Rotorua hotels share the love
Rotorua hotel guests eat and drink their way through 1000 litres of milk, 740kg of red meat, 300 dozen eggs, 270kg of rice and pasta, 290kg of tomatoes and 330 heads of lettuce every day of the year.
As a result, Rotorua hotels spend $6.8 million a year on food and drink supplies, with a high proportion going directly to local suppliers, according to a new study commissioned by the Tourism Industry Association New Zealand (TIA) nine member hotels in Rotorua.
The research shows that Rotorua hoteliers’ commitment to purchasing locally puts 59% or $32.4 million of total hotel expenditure into the local economy.
“We always knew our hotels had strong local linkages, but this project has highlighted the sheer volume of hotel expenditure flowing into the local economy through wages, contractors, food and beverage supplies and local government rates,” says TIA Hotel Sector Manager Sally Attfield.
Staff gross pay of $20.9 million made up the largest expense for Rotorua’s hotels, with $17.3 million being paid directly into the Rotorua economy as net pay to employees. The remaining $3.6 million was PAYE, KiwiSaver and other deductions, much of which potentially flows back into the local economy as government services and pensions.
Collectively the hotels provided 810 jobs during 2014, equivalent to 3% of Rotorua’s 28,000 person workforce.
Rotorua’s hotels spent $5.1 million on repairs, maintenance and capital expenditure of which $3.3 million had a local linkage. Almost without exception, the tradespeople were locally based, meaning hotels are supporting many jobs across the local building industry.
Hotels contributed $1.1 million directly into the local economy through rates paid to the Rotorua Lakes Council. Although a large portion of this expenditure was for user pays services consumed by the hotels, more than a third was for general rates which flowed on to benefit the whole Rotorua community.
Social responsibility also featured strongly among all the hotels, with $160,000 of benefit being provided to the Rotorua community during the year. Activities hotels were involved in included providing breakfasts for primary school children, fundraising for charity, offering free accommodation and dining for local raffles and staff time to work on community projects.
Destination Rotorua Chief Executive Mark Rawson says: “Tourism businesses spending locally are an important aspect of increasing the value of tourism for the Rotorua economy. Even with the national hotel chain purchasing policies placed upon them, Rotorua’s TIA hotels have been doing an exceptional job of spending locally and we look forward to the hotels increasingly sharing the love as the Rotorua economy realises its $1 billion visitor expenditure vision.”
The Rotorua visitor industry Vision 2030 seeks to increase the volume and value of the Rotorua tourism industry, growing existing Rotorua businesses and attracting new investors to the district.
New businesses to the district will improve the opportunity of hotels and other existing businesses to purchase locally and will help the visitor industry achieve its aspirational goal of $1 billion in visitor expenditure by 2030. This will contribute to the national Tourism 2025 goal of almost doubling total tourism revenue to $41 billion.
Highlights from the Rotorua TIA member hotel local linkage study
- $32.4 million a year or $90,000 per day of hotel expenditure has a linkage with the local Rotorua economy and community
- Rotorua TIA hotels provide 810 jobs which equates to 3% of Rotorua’s workforce being directly employed by Rotorua TIA hotels
- Rotorua TIA hotel employees collectively receive $17.3 million in net wages
- $3.3 million annual hotel expenditure on repairs, maintenance and capital expenditure has a local linkage
- $1.1 million of annual hotel expenditure on sales and marketing is paid to local marketing providers such as graphic artists, printers, sign-makers, web developers and radio advertising
- Rotorua Lakes Council receives $1.1 million annually from hotels in property rates
- Hotels spend well over $600,000 a year on milk and meat products sourced from New Zealand’s agricultural industry
- Hotels provide $160,000 of benefit to the local community through fundraising activity, donations of hotel products for raffles, donations of used but quality saleable linen and furniture, and staff time to work on community projects
About the Rotorua TIA member hotel local linkage study
Rotorua’s nine TIA member hotels for the 2014 year commissioned Destination Rotorua (a business unit of Rotorua Lakes Council) to undertake a study to quantify locally linked hotel expenditure.
TIA’s Annual Operating Survey of operating and financial activity was the source of total expenditure for the nine hotels. The DR survey determined the percentage of local linkage for each expenditure type. The results of the TIA and DR surveys were utilised to calculate a local linkage dollar value for each expenditure type.
Click here to read the full report.