Coronavirus: Desperate moteliers house the homeless to avoid losing their businesses

Tuesday, 21 April 2020

Nelson's Balmoral Motel is among those providing accommodation to the homeless through the Housing First initiative. Video first published in July 2020.

Desperate motel operators struggling to pay rent are opening their units for emergency housing to survive financially.

Eighty per cent of moteliers lease their premises and some that never, or only rarely, took clients from welfare agencies are now doing so to save their homes and businesses.

When lockdown started Nelson motelier Belinda Mellor was offered a 'lifeline' contract with the Ministry of Housing to fill most of her 14 Tahunanui Beach units for up to 12 months.

'We would not have survived without out it. We sold our house to buy the business and we were wondering whether we'd have a roof over our heads.'

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The 'no vacancy' sign outside a motel used to mean full up, but under Covid-19 it may mean that there are no guests at all and the business is closed.

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Belinda Mellor runs the Balmoral Motel in Nelson with husband Peter. She hopes that taking their premises out of the visitor market to house the homeless will make it easier for her competitors. 'This way there will be 14 rooms less battling for the few people that will be around and maybe another motel will survive because we are not part of that feeding frenzy.'

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Mellor said it felt right to help agencies get the homeless off the street to prevent spread of coronavirus, and her new guests were extremely grateful.

For Ghost Native, it was his first time staying in a motel and he appreciated the free accommodation.

Ghost Native was homeless and is thankful to be staying at Balmoral Motel in Nelson, close to Tahunanui Beach for the duration of the lockdown.

'I was living in my car for six months … It's great there's a shower, you're warm, you're dry, you're clean and you get food given by the Salvation Army.'

In the past some motels have refused to take emergency housing or WINZ clients because of bad behaviour, damage to property and concerns they scare off other guests.

However, In Rotorua two five star motels are now housing close to 100 people closely supervised by the Visions of a Helping Hand Charitable Trust which was forced to close its Rotorua shelters because they could not meet lockdown social distancing requirements.

Trust founder Tiny Deane, who is also managing clients at three Taupo motels, lives on site at the Rotorua motel complex.

Rotorua night shelter founder Tiny Deane is relieved a local motel complex agreed to open it's doors to the homeless during the Covid-19 lockdown. He hopes having some of the 1000 Airbnb properties in the region come back onto the long term renal market will help ease the housing crisis. (File photo)

There are security guards day and night, as well as daily visits by Maori wardens and social workers.

The rules are strict - no alcohol, no drugs, all children in bed by 8pm, and lights out for adults by 11pm.

Ron Hunter of Taupō's Prince Motor Lodge talks about the difficulty of operating under lockdown.

Deane said it was an opportunity for those staying there, including Black Power and Mongrel Mob members, to turn their lives around.

'When you're in a night shelter where the bloke next to you is only one and a half feet away, you're both snoring and smelling each other's toe jam, it's not very nice.

'But when you're in a five star motel you have a spa bath and 58 channels on Sky and Netflix.

'Some of these rough sleepers feel like they have struck gold, some of them are going for runs and walks

New Zealand has about 29,000 motel units and in the year to September last year about one third of guests were from overseas, versus two thirds Kiwis.

'It's such a nice place they are all in now, these guys and the ladies, the alcoholics and drug addicts, they can see the light at the end of the tunnel.'

Many of New Zealand's 2000 or so moteliers wish they could see some light at the end of the coronavirus tunnel.

Empty motel car parks are a common sight as coronavirus restricts domestic and international travel. Ron Hunter runs the Prince Motor Lodge in Taupō and he says that apart from the occasional essential worker, they have no bookings until October.

According to data company STR, occupancy for commercial accommodation from mid March to mid April was 5 per cent nationally compared with 75 per last year.

Although some motels have offered cut price packages for stranded tourist in places like Christchurch, that custom is dwindling as repatriation flights carry them home.

Based on Hospitality NZ surveys, about 10 per cent of motels have closed their doors, and after another month at level 3, chief executive Julie White said that number could double.

Motels were among the first to be hit back in January and February when Chinese arrivals stopped, and having paid hundreds of thousands for a lease, motel tenants paid monthly rentals of anywhere from $10,000 to $100,000 depending on the size and turnover of the property.

Moteliers say now is a good time for central and local government to finally make Airbnb toe the line over health and safety standards so they can all operate on a level playing field.

While some landlords were generous in offering rent reductions, holidays, and repayment plans, others have refused to cut their tenants any slack and threatened to turf them out if they missed monthly payments.

Stuff spoke to two operators whose landlords had requested details of their personal assets - in one case the registration numbers of their cars - to assess the potential for recouping any outstanding debts.

Few lessees were prepared to be named for fear of inflaming already delicate relationships with landlords.

A motelier now single-handedly running her business north of Auckland is worried about ending up jobless, homeless and in motel emergency housing of the kind she has been providing to others.

'There's no reassurance, no negotiation, no compromise, they wanted their money. The landlords are not prepared to share the pain.'

Ron Hunter operates Taupō's Prince Motor Lodge with his wife and daughter.

'People who run bars and restaurants have somewhere to go home to … a lot of moteliers have their family living and working in the business, so to lose their business is to lose everything.'

He has applied for bridging finance from his bank under the Government guaranteed loan scheme to keep going, but he said that only worked for those who were solvent at the time the announcement was made.

He was disappointed business assistance packages to date had not done anything meaningful about the rent issue.

'Something that says the landlord has to sit down and have a realistic conversation.'

Long time motel broker Ray Hart is not alone in predicting a rise in previously uncommon lessee evictions.

'Many moteliers at the moment are like a possum caught in the head lights, they don't know where to go, or what decisions to make.'

'Do they throw in the keys now or borrow the money to try and keep the business going?'

Lessees own chattels such as furniture and bedding, so can take those items with them.

But Hart said owners could simply refurnish, put in a manager to run the motel until trade picked up, and resell the lease once tourism picked up.

Hospitality NZ accommodation rep Nigel Humphries was trying to sell his freehold Anchorage Motels in Te Anau, but has taken the business off market until things come right.

In the meantime, he said the tourism hiatus caused by Covid-19 was the perfect time for central and local government to finally make Airbnb meet the same standards and pay the same commercial rates as other commercial accommodation providers.

The day after the lockdown was announced, he said 10 Te Anau Airbnb properties came onto the long term rental market, and action was needed before they reverted to short term lets.

'We'll have these houses coming back online and potentially destroying us again. It's definitely the time to tidy this up.'