An application has been filed to put Aspen Manor Motel on Gray St in Hamilton into liquidation.
A Hamilton motel is facing liquidation after earning more than $3 million in two years from the government to house the homeless.
Aspen Manor Motel on Gray Street has earned $3,120,615.29 over the past two years – between March 2020 and July 2022 – since the start of the Covid-19 pandemic.
It is just one of more than 200 vendors who have earned millions of government dollars during the Covid-19 pandemic as the country grapples with a housing crisis and soaring cost of living.
The Department of Social Development has disbursed a total of $788 million nationwide to house 37,887 people between March 2020 and July 2022.
Figures communicated to Things under the Official Information Act, showed the agency had spent a total of $104 million on the top 20 accommodation providers in Waikato – with Aspen Manor Motel in 16th place.
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But whether there is a room at the hostel is unclear.
People could be seen inside the motel and a car left the property when Things visited.
The lights were on in reception and the windows were open, but the door was locked and no one answered a knock on the door.
A woman who answered the 0800 number said she didn’t want to talk about the liquidation.
On the motel’s website, rooms could be booked from January 1 next year, but on February 17 an application was filed to have Aspen Manor 2016 Limited removed from the business register.
A winding up petition was filed on May 30 and heard in Hamilton High Court on July 4.
Waikato Motel Association President Narinder Sagoo said some motels made a lot of money providing social housing, but businesses failed for many reasons.
“There will always be a flow in the industry.”
“It’s sad for the industry. Government guaranteed income would be expected to help cover the costs.
He said the association tries to provide overall support for business owners, but “sometimes people have problems”.
There was also general recessionary pressure, with things like rising interest rates.
As Fieldays approached – in November this year due to Covid-19 – Sagoo said Hamilton did not have enough accommodation to cope with the surge in tourist numbers.
But that was a problem before motels were filled with people in need of government-funded emergency housing.
He was optimistic that the motel industry would cope with help from Airbnbs, bed and breakfasts, hotels or even people opening their homes to visitors.
“It’s just a challenge and it will pass.
“But there are issues the government needs to reassess, and that’s social housing.”
Sagoo said motels play a crucial role in the tourism industry and must return to it.
“We don’t expect social housing to be long-term,” he said. “We have to get back to tourism, it has to happen.”
He said New Zealand has long depended on the tourism industry and foreigners bring money to the economy.
But there were worries about what would happen when people in the northern hemisphere started going on vacation, while motels were still being used as emergency accommodation.
He believed the industry was strong enough to reinvigorate, but wasn’t sure what that would look like or how the transition would happen.
“That’s the riddle we face.”