A shareholder’s accounts show a string of losses at one of Queenstown’s swankiest hotels – but the ex-manager says the place actually breaks even.
The business and lease for five-star Eichardt’s Private Hotel – which charges $1600 a night – is up for sale.
A foreign shareholder’s company accounts dating back to 2003 – and obtained by Mountain Scene – show a result ending in red ink every year.
Based on the stake owned by the foreign investor’s Eichardt’s Private Hotel LLC company, the business racked up losses of $2.7 million during the six years to June 30, 2009.
Its smallest loss was $166,000 in 2003 – the worst $769,000 in 2009. Annual revenues peaked at $1.9m in 05-06 but fell away to $1.42m by 2009. Yearly rent was $292,300 in 2005 and will have increased since.
Long-time former Eichardt’s manager Victoria Shaw, whose father Bill launched the luxury property in 2001, says there’s more to those figures than just the hotel business.
“My understanding is, Eichardt’s was basically run as a loss-attributing company,” Shaw says.
“So everything got dumped in there, probably more for the overseas shareholders than anything – for their tax.”
The hotel business is actually owned by the Highland Resorts joint venture, Shaw says, which also owns Branches Station, a high-country run near Skippers Canyon.
“The hotel itself broke even over the last six years or so,” Shaw says.
“But because the shareholders were doing all sorts of other things, we ended up with a lot of stuff that wasn’t hotel-related in there.”
Branches Station lost money? “Well yeah.”
Shaw stepped down from running Eichardt’s this April, shortly after her father sold out to the remaining eight owners.
One shareholder is a trust linked to Stephen Tindall, The Warehouse founder – he’s also a director.
When it opened, the first-floor hotel set new standards in Queenstown, following a virtual rebuild of the historic building after the devastating flood of 1999.
Former prime minister Helen Clark became a regular guest.