Christchurch hotel boom: New openings boost capacity amid economic slowdown
Monday, 22 July 2024
Hotel capacity in Christchurch is steadily ramping up despite quiet economic conditions, with hoteliers confident more guests will come to fill their beds.
Three new hotels have opened in recent months, while three others that will boost capacity by more than 530 rooms are in the pipeline, with more planned.
Canterbury now has about 4000 hotel rooms, including 2600 in 27 central city three-to-five star hotels. Two-thirds of those rooms are part of a branded chain.
At the same time, hotels nationwide are battling reduced consumer and corporate spending, along with the usual winter slowdown.
Despite this, demand for guest accommodation has passed pre-Covid levels and the city is “certainly not saturated” with beds, said Nikki Rogers, Central South Island manager for Hospitality New Zealand.
The city’s hotel occupancy came close to 90% earlier this year, which Rogers described as very high.
“There was a thought with these properties would there be too many, and would they be coming into a saturated market.
“But the openings have been quite gradual, and demand has been growing gradually in line with that. You absolutely notice when something is on at (convention centre) Te Pae or some big event is happening.
“A lot of people come to Christchurch. When all the hotels are booked, it also helps the motor lodges and motels and so on.
“Once we’ve got all those anchor projects open, like Te Kaha (One New Zealand stadium) and Parakiore (pool), there will be a lot more visitors.”
In March, visitor guest nights in Canterbury commercial accommodation reached a post-pandemic high, with 413,000 stays for the month. Of these, 155,000 were in hotels.
The city lost two-thirds of its guest accommodation in the 2010-11 earthquakes.
Bruce Garrett, managing director of Brooke Serene Hotel Management, said while both private and corporate travellers are belt tightening, bookings for spring and summer look positive.
“What we are seeing is a return to pre-Covid patterns, with busier summer and quieter winters, and a bump for big events.”
He said while Auckland added 900 hotel rooms in six months, Christchurch’s development has been “nicely staggered”.
Christchurch’s newest hotels are Quest on Kilmore, which opened this week, and Drifter, which opened at the end of June.
Quest on Kilmore, opposite the Christchurch Town Hall, has 42 apartment-style rooms. It is the hotel group’s fourth in central Christchurch, following the November opening of the 84-room Quest on Cambridge.
Quest Apartment Hotels NZ chief operating officer Adrian Turner said the latest opening would “provide much needed inventory for the Christchurch market, especially since the opening of Te Pae”.
“We are already seeing many advance bookings from both our existing corporate clients as well as our new clients.”
Drifter is an Australian hotel-hostel hybrid brand, which opened last month in a heritage building in Lichfield St.
It can accommodate 372 guests in 95 rooms ranging from individual suites to bunkrooms. The concept includes communal areas such as social lounges, kitchen, and cinema, with a bar and restaurant opening next month.
Meanwhile, on the corner of Manchester and Cashel streets, NZ Hotel Holdings, owned partly by the New Zealand Super Fund, is preparing to build a new hotel next to its existing BreakFree Christchurch.
The consented 13-level hotel will have a double height lobby with about 120 guest rooms, a ground floor restaurant, and a rooftop bar. It is due to be finished late next year or early 2026.
Awaiting resource consent is the new 200-room hotel Citadel Properties Ltd plans to build on the old Harley Chambers site.
The 11-storey hotel has been designed with art deco and Chicago style influences, with a restaurant, gym and reception area.
On Oxford Tce, the 1970s hotel that was orginally Noahs, and later Rydges, is being sold and will be redeveloped as a $80 million to $100m joint venture between Auckland’s Russell Property Group and Canterbury’s Mainland Capital.
The new hotel is due to open in late 2026, with a brand deal yet to be done.
On the Cathedral Square hotel development site next to Te Pae, owner the Carter Group completed core sample drilling this month. Consent has not yet been sought, and the company has not yet indicated when construction might start.
About four hotels next to Te Pae are planned long term.
Other hotel developers are biding their time, waiting for demand and room rates to increase sufficiently to make construction financially viable.
The old Press site in Cathedral Square and adjoining Gloucester St land are owned by HIS Group. Its hotel brands include the Hilton, Marriott and IHG hotels.
New Zealand hotel group Sarin, which runs the Observatory Hotel in the Arts Centre, owns a Gloucester St site next to Cathedral Junction earmarked for eventual hotel development.
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