Record year for NZ hotel sector

Record year for NZ hotel sector

The New Zealand hotel sector is celebrating a record year marked by high occupancy rates and improved returns.

The 2014 results for hotel members of the Tourism Industry Association New Zealand (TIA) have added millions of dollars to New Zealand’s economy and resulted in productivity improvements that pave the way for increased investment, TIA Hotel Sector Manager Sally Attfield says.

Nationally, TIA hotel members’ occupancy for 2014 was at 76% - up 3 points on 2013. This is the highest annual occupancy rate in the last 10 years.

The Average Daily Rate (ADR)[1] was $144 (excl. GST), up almost $5, bringing Revenue Per Available Room (RevPAR)[2] to $109 (excl. GST), an $8 improvement on 2013.

“The 2014 hotel results reflect both the improvement in New Zealand’s economy and the increase in international visitor arrivals we saw during the year. Almost every region is seeing record results, with the exception of Christchurch where a significant recovery in the supply of available rooms due to hotel openings and re-openings has affected the statistics,” Ms Attfield says.

However, along with Auckland and Queenstown, Christchurch TIA hotel members recorded more than 80% occupancy in December.

The high national occupancy level puts New Zealand on a par with Australian hotels, where the December occupancy was 76%, according to STR Global data.

“However, our room rates still generally lag Australia so we have some ground to make up to ensure hotels have sustainable returns that encourage investment,” Ms Attfield says.

Tourism 2025 highlights the need to improve productivity across the tourism industry, to improve returns from existing investments and attract new capital. This will help the industry achieve its aspirational goal of $41 billion in visitor expenditure by 2025.

The TIA figures show that New Zealanders comprise about half of all hotel guests. Among international visitors, the hotels are recording increases in Chinese guest numbers and are noticing that US guest numbers are returning to pre-GFC levels. These figures are in line with overall New Zealand visitor arrival numbers, which were up 5% for the 12 months to November 2014.

Hoteliers are expecting a busy first quarter of 2015, with Cricket World Cup on top of events like Chinese New Year adding to an already busy peak season with strong arrival numbers forecast.

“Some hot spots are already close to being sold out at times through January and February, so we recommend travellers make their bookings as soon as possible to ensure they secure the accommodation they want,” Ms Attfield says.

[1] ADR is calculated across all hotel star grades and regions, so individual hotel rates may vary considerably.

2 RevPAR is a common measure of financial performance in the accommodation sector.

TIA Hotel Sector
TIA’s hotel sector represents the interests of over 130 members throughout New Zealand, including international chain, large independent and privately owned hotels. TIA hotel sector members employ 10,000 staff nationally, with annual revenues of more than $958 million.

TIA’s hotel members contribute to a monthly performance survey conducted by The Fresh Information Company.

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