Hotel showdown brewing: Training concept still an option
“As much as there is this general feeling of, ‘yay, it’s going to grow the pie,’ I can assure you occupancy over the last few months doesn’t justify another hotel.”
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An Invercargill training hotel concept isn’t completely off the table as ILT prepares for the city’s most competitive ever accommodation market with a new Distinction Hotel adding 150 rooms to the mix.
In 2019 the Invercargill Licensing Trust [ILT] and Southern Institute of Technology revealed it was partnering to create a training and hospitality venue at the Kelvin Hotel.
The plan was to create a link between the Kelvin Hotel and a neighbouring 47-appartment complex which SIT had planned to build on the corner of Tay St and Kelvin St.
With the centralisation of New Zealand’s polytechnics, and in turn the SIT board being replaced, it meant the apartment building development was shelved.
Although a few years on ILT CEO Chris Ramsay said the idea of partnering with the SIT for a training hotel isn’t completely dead.
“We are now at the point where actually there could be a new lease of life for it,” Ramsay said, while speaking at a Southland Business Chamber event last week.
Ramsay did not shy away from the fact that Kelvin Hotel’s occupancy levels have been affected after ILT opened its new seven storey, 78-room, 4.5 star Langlands Hotel in Invercargill in 2022.
And he was forthright in his view that there was not the demand in Invercargill for an additional 150-rooms when a new Distinction Hotel is completed and opened next year.
Invercargill-based Distinction Hotel Group owner Geoff Thomson is transforming the former Menzies Building into a hotel.
Thomson is confident the market in Invercargill can and will grow, in particular through inbound tour groups.
Ramsay isn’t so confident there will be the influx of tour buses that some are expecting.
“Probably the reality check is it is not like we haven’t worked closely with Geoff over the years. We are very aware of the group tours market Distinction operates with. We operate with all of those players already.
“As much as there is this general feeling of, ‘yay, it’s going to grow the pie,’ I can assure you occupancy over the last few months doesn’t justify another hotel.”
“Utopia is that demand suddenly picks up out of somewhere. There is no denying there will be share shift from us to Distinction and we are going to enter the most competitive market for accommodation - as far as operators go - in Invercargill’s history.”
Ramsay said that was with his “competitors hat on” though. With his “community hat on” he acknowledged another hotel being built in the city was exciting for Invercargill.
“Dunedin would give their left arm to have another hotel let alone the two that have been opened [in Invercargill]. It’s great for the vibrancy of the city.”
Ramsay said ILT was already fully aware of what plans B, C, or D might be for an establishment like the Kelvin Hotel if there is a further squeeze on occupancy levels.
“There is a very strong possibility we are looking down the path of a training hotel, but that is one of many opportunities that we see for SIT and ourselves,” Ramsay said,
Transforming the Kelvin Hotel into inner city apartments could be another option.
“I think we could all agree a great way to create a bit of vibrancy in the CBD is to have people living in it, and that’s not all that accessible at the moment.”
There could well be the potential for mixed use at the Kelvin Hotel, Ramsay said.
What could help in reviving the training hotel concept is the Government’s decision to disestablish Te Pūkenga and return autonomy back to individual polytechnics.