Coronavirus causing big losses

One of the country’s largest hotel chains, Millennium & Copthorne Hotels New Zealand, has lost nearly $3 million in revenue so far from Chinese tourist cancellations, and it expects more losses.

Millennium & Copthorne, owning and managing 20 hotels here, said the novel coronavirus would hit its first three months of operations from the beginning of January to the end of March.

‘‘A number of our hotels in high tourism areas are receiving cancellations from several Chinese operators as the Chinese and New Zealand governments’ travel bans and other containment measures come into effect,’’ Millennium & Copthorne said.

‘‘Cancellations received to date will result in revenue loss of between $2 million and $3 million, with more cancellations expected for future months. We have been advised that this revenue loss will not be covered by insurance. Management is implementing urgent response plans to mitigate the effect of these cancellations.’’

A health and safety plan was now operating fully at its hotels.

Tourism NZ said the decision to stop travellers from China coming to New Zealand to help prevent the spread of coronavirus could have about a half-billion-dollar impact on New Zealand’s tourism sector.

Millennium & Copthorne is also weighing up whether to appeal a High Court decision that rejected a case that claimed the Auckland bed tax on hotels and motels was unlawful. A group of hoteliers formed the Commercial Accommodation Ratepayers group to challenge the hotel and motel levy.

Millennium & Copthorne Hotels managing director BK Chiu said the company was disappointed by the High Court judgment on the accommodation provider targeted rate and would review its options with its lawyers.

The hotel group is the second largest operating in New Zealand and owns and manages about 20 hotels with just over 2500 rooms, according to the Asia Pacific Chains and Hotels Report 2018 by tourism consultants Horwath HTL.

In New Zealand, its hotel brands are Millennium, Copthorne, Kingsgate and Grand Millennium.

At the same time as talking about the losses in the first weeks of 2020, the company also reported a profit of $49.7m for the 2019 calendar year, up marginally from $49.4m in 2018. The company’s profit of $49.7m was earned from revenue of $229.7m, almost 5 per cent ahead of the year before.