Hotel room revenue down 40% on last year
HOTEL room revenue across the country has plunged more than 40%, room occupancy falling to just half of what it was last year.
Data from New Zealand’s largest hotel benchmarking programme shows what a tourism group says is the devastating impact of the Covid19 pandemic.
The Tourism Industry Aotearoa hotel data survey became Hotel Data New Zealand (HDNZ) last year and covers almost threequarters of all hotel rooms in New Zealand.
HDNZ chief executive Chris Roberts said the data included hotels providing border isolation services, but that had only softened the blow.
From 2016 to 2019, average hotel occupancy had been about 80% — until the pandemic hit and borders were closed.
‘‘Average occupancy in 2020 barely made it to 50%. The average rate for a hotel room also slipped, and these combined factors resulted in a 40% fall in the average revenue per available room to just $91.17.’’
At those revenue levels, the majority of hotels which remained open last year were operating at a loss.
The plunge in income was felt across all regions and all hotel categories.
For example, average revenue per available room at threestar hotels fell from $95 in 2019 to $50 in 2020; while for fivestar hotels, it declined from $214 in 2019 to $123 in 2020.
Regionally, the biggest decline was in Queenstown, where average hotel occupancy fell from 82% in 2019 to 42% in 2020, and average revenue per available room fell from $207 to $96.
Auckland was the only region in the country to maintain average revenue per available room above $100, but at $103 this was down from $161 in 2019.
A group representing the hotel sector said plummeting hotel revenues came as no surprise, as forward bookings for December and January showed hoteliers what was coming.
Hotel Council Aotearoa said it had repeatedly warned Government ministers, politicians and agencies how ‘‘pivoting to domestic’’ would not, on its own, be sufficient to shore up the sector.
Many hotels offered a product geared towards international travellers. Domestic travellers had different needs, typically requiring less in the way of service addons and often travelling in highly seasonal patterns.
‘‘It has been a fast downward spiral since Covid first hit in February. With border closures came the loss of effectively all international visitation at New Zealand’s hotels,’’ Hotel Council Aotearoa strategic director James Doolan said.
Revenue was only part of the picture. Hotel propertyrelated and finance costs continue to accrue, as in normal times.
While 31 hotels were operating as managed isolation and quarantine facilities, other properties were suffering.
‘‘New Zealand’s hotels are essential infrastructure playing a critical role in our tourism industry.
‘‘Without internationalstandard hotels, New Zealand will not win our fair share of highvalue overseas visitors once borders eventually reopen.
‘‘Hotels have responded to Covid without any industryspecific support, but we’re now almost 12 months in and the full extent of the problem remains poorly understood outside the hotel sector,’’ Mr Doolan said.
Rather than helping hotels survive until borders reopened, some local authorities were looking at ways to increase hotelspecific costs and taxes, which was extraordinary, given the continuing operating challenges hotels faced, he said.
❛ It has been a fast downward spiral since Covid first hit in
February