Weekend Herald

Win­ter tourism and quar­an­tine stays pull ho­tels back from brink

- Oceania News · Travel · New Zealand · Auckland Region · Colliers International · Christchurch · South Island · Queenstown · Queenstown · Rotorua · Iceland · Wellington, New Zealand · Australia

Most of New Zealand’s key ho­tel mar­kets saw a sig­nif­i­cant spike in busi­ness over win­ter, even with Auck­land ex­pe­ri­enc­ing a sec­ond Covid- 19 lock­down, ac­cord­ing to new re­search.

Col­liers In­ter­na­tional’s lat­est New Zealand Ho­tel Mar­ket Snap­shot also found that av­er­age daily room rates have shown sur­pris­ing re­silience dur­ing 2020.

Dean Humphries, na­tional direc­tor of ho­tels at Col­liers, said that although oc­cu­pancy rates had de­clined sig­nif­i­cantly in the sec­ond quar­ter of 2020, as a re­sult of Covid19, they ticked up again by June.

“Oc­cu­pancy started to re­bound in early June af­ter the six- week na­tional lock­down ended, un­der­pinned by strong de­mand from Gov­ern­ment-con­tracted ho­tels utilised for 14- day manda­tory iso­la­tion, to­gether with a notable in­crease in do­mes­tic leisure and cor­po­rate ac­tiv­ity,” he said.

“Fur­ther im­prove­ment was wit­nessed in July on the back of the win­ter school- hol­i­day pe­riod, with all mar­kets ex­cept Christchur­ch with oc­cu­pancy lev­els of more than 50 per cent.

“Lev­els then mod­er­ated in Au­gust, with the ex­cep­tion of Christchur­ch, pri­mar­ily as a re­sult of Auck­land’s sec­ond lock­down, which re­stricted all travel in and out of our largest city, be­fore re­bound­ing again in Septem­ber.

“All key mar­kets in the coun­try recorded a sig­nif­i­cant in­crease in do­mes­tic guest nights in the third quar­ter of 2020 com­pared with the same pe­riod in 2019, not­ing manda­tory i so­la­tion of re­turn­ing Ki­wis played a sig­nif­i­cant role in this.”

The South Is­land was the big­gest win­ner, with do­mes­tic guest nights up 86.2 per cent in Queen­stown and 62.3 per cent in Christchur­ch.

Ro­torua was the top spot in the North Is­land, with do­mes­tic guest nights up 56 per cent, fol­lowed by Auck­land on 41.4 per cent, while Welling­ton took an 8.8 per cent hit due to a small num­ber of its iso­la­tion fa­cil­i­ties.

Humphries noted that although do­mes­tic de­mand has been strong, with­out in­ter­na­tional vis­i­tors, ho­tels were still only op­er­at­ing at oc­cu­pancy lev­els of be­low 50 per cent.

He said the sec­tor had yet to wit­ness any sig­nif­i­cant down­ward mo­men­tum in room rates.

“This was pri­mar­ily due to Gov­ern­ment- con­tracted busi­ness across some 32 ho­tels through­out many of the main re­gions in the coun­try, rep­re­sent­ing 7200 rooms. Stronger pat­terns have also been ev­i­dent dur­ing the week­ends and school hol­i­day pe­ri­ods.”

The av­er­age daily rate across all key mar­kets was on par with that of 2019. Ro­torua was the stand­out per­former, with av­er­age daily rates in­creas­ing 13.5 per cent in the year to Septem­ber.

Humphries says the con­tin­u­a­tion of a self- im­posed bor­der con­trol/ iso­la­tion regime and strong do­mes­tic de­mand will pave the way for the ho­tel sec­tor over the next six months.

“The re­cent an­nounce­ment of Aus­tralia open­ing up state bor­ders to New Zealan­ders sug­gests a re­cip­ro­cal tran­stas­man bub­ble may be forth­com­ing in the short term.

“Nev­er­the­less, any wider open­ing of New Zealand’s bor­ders to in­ter­na­tional trav­ellers is un­likely to oc­cur un­til 2021; to be­come the driv­ing force be­hind a wider re­cov­ery.”

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