Timeshare pioneer and hotel developer Graham Wilkinson may be a white knight for out-of-pocket Sofitel Queenstown investors.
Builders Naylor Love this week began Wilkinson’s $2 million makeover of common areas in what even the developer labels “the troubled Sofitel building”.
Christchurch-based Wilkinson bought Sofitel’s leasing company in 2008 from failed development firm Perron.
Perron launched the five-star property in 2005 with global hotel giant Accor as manager.
Last October, Wilkinson snapped up the freehold of two floors of retail space. Now he’s banking on his makeover enabling Accor to hike rates for the 82-room hotel.
“We’re quite convinced that if we can…deliver the common facilities experience to the same degree as the rooms, we can really set the pace for NZ [room rates].
“We believe we can probably get a $100 increase from about $400 to $500 [nightly].”
If the plan comes off, it will be sweet music for 70-odd Sofitel investors who paid Perron $430,000-$570,000 per standard room – suites and penthouses went for far more. Some investors – former All Black Norm Hewitt was one – bought two units. In a complex offering, investors didn’t get freehold titles but in effect bought a share of hotel profits – when there were any.
One investor tells Mountain Scene since the five per cent guaranteed return ended in 2008 she’s only received one payout of about $1000.
Wilkinson agrees returns have been “poor” – less than five per cent.
“The hotel’s traded very well for the first three months of this year,” he says, “but that money will basically be put towards the refurbishment.”
The makeover includes a new entry and lobby, new reception and hotel cafe, a business centre and meeting room. The interior designer is Stewart Harris, whose earlier Queenstown hotel work includes the Wilkinson-developed St Moritz – of which he still owns a large slice – and the upmarket Spire. With work due for completion by July 1, Wilkinson is already planning another $2m remake of the rest of the ground floor and all the first floor, probably this time next year.
This will feature a new bar, private club lounge and designer gym – and possibly some rental spaces for “classy retail”, he adds.
“Clearly it’s not going to be video arcades.”