Desperate moteliers house the homeless

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 it. We sold our house to buy the business and we were wondering whether we’d have a roof over our heads.’’

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

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

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 tourists, 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 three, chief executive Julie White said that number could double.

Motels were among the first to be hit 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.

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

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 headlights, they don’t know where to go, or what decisions to make,’’ Hart said.

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