Anger over loss of rent guarantee

Wellington's Holiday Inn hotel

Disgruntled Sydney-based investors in Wellington's $100 million Holiday Inn have rallied to discuss their concerns and talked about forming an action group.

Paul Sills, an Auckland barrister, said he had met a large group of investors last month and a Wellington lawyer said he had been approached by several worried room owners.

The investors are concerned about problems with their guaranteed rental payments but Sills said the Holiday Inn hotel was not the first to suffer failures on guaranteed rent returns.

Sills said he had acted on other cases, including representing developer Jim Speedy over problems at Takapuna's Spencer on Byron when guaranteed returns changed there.

Hotel developer and owner Melview Group has told the investors rental guarantees are due to expire at the end of this year and it cannot continue those so has changed the arrangements.

Hayden Porter of Galway Tourism Investment Group and Galway Hotel Management (Wellington) wrote to investors last month to say returns would vary depending on room occupancy.

Investors will get real or net returns on their rooms from now on.

A Melview spokesman said this was caused by factors outside the control of the management business.

"The hotel starts going on to net returns at the end of the year in any case as per the original investment," the spokesman said.

Changes in the financial returns from rooms were the fault of the global financial crisis and Melview would stand by the Holiday Inn, he said.

"We are confident that the hotel's trading and occupancy will continue to improve and it is estimated that Holiday Inn will achieve a 5 per cent net return in the coming year ..."

Joshua Kim is a member of the Australian group representing about 90 Holiday Inn investors trying to locate about 100 Singaporean and Malaysian investors who also bought into the hotel.

Kim has told investors that he wants to form the HIW action group which will have its own bank account and will aim to recoup arrears, interest and costs on the rooms "in the shortest time possible".

HOLIDAY HELL
Holiday Inn Wellington investors:
* Bought rooms on guaranteed rent.
* Have had delays getting money.
* Now will get net or real returns.
* Group is forming to protest.