Three more rural hotels bite the dust

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This article was published 30/05/2015 (4027 days ago), so information in it may no longer be current.

RURAL hotels continue to close across Manitoba, with three more shutting their doors.

The Elm Creek Hotel, Waskada Hotel, and Red Coat Inn in Boissevain all closed in the past month. That brings to six the number of hotels known to have closed since the start of the year.

Three hotels shuttered within a week of each other last February, including the Mariapolis Hotel and the Leisure Inn in Newdale.

The Manitoba Rural Hotel Association says rural hotel beverage rooms are in crisis, and more will go down if the province doesn’t back off on taxes.

“I feel for the owners,” said association president Angelo Mondragon, who owns the Notre Dame Hotel in central Manitoba. “It hurts to see it happen, it’s a painful situation, but I’m also a hotel owner faced with the decision of how much longer can I do this before I walk away.”

Elm Creek Hotel owner Doug Lughas said he can’t make money. Lughas bought the hotel 21/2 years ago. He tried running it first, then leased it to someone else to make a go of it. Neither succeeded.

“It’s collapsed. Nobody can operate it. You can’t make any money here,” said Lughas.

Woojin Park, the owner of the Waskada Hotel and Red Coat Inn in Boissevain, did not return phone or email messages. An employee confirmed the hotels had closed. Park also owns the Souris Motor Inn.

Hotel owners have two main beefs. One is that beer vendors are only allowed to keep 17 per cent of revenue from vendor sales before PST and GST. The normal return in retail is about 30 per cent.

The second is that small rural hotels keep just 22 per cent of VLT revenues, whereas legions get 25 per cent and First Nations keep 90 per cent.

“I do have confidence we can change our situation. The money is coming in the front door” but government isn’t letting the hotels keep enough of it, said Mondragon. “It’s possible to turn the industry around if government is willing to work with us.”

The province has been in discussions with the hotel association, said a spokeswoman for Manitoba Liquor & Lotteries. “We… have been in conversations with them again as recently as this week to listen to their concerns and work together to address them,” she said.

The province has pointed out it has taken steps to assist rural hotels, such as raising the return on VLTs to 22 per cent and increasing payment for bottle return for small hotels by 1.5 cents, to 40 cents per dozen.

Mondragon said the province keeps delaying, saying they will meet again in the fall.

“The problem is right now. Hotels are closing right now,” he said.

bill.redekop@freepress.mb.ca