10.08.2005
Smoking ban the final straw for Carterton hoteliers.
Tony and Kathryn O'Regan purchased the Club Hotel in Carterton a little less than four years ago.
A considerable investment in installation of a commercial kitchen and restoration of the hotel building saw the O'Regans
shape the Club into a vibrant, successful business.
Tony and Kathryn believed they had made a relatively sound financial investment while at the same time providing a
somewhat different social venue for the region.
What the O'Regans could never have made allowances for however, when they invested in the Club Hotel, were future
legislative changes that would have a sweeping negative impact upon the hotel industry.
"Regular alcohol excise increases, almost inevitably followed by wholesale price rises over and above the tax increases
ate into profit margins, but we had made allowance for that", says Tony O'Regan.
"We felt a little guilty having to pass on the full price rises to patrons, so we absorbed some of those increases
ourselves".
"Business was still viable despite the regular profit margin decreases. It was something we could work around".
"What we were unable to work around was the Holidays Amendment Act, the Gambling Act, and then the final straw, the
Smokefree Environments Amendment Act".
"Two months into the smoking ban and our profits had plunged by 50 percent and you didn't have to be Einstein to
calculate that the winter period would result in an even greater downturn in trade".
"The 50 percent down turn in profitability was approaching 'break even' so we made the decision to close down the hotel
before trading moved into the red".
"Enacting legislation to appease the conscience of a handful of politicians and social engineers is detrimental to small
business and does little to instil confidence by the business community in the present government".
"The present government's legislative frivolity brought on the Club Hotels closure and for Kathryn and I, a rethink
about owning and operating a small business in this country".
"We made a commitment to the Wairarapa region when we moved here and will not be selling up and walking away".
"We plan to 're-brand' the business into backpacker accommodation and a private function centre and then pray we are not
struck down again by further inane legislation".
The Club Hotels demise came as no surprise to WIN Party leader John van Buren.
"Hotel closures have been inevitable ever since the smoking ban came into force and unfortunately, the more the plight
of licensees is highlighted, the greater the 'shrug of shoulders' from Labour and Green politicians".
"A socialist nanny state is supposed to take care of its people, is it not, so what's happened to this present
government's duty of care for those in the hotel industry?"
ENDS