Whanganui Council considering a $55 million hotel!

Radio NZ reports:

A council proposal to build a $55 million four-star hotel and carpark is dividing opinion in Whanganui.

The project is included in the city’s draft long-term plan alongside proposals to cut services and sell $16 million worth of assets.

Mayor Andrew Tripe says current tough times should not preclude council from having bold aspirations, but not everyone is so sure.

The draft long term includes average rates increases of 10.6 percent – which are picked to go even higher – but that hasn’t stopped the Whanganui District Council floating the idea that it get into the hotel business.

This is just nuts. Ratepayers should not be funding hotels.

Tripe said the time was right.

“There’s no doubt that a four-star hotel is needed. We had a market demand study done completed by Horwath HTL hotel consultants who suggested that a 60 plus room four-star would be strongly desired for Whanganui.”

Of course the hotel consultants concluded a hotel is needed.

If there really is demand for a four star hotel in Whanganui, then one of the dozens of hotel chains will build one. That is how they make money. As they are risking their own money, they will weigh up the actual likely return vs cost.

Tripe said a new hotel would also allow Whanganui to bid for more conference business which it was currently missing out on.

That, plus a monorail!

Rates would need increase $30 a year per property though until 2039 to pay for it.

Only then was it envisaged the hotel would begin to make a return of $4 million annually.

LOL a business plan that it will take 15 years to make a profit is just nonsense. So much can happen in 15 years.