The Invercargill Licensing Trust could convert its Kelvin Hotel in Invercargill into a city center apartment if demand is affected by the opening of its new hotel in Langlands.
The Invercargill Licensing Trust will consider converting its Kelvin Hotel into a city center apartment if the new Langlands Hotel impacts demand.
The trust is due to open its new 4.5-star Langlands Hotel in Invercargill in March.
Langlands will have a capacity of 80 rooms when it opens, with the prospect of adding 40 rooms should demand exceed forecasts.
However, since this plan, Invercargill-based hotelier Geoff Thomson has brought the Menzies building to Invercargill with the intention of converting it into a 150-bedroom 4.5-star hotel.
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He hoped this hotel would open in late 2023.
News of this development has raised the question of whether there will be enough demand for the various accommodation spots to survive.
Trust chairman Alan Dennis said he had a plan B in place if the Langlands began to pull out of their existing accommodation business.
This plan B was to potentially convert the Hotel Kelvin, which opened in 1965, into a city center apartment.
“We’ve always said that the Kelvin could be ideal for apartments. It could be easily converted and you will get more foot traffic around the CBD. So that’s a possibility,” Dennis said.
The Ascot Park Hotel will remain the trust’s primary destination for major conferences even when the new hotel opens, Dennis said.
Trust officials are not confident there will be demand to accommodate two additional new hotels in the city center.
“Some people in Invercargill think there aren’t enough rooms for people to stay. On average, in my time, one week a year, we were full. So for 51 weeks, there’s plenty of accommodation in Invercargill. It’s the truth, I think,” Dennis said.
Added to this is a global pandemic and the impact this has had on hosting providers.
When the decision was made to invest $40 million in a new hotel, Dennis said it was thought a wave of middle-income people from India and China were ready to travel the world.
Visitors, for now at least, are limited to domestic tourists.
Dennis felt that increasing domestic tourist numbers might help gain some perspective, but it would take hard work.
“There won’t be enough demand if we don’t move our butts as a city and promote the place… Invercargill has not been a place where people have come in droves to the past, but I can see if we’re limited to traveling to New Zealand, or there’s an Australia-New Zealand type bubble, we could have a lot of tourism.
Despite the high level of uncertainty in the accommodation industry, Dennis has always supported ILT’s decision to empty its cash reserves and build the Langlands Hotel.
The decision to invest heavily in a new hotel was about the ILT putting a stake in the ground and showing its faith in the city, he said.
Dennis felt it created trust and helped spark other important projects in the Invercargill centre.
“We made a business plan, but the decision was not strictly that we owned a hotel, it was also for the good of the community. Invercargill was ready for someone to say, “We have faith in the city, we’re going to take that step.”