Better days on the horizon for NZ’s hotels

Saturday, 16 August 2025

It’s still a time of recovery for New Zealand’s hotel industry, but leading developers and hoteliers are confident brighter times are ahead - although more big events are needed.

Hotels are a key part of tourism infrastructure, and there are 209 three to five star hotels across the five main tourism centres, JLL’s latest report shows.

More broadly, the Hotel Council Aotearoa says there are about 350 hotels around the country, and all up they employ about 17,500 people. Motels and other accommodation are on top of that.

The fortunes of hotels are critical to the industry the government wants to make the country’s number one export again.

The biggest players in the local and Asia Pacific hotel sector were in Christchurch this week for the fourth annual Aotearoa Hotel Industry Conference and Exhibition (AHICE).

Many of them spoke at sessions over the course of the conference, and the message they delivered was consistent.

While the economic challenges and industry headwinds, such as the stalling of international visitor numbers at below pre-Covid levels, were acknowledged, there was a strong sense of optimism.

Most speakers pointed to the opportunities present in the New Zealand market, and the dominant theme of the conference was development and investment.

Emerging trends were identified, but issues facing the industry were also raised. Here’s The Post’s three key takeaways from the event …

The supply pipeline is busy, but easing

Christchurch Mayor Phil Mauger’s announcement that his city would be getting a new five star hotel was the big news of the conference. The $150 million redevelopment of the iconic Noah’s Hotel will operate under the Sheraton brand, and will add 240 rooms to the market.

Conference delegates greeted the news with enthusiasm. Christchurch NZ general manager Loren Aberhart said the city was challenged by a shortage of hotel rooms, and the Sheraton hotel would help.

Accor Pacific chief operating officer Adrian Williams said the development would be great for the city, especially as it would transform a building that had been sitting vacant for many years.

“Overall, there is a hunger to keep hotel supply nationwide growing with new projects. The industry has a lot of appetite for it.”

A wave of new hotel supply has hit the market, or been announced over recent years, but the majority of it has been in Auckland and Queenstown.

While some of the supercity’s new hotels, including the Radisson Red and DoubleTree by Hilton, are still under construction, it has no further new developments on the cards.

Queenstown has several significant projects underway. These include the $130 million Noctic luxury hotel development in front of the Kamana Lakehouse, and EVT’s expansion of its QT hotel to a 280-room offering by repurposing the old Rydges Hotel next door.

JLL Hotels & Hospitality Group’s Nick Thompson, who convened several panels, noted the new supply wave was nearing the end.

“There is likely to be a greater focus placed on existing stock through refurbishment, upgrades and rebranding, as well as increased conversion activity,” he said.

But the AHICE developer panels revealed developers saw opportunities for new and repurposed hotels, particularly in Christchurch and Queenstown. That included some regional areas.

Pienaar Piso, who is developing the Pullman Hamilton, said every New Zealand city had something unique to offer, and the regions were not a deathtrap, while EVT’s Callum Kennedy said Rotorua had plenty of tired stock which meant lots of opportunities.

Hotels are more than just a room

There are several key trends impacting on New Zealand’s hotel market, and industry leaders highlighted them over the course of the conference.

They include the rise in lifestyle and boutique brands, increased focus on food and beverage options in hotels, and use of design which reflects the local environment, or neighbourhood.

IHG Australasia's managing director, Matt Tripolone, told The Post the consumers’ interest in brands has changed and, while there is still strong demand for the core brands, the demand for a lifestyle element has never been so strong.

“What we are seeing globally is that guests want a more unique stay now. They want to wake up in a hotel and know where they are and what city they are in, rather than feeling like they could be anywhere.

“It is not just about the Instagram moment that we've been talking about for years. It is about creating a unique experience that guests can touch, feel, and remember. It is about the experience.”

Jonathan Bowmaker, the Hilton’s senior manager of food and beverage operations in Australasia, said “a room is a room - it is the food and beverage offerings that create an experience”.

He said successful hotels created food and beverage offerings as a destination within a destination, while Langholm Hospitality director Alison Hulm said there were many different parts to hotels but it was the food and beverage offerings that pulled on guests’ heartstrings and made them feel.

Another trending development is advances in technology, including AI. AHICE featured several sessions on how it could be effectively integrated into a hotel’s services to improve productivity and revenue, and customer experience.

Bowmaker said AI was a useful tool for back of house functions and analysis, but Covid had given people the desire for human connection which added value to the hotel experience, and AI could not replace that.

Better times are ahead, but more support is needed

While the Government’s commitment to growing tourism was welcomed, many speakers made calls for more support on issues, such as funding and events, from central and local governments.

Simon White, EVT’s general manager of hotel operations in New Zealand, said people needed to keep lobbying around such things as levies and bed tax proposals.

Hotel Council Aoteaora strategic director James Doolan called for a national register of all short-term rental properties, which he said had the backing of the entire accommodation sector.

“This isn’t about banning short-term rentals, it’s about fairness, transparency and better data to help council decision-making around tourism and events.”

Radisson Hotel’s Australasian managing director, Lachlan Hoswell, said the Government needed to look at what other governments were doing, and start backing more events.

The need for more events, particularly in Auckland, was raised by many speakers. Accor’s Adrian Williams said events drove demand, and pointed to Melbourne as an example.

Melbourne, like Auckland, had a big increase in new hotel rooms, but in Auckland demand was soft whereas in Melbourne it was hitting all-time records, and that was due to a strong events calendar, he said.

But despite the niggling woes and the economic climate, hoteliers, developers and investors all believed green shoots were starting to emerge, and expressed confidence in the industry’s future.

Tripolone said the last few years had been tough, particularly in the North Island, but he was optimistic things had turned a corner, and New Zealand’s tourism sector would grow to be stronger than pre-Covid.

Luxury Escapes general manager Paul Gorman said there was some North and South Island differentiation, but one of his company’s recent campaigns delivered their best results in 10 years.

“We need to get the airlines on board to deliver more routes and better fares because people are becoming more interested in travelling to New Zealand. It is a safe haven compared to other parts of the world.”