98 per cent of Queenstown hotel rooms empty in April

Wednesday, 6 May 2020

Queenstown hotels saw revenue per available room plunge from $204 in April 2019, to $1.70 last month. (File photo)

Queenstown has borne the brunt of coronavirus with hotel occupancy rates in April close to zero.

The dramatic drop in demand is revealed in Tourism Industry Aotearoa's monthly survey of 200 hotel members who reported vacancies at unprecedented levels.

Hoteliers said the high vacancy rates highlighted the urgency of allowing more leisure travel when the country drops to alert level 2.

Queenstown hotels reported an occupancy rate of just 1.4 per cent in April, compared with 85 per cent for April 2019, and over the same period the average daily room rate fell to $119, from $239.

* Some Hermitage accommodation could remain open

* Tourism operators at Aoraki/Mt Cook plan to open as soon as possible**

Nationally hotel occupancy for April was 15 per cent compared with 80 per cent last year, and the average daily room rate dropped from $178 to $157.

Tourism consultant Stephen Hamilton said the “dire” results nationally were no surprise given the border closure, and showed how critical it was to get domestic and Trans Tasman travel going.

“This is absolutely and completely unprecedented in the history of the hotel industry.

Sudima hotel staff in Auckland wearing masks during the level 4 lockdown. Auckland hotels have fared slightly better than those in the rest of the country because they are being used to quarantine incoming passengers. (file photo)

In Auckland the average daily room rate of $176 in April had barely changed and Hamilton said that was because hotels there were providing quarantine facilities for New Zealanders arriving back from overseas.

“If it wasn't for that, they would be empty and closed as well.”

“How short term is this situation, given we are not allowed to travel, and hotels are really only being used for essential workers and quarantining?

“The question is how fast will these hotels reopen and what will their occupancy be as the industry gasps its way back into life.”

Tourism Industry Aotearoa chief executive Chris Roberts declined to comment on the survey results supplied to Stuff because they had not yet been circulated to contributing hotels.

But he stressed the need to loosen up coronavirus alert level 2 guidelines which currently only allowed essential domestic travel.

Roberts said the need to allow 'safe' domestic travel was highlighted by a Reserve Bank forecast of an 8.8 per cent reduction in New Zealand’s GDP output under level 2, virtually all of it coming from a constrained tourism sector.

The Heartland Hotel in Christchurch during the level 4 lockdown. In April Christchurch hotels reported an occupancy rate of 14 per cent, well down on the 81 per cent they enjoyed in April 2019.

Updated level 2 guidelines are being released on Thursday and the New Zealand Hotel Owners' Associations supported the call for change.

Chief executive Amy Robens said the nose dive in business in April was expected as the full impact of Covid-19 made itself felt.

“We don't expect May and June to be much better.'

For that reason hotels wanted clarity on what the new rules would be at level 2, so they could make a call on whether it would be viable to open.

“Hotels have shown they can operate safely at level four, we have really stringent health and safety protocols in place, and we have followed Ministry of Health guidelines to the letter.”

Robens said the number of hotels forced to close their doors for lack of guests also showed the importance of more targeted assistance and an extension of the wage subsidy beyond 12 weeks.

She did not have figures on hotel job losses to date, but recent announcements include the decision to permanently close the Heritage Hotel in Hanmer Springs and a decision is expected on Friday on whether the Hermitage hotel and associated businesses at Aoraki/Mt Cook will shed 170 jobs.

'The harsh reality is that we are in a holding pattern and will need to make some tough calls around redundancies in the coming weeks; we just can't hold our staff after the wage subsidy expires.

“We have people who have worked in the hotel industry for 10, 20, 30 years, and it's critical that we retain that knowledge and human capital,' said Robens.