Three star hotels out perform posher lodgings as occupancy rates flatten

Tuesday, 14 January 2020

Three star hotels were the only band to experience higher occupancy rates last year.

Lack of new major events this year is expected to hit the hotel industry as occupancy rates flat line.

Statistics from Tourism Industry Aotearoa's 190 member hotels show last year's average occupancy rate of 79 per cent was the same as in 2018, and three star hotels were the only star band to record occupancy growth.

TIA chief executive Chris Roberts said the figures confirmed that the recent spectacular growth in international visitors had ended.

Auckland hotel occupancy rates dropped slightly in 2019 to 82 per cent, their lowest in five years, and a drop in air crew stays was partly to blame.

The region covering Taupō, Hawke's Bay, and Gisborne was the only one to record a small 2 per cent rise, and Auckland hotels reported their lowest occupancy in the city for five years.

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Delays in opening the NZ International Convention Centre at Auckland's SkyCity were compounded by last year's disastrous fire and it is not yet clear when conferences will be hosted there.

TIA said this was partly due to a drop in air crew room nights reflecting a small reduction in air capacity out of Auckland Airport.

And the 3 per cent rise in occupancy of three star hotels could be put down to the lack of investment in that area with a focus on building new four and five star accommodation.

The average national hotel rate was slightly down and Roberts said that with no new major events scheduled in New Zealand this year, hoteliers were not expecting to see any significant improvement in their bottom line.

'No growth in hotel income will eventually impact on employment and reinvestment.

'The challenge will be compounded by new hotels that are due to open around the country, with more than 1200 new rooms expected to become available in Auckland alone by the end of 2020.

'In 2021, New Zealand will host the America's Cup and APEC but the impact of these events will be felt less in regional New Zealand.'

Roberts said events did a lot to boost hotel occupancy and there had not been anything really significant since the Lions Tour.

Delays in opening the SkyCity convention centre following last year's fire would also affect the hotel sector because conference customers came in the off season and new hotels would have been relying on that.

'When those people made the commitment to build they would have expected that convention centre to be there.'

Just over half of hotel guests were New Zealanders.

Among major overseas visitor markets, the USA and UK all increased their share of nights in hotels compared to 2018.

China was static, while Australia and Japan decreased their share of room nights for the year.