B&B owners threaten closure as Operation Pitbull’ business tariffs eat profits

2011-10-05 00:00

BREAD-and-breakfasts owners in the city have threatened to close their businesses following exorbitant rates levied on their water and electricity accounts by the Msunduzi Municipality.

Guy Henderson, owner of Briar Ghyll Lodge in Athlone, said: “We’ve been operating a well known historic Bed-and-breakfast for the past 12 years which has provided both business people, local and foreign tourists with a wonderful perspective of Pietermaritzburg and delightful accommodation.”

He said with the new property rates bill which has been imposed on bed-and-breakfasts and the new electricity and water tariffs, he can no longer afford to keep his B&B open and will be forced to close down.

“My rates bill has gone from R10 000 a month to R17 500 a month and that’s without the increase in water and electricity tariffs. With my B&B already struggling from the recession these new tariffs are crippling and the final straw in trying to keep my establishment viable and a float,” said Henderson.

He said he plans to de-register his business so that it can be taxed as a residence.

“I will also be retrenching several members of staff,” he added.

Pietermaritzburg Chamber of Business CEO Melanie Veness also wrote a letter to the administrator, Sibusiso Sithole, regarding the matter.

“Just prior to my leaving Pietermaritzburg Tourism, I organized a consultation session between the accommodation sector and the municipality,” it read.

She said there was great unhappiness at the time.

“B&Bs that were registered with the municipality had always been charged residential tariffs. As a result of ‘Operation Pitbull’, a number of them were suddenly charged business tariffs.”

Veness said in some cases further amounts were raised, being the difference between business tariffs and residential tariffs back-dated for three years.

“This was ridiculously unfair, because these B&Bs hadn’t tried to avoid paying anything — they had paid what they had been billed.”

She said they explained that suddenly changing policy without consultation was punitive because B&Bs set tariffs in advance, which they use to quote clients.

Since the profit margins are extremely low, any significant increase in costs would mean operating at a loss, she said.

Pietermaritzburg Tourism chairperson Bunny Boola said the council made a negative decision which would not attract new people into this growing tourism sector.

“I don’t see the rational in this decision because B&Bs are still a relatively small business,” Boola said.

Attempts to get comment from the Msunduzi Municipality were unsuccessful at the time of going to print.


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