Fresh political weight behind drive for another four-star hotel in Hamilton

Monday, 3 July 2023

Hamilton’s Novotel four-star hotel whose development was supported by the city council. Now there’s fresh political pressure to ramp up efforts to secure another similar facility for the central city, with more potential assistance from the council.

Fresh heavyweight political pressure is being applied to getting quicker progress on developing another big new four-star hotel for the central city.

Such a facility was the current “number one priority” for mayor Paula Southgate and economic development committee chairperson Ewan Wilson, the latter told a recent committee meeting.

A failure to act quicker risked Hamilton losing out on numerous business opportunities, such as conferences and events that demand more high-end accommodation, the hui heard.

Mayor Paula Southgate says she’s “frustrated” at the lack of progress on getting another four-star hotel for the central city.

While there are roadblocks to progress, the committee was told about measures the council might take to ramp up the chances of success for what’s been a long-talked of priority.

Southgate described a new four-star hotel as “one of my key strategies” that she followed up about with senior councillors on a regular basis.

She wondered what was going to make it happen “because at the moment I’m a bit frustrated”.

“How do we make a difference because this city needs a hotel. End of [story].

The city’s growth manager says competition for hotel developments from other big cities means Hamilton can be down the queue when it comes to attracting funding.

“We’re turning away mega-conferences right, so what is the thing that gives us a hotel in the shortest period of time, extra rooms, because we’re losing business right now, today.”

Wilson wants any new four-star hotel to have at least 220 beds and queried staff about the chances of it being started within several years.

Growth general manager Blair Bowcott said “we recognise the extreme criticality of additional [four-star] accommodation in the city“. More information on prospects was to be provided in a public excluded section of the hui.

Boosting visitor nights and use of key council events facilities was “severely compromised” currently.

Bowcott said “the case for a hotel, the demand, is very, very strong” but the primary problem getting started was who would fund and own it.

While a number of operators could be “very keen” to run a hotel “Hamilton is competing with other tier one hotel destinations for the limited capital to build and own” such a facility.

Auckland, Wellington, Christchurch and Queenstown were seen as “first priority” locations for investment by the sector.

“Hamilton ranks behind that,” Bowcott said.

A room at the four-star Novotel which got going with support from the city council - now there’s talk of it taking an equity stake in a new high-end city hotel.

However, Wilson noted the council’s municipal endowment fund (MEF) could be willing to put in equity and land, and Bowcott said staff were to work further with an advisor on options.

There was precedent for council funding, Wilson said.

“We did it with the Novotel. It made money in the end and it’s been an incredibly important economic enabler.”

The clear message over the political priority being given to progress showed “we’re expecting a result”, said Wilson. The end of the year is now the target for confirming new hotel plans.

Southgate questioned whether a start within two years was possible and Wilson said if the council was “focused and determined we can make that happen”.

All reports about a new hotel suggested the city would get more events and attract extra demand from business and government travellers, he said.

Bowcott said realism was needed over various issues: “It is our focus that within the term of this committee that a hotel development is secured.

“But a number of things have to line up for that to occur.”

Deputy mayor Angela O’Leary expressed frustration over the length of time it has taken to get traction.

“It’s been a really long journey and we haven’t been able to achieve anything.”

There could be concerns about whether a new hotel stacked up economically and whether it was the role of ratepayers to help fund it.

But she acknowledged the council may need to be a partner “to shift the dial”.