Hotel rates mostly flat but Queenstown roars ahead

Friday, 17 August 2018

An executive king studio at the QT hotel in Wellington.

Occupancy rates in the hotel industry have been flat or falling in the first half of 2018 in the main centres.

However Queenstown was bucking the trend, CBRE real estate researchers reported.

The average daily rate for rooms in Queenstown was the highest at $241 and rising, compared with the next highest, Auckland, at $211.

Aside from Queenstown, growth in average daily rates for rooms slowed after strong growth in recent years, as the market adjusted to new hotels opening.

*Newly renovated Wellington heritage building reopens as a Hilton franchise

* 'Smart' hotel the latest to open in tourist mecca Queenstown**

The 179-room Distinction Hotel in Cathedral Square in Christchurch opened in May.

Occupancy rates declined in Auckland, rose for a short time in Christchurch, and were flat in Wellington and Rotorua for the first half of 2018.

For post-earthquake Christchurch, CBRE reported better occupancy rates rising to about 77 per cent in the past six months after 16 months of decline.

That was positive considering two hotels had opened last year adding 383 rooms, CBRE said.

A further 330 hotel rooms were under construction in Christchurch and due to open next year.

The daily rate had been flat in the garden city for the past four years at about $160.

Wellington's hotel market had flat occupancy rates at about 80 per cent for the past three years.

CBRE expected the 'muted growth' to remain for the rest of 2018.

Leisure guests made up half the customers of Wellington hotels where the average daily rate declined to $170 following three years of average 8.7 per cent growth a year, CBRE said.

The Hilton, Queenstown, where hotels are almost full in the summer months.

Auckland still had the highest occupancy at just under 85 per cent but Queenstown was nipping at its heels at about 84 per cent and rising.

CBRE said Auckland's occupancy dropped in the past six months for the first time since 2013.

It put that down to a lack of events drawing in tourists and high hotel rates putting off Kiwis visiting the City of Sails.

Domestic guests now made up half of the visitors to Auckland, down from 61 per cent three years ago, the CBRE report said.

Two key events last year- the World Masters Games and the Lions Rugby Tour - boosted hotel guest numbers in 2017.

The average daily rate in Auckland has climbed over the past three years but slowed recently to $210 in June 2018.

Over the past three months daily rates declined in Auckland compared with the same time last year when rates surged during the Lions tour.

A third of hotel guests in Auckland were airline crew, conferences and tour groups.

CBRE expected occupancy levels to stay where they were in Auckland and daily rates to increase.

Queenstown's average occupancy rose to largely down to Amway booking out the Hilton and DoubleTree hotels in April and May, CBRE said.

The resort's hotels were almost full in summer with average 92 per cent occupancy, higher than the year before.

Queenstown's average daily rate of $241 had grown between 14 and 17 per cent a year since 2016.

Rotorua's hotel occupancy rates had been stable for the past three years at 79 per cent. Rotorua hotels relied on leisure visitors and annual events for trade.

The daily rate at just over $130 in Rotorua was still growing but at about half the speed of the previous year. Tour groups made up nearly half of the hotels' guests, CBRE said.