a statement would be issued about the hotel's re-opening this month but that could not be published until next week.