Hotel sector booming but growth uneven

The tourism boom is driving unprecedented growth for hotels, but Queenstown and Auckland continue to get a bigger piece of the pie.

Colliers International’s latest New Zealand Hotel Market Snapshot found Queenstown hotels had occupancy of 90 per cent and earned an average daily rate (ADR) of $240 per occupied room, from the start of the year to March. Queenstown ADR was up 15 per cent compared to the first quarter last year.

Auckland had 91 per cent occupancy and an ADR of $225 per occupied room, an increase of 15 per cent compared to the first quarter last year. Rotorua had a $140 ADR, which was up an 8 per cent on last year.

The amount of money hotels raked in on average grew across the regions, though Wellington, Rotorua, and Christchurch had less growth in the price of hotel rooms. Occupancy rates for the year plateaued in most main centres.

Colliers International national director of hotels Dean Humphries said it’s likely this year would be another recordbreaking one for hotels, especially due to the British and Irish Lions tour in June and July and the recent World Masters Games in Auckland.

Humphries said the 25,000 people who participated in the World Masters Games had driven up occupancy rates in Auckland, and expected the British and Irish Lions tour to have a similar effect in June and July. More than 20,000 rugby fans were expected.

Humphries said he had seen an increasing number of investors and developers reviewing the possibility of new hotel projects.

Marriott International is bringing a Four Points by Sheraton hotel to Queen Street in Auckland.

The 21-level, 255-room hotel, which will open later this year, had attracted ’’significant offshore interest’’, Humphries said.

Regional hotels are also catching the eye of foreign investors.

Colliers International said there had been increased investor interest in regional hotels which were making high returnsin the emerging tourism markets like Hawkes Bay, Taupo, Tauranga, Nelson and Dunedin.