New report forecasts a shortfall of 26 hotels in next decade 24 May 2016
Related articles
- NZ consumers grow more upbeat, may resume spending Business
- Minister launches SmartGate in Wellington Travel
- Brownlee Leads Aviation Mission To Shanghai News
- Authentic Kiwi hospitality for 2011 rugby fans Property
- Unique website launched for Rugby World Cup Sport
- Knowles quits as CEO of KiwiBank Business
- Snow on The Remarkables Living
- NZ migration bolstered by British invasion Migration
- Sludge Report #192: The Naked Budget Columns
- Budget 2010 – Building the Recovery News
New report forecasts a shortfall of 26 hotels in next decade, above what's already being built
By Fiona Rotherham
May 24 (BusinessDesk) - An estimated 26 hotels above what is currently being planned and built will be needed over the next decade to meet expected tourism demand in New Zealand’s five major tourist centres, according to New Zealand Trade & Enterprise research released today.
The research is part of “Project Palace”, a programme aimed at speeding up new private sector investment in New Zealand hotels led by NZTE and the government’s Investment Attraction Taskforce.
The five centres - Auckland, Rotorua, Wellington, Christchurch and Queenstown, currently have just over 20,000 hotel rooms. The research suggests that by 2025, 5,171 additional rooms will be built, leaving a shortfall to predicted demand of 4,526 rooms – or 26 hotels the size of Auckland’s Sofitel Viaduct.
The biggest investment opportunities are in Auckland which has an estimated shortfall of up to 1,782 rooms and Queenstown, with an estimated shortfall of up to 1,421 rooms. Both have consistently had high occupancy rates of over 80 percent throughout the year and one of the main complaints by inbound tour operators at this year’s Trenz annual trade event for the tourism industry was a lack of available rooms in both places at peak times.
The Regional Hotel Market analysis and forecasting report found there was a current shortage of hotel rooms during high demand periods, particularly summer and autumn and when major events are on. The forecasts suggest demand for hotels will outstrip supply in the next ten years in all regions as occupancy rates continue to grow.
International visitors will be a major driver of hotel demand with growth in their numbers of 5.4 percent annually, particularly from China and Australia, and domestic demand by 2.5 percent a year to 2022. The latest international arrival statistics out today show the 3.27 million visitors for the year ended April 2016 was up 10.6 percent on the previous year.
The report says hotel owners have a positive growth outlook for the average daily rate (ADR) they can charge for rooms as a resulted of the limited new hotel supply and the new hotels were also likely to command a market premium. Queenstown ADR is predicted to grow most strongly over the next decade, from $168 in 2015 to $278 in 2025 while in Auckland it's likely to rise from $152 to $220 over the same period.
In Rotorua, where the mayor has called for government help in attracting investment in a new five-star hotel, room rates are expected to trend upwards but less than other main tourism regions because of the large tour and group visitors it attracts and an ageing hotel inventory. Annual ADR is projected to increase from $110 in 2015 to $139 by 2025.
The new Tourism 2025 update released this month highlighted the need for more infrastructure investment to ensure New Zealand has the facilities needed for sustainable tourism growth and to meet the industry’s targeted $41 billion revenue by 2025.
Tourism Industry Association chief executive Chris Roberts said the NZTE report identifies opportunities for new investors but also notes the danger of over-supply if too many hotels enter the market at the same time.
He points out Sydney’s hotel occupancy rate across the year is 88 percent and the average room rate $254 compared to Auckland’s occupancy rate ranging from the 70’s to 84 percent and the ADT still only $152.
“The ability to deliver additional hotels is heavily dependent on managing a number of constraints, including financial feasibility, site availability, resource and building costs, finance and timing delays,” he said.
At Trenz Roberts said the lack of year-round occupancy remains an issue for new investors and the government would have to start to be more imaginative in the way it attracted offshore investment in hotels with other countries offering things like periods of rates relief on designated sites or accelerated depreciation.
Government officials, the TIA, local government and the private sector are working together to identify available locations for additional hotels in each of the five locations and to attract new investment. The government has a target of attracting an extra $160 billion to $200 billion of capital in the next ten years and also to boost regional economies.
Historical preferences indicate demand for four-star and above quality hotels will be strongest in the next decade but the TIA’s Roberts said a range of accommodation will be required and the free independent travellers New Zealand is targeting are also keen on motels, providing they’re of the required standard.
Gary Paterson, director of the AOT Group, said some of the peak accommodation shortages in regional areas outside of the main tourist hotspots could be alleviated if our national chain of motels were given an upgrade.
(BusinessDesk)
News
Hilary Timmins' Award-Winning UK Documentary Series To Inspire NZ Students
29 Jun 2020 Education
Dream Catchers, produced and directed by Hilary Timmins, celebrates the success stories of more than thirty inspirational New... more
New Zealand reaffirms support for Flight MH17 judicial process
7 Mar 2020 News
Ahead of the start of the criminal trial in the Netherlands on 9 March, Foreign Minister Winston Peters has reaffirmed the need to... more
Business
NZ Government's Economic package to fight COVID-19
17 Mar 2020 Business News
The Coalition Government has launched the most significant peace-time economic plan in modern New Zealand history to cushion the... more
NZ Government announces aviation relief package
19 Mar 2020 Business News
Transport Minister Phil Twyford today outlined the first tranche of the $600 million aviation sector relief package announced earlier... more
Living
Diversity was Key at New Zealand Trade Tasting in London
6 Jun 2022 Food & Wine
New Zealand Winegrowers Annual Trade Tasting was recently held in London, on Wednesday 4 May, in Lindley Hall.
It was the first... more
Kiwi author stuns Behind the Butterfly Gate
12 Jan 2022 Arts
Hidden behind the Butterfly Gate is where the secret has been kept for 76 years...
New Zealand writer Merryn Corcoran’s... more
Property
Fairer rules for tenants and landlords
17 Nov 2019 Property
17 NOVEMBER 2019
The Government has delivered on its promise to the over one million New Zealanders who now rent to make it fairer... more
New Zealand Government will not implement a Capital Gains Tax
17 Apr 2019 Property
The Coalition Government will not proceed with the Tax Working Group’s recommendation for a capital gains tax, Jacinda Ardern... more
Migration
Boosting border security with electronic travel authority – now over 500,000 issued
19 Nov 2019 Migration
19 NOVEMBER 2019
We’ve improved border security with the NZeTA, New Zealand Electronic Travel Authority, which helps us to... more
Christchurch reinstated as refugee settlement location
18 Aug 2018 Migration
18 AUGUST 2018
HON IAIN LEES-GALLOWAY
The announcement that Christchurch can once again be a settlement location for refugees... more
Travel
Gallipoli Anzac Day services cancelled
19 Mar 2020 Travel & Tourism
The New Zealand and Australian Governments have announced this year’s joint Anzac Day services at Gallipoli will be cancelled... more
New Zealanders advised not to travel overseas
19 Mar 2020 Travel & Tourism
New Zealanders advised not to travel overseas
more
Sport
The Skipper's Diary: Sir Richard Hadlee honouring his father and NZ's Forty-Niners
27 Oct 2019 Cricket
NZNewsUK London Editor Charlotte Everett spoke to Sir Richard Hadlee about why he’s chosen to publish his father’s... more
PREVIEW: All Blacks v England semi-final
26 Oct 2019 Rugby
The two most convincing quarterfinals winners are set to square off in a semifinal showdown for the ages when the All Blacks meet old... more
Columns
Gordon Campbell on the Gareth Morgan crusade
11 Nov 2016 Opinion
Gordon Campbell on the Gareth Morgan crusade
First published on Werewolf
The ghastly likes of Marine Le Pen in France and Geert ... more
Gordon Campbell on the US election outcome
10 Nov 2016 Opinion
Column - Gordon Campbell
Gordon Campbell on the US election outcome
Well um.. on the bright side, there (probably)... more
Kiwi Success
Congratulations to Loder Cup winner
26 Sep 2018 People
25 SEPTEMBER 2018
The Loder Cup, one of New Zealand’s oldest conservation awards, has been awarded to Robert McGowan for 2018... more
Appointments to New Zealand National Commission for UNESCO
16 Aug 2018 Appointments
16 AUGUST 2018Appointments to New Zealand National Commission for UNESCO
HON JENNY SALESA
Associate Education Minister Jenny Salesa is... more
Recruitment
Historic pay equity settlement for education support workers
14 Aug 2018 Recruitment
14 AUGUST 2018Historic pay equity settlement for education support workers
RT HON JACINDA ARDERN
HON CHRIS HIPKINS
Prime Minister
The... more
Historic pay equity settlement for education support workers
22 Aug 2018 Recruitment
14 AUGUST 2018Historic pay equity settlement for education support workers
RT HON JACINDA ARDERN
HON CHRIS HIPKINS
Prime Minister
The... more