Don’t discount


Millbrook chief warns against dumping room rates

Drastic discounting of hotel rooms is putting Queenstown’s reputation at risk.

That’s the fear of David Onions, boss of exclusive Millbrook Resort near Arrowtown.

Onions is appalled that “purpor­­-tedly first-class hotels” are slashing normal nightly tariffs to as low as $99 a room.

“Queenstown shouldn’t be a discount destination or it will lose its lustre, the very thing that attracts us so much to it,” he says.

“There had been open discussions between the heads of industry saying, let’s not go back to discounting – and blow me if that’s not the case.”

Examples of major Queenstown hotels heavily discounting this month through the Wotif late-booking website include:

$160 for a $455 Heritage room 

 $109 for a $275 Copthorne room 

$111 for a $330 Rydges room 

$99 for a $248 Heartland Hotel room

Queenstown hoteliers are on a slippery slope, Millbrook sales and marketing boss Kim Carpenter reckons.
“Everyone figures since my four competitors are doing it, I have to match it.”

Onions adds: “We’re cannibalising each other. Once you get to a certain price point, you’re effectively giving [rooms] away.”

Local Copthorne and Rydges hoteliers wouldn’t comment this week on Onions’s criticisms.

Queenstown Hotel Council chairperson Victoria Shaw can understand hoteliers discounting to maintain cashflow – “they’ve got staff to pay and bills to pay” – but she’s concerned about margins.

“What happens is there is not reinvestment back into the hotel for refurbishing and things like that, and when we come out of this [recession] and can afford to put the rates up, the hotels will actually be looking pretty shabby.”
Not that putting rates back up will be easy.

“It comes down to a perception of value,” Shaw says.

“If somebody’s come into your hotel [and] paid $100, then next time they have to pay $200 and nothing has changed, there is a perception they’re not getting value for money.”

Like Onions, she argues that discounting affects Queenstown’s reputation.

“Queenstown is meant to be the jewel in the New Zealand crown and people should be paying for that experience.”

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