Rotorua’s hotel market was the standout performer in the second quarter of the year, according to the latest industry analysis by the Colliers Hotels team.
In the month of May, revenue per available room (RevPAR) rose 31 per cent for the month compared to last year, which contributed to a 15 per cent uplift for the quarter overall.
This boost in activity was driven by the country’s biggest tourism trade event, TRENZ, that was held in Rotorua in May. The conference was attended by approximately 1,200 operators, travel buyers, and leaders from across the tourism sector.
Further analysis in the New Zealand Hotel Market Snapshot for Q2 that was produced by Colliers noted Queenstown closed the quarter with a RevPAR figure that was 8 per cent ahead of the previous year, although softer domestic demand in June marked a rare down month.
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Derrek Anderson, Director of Hotel Brokerage and Advisory at Colliers, says some national trends continued to play out in the second quarter of the year that were evident in Q1.
“While Rotorua and Queenstown performed strongly and Christchurch finished in line with last year’s figures, Wellington and Auckland face challenges but for different reasons,” Anderson says.
“A downturn in government spending is impacting Wellington, while Auckland has an oversupply of hotel rooms with the Hotel Indigo opening fully in April and adding 225 rooms to the market. As a result, Auckland RevPAR dropped nearly 7 per cent for the quarter compared to last year.
“If we cast our eyes forward, it will likely take several years for the demand to catch-up to the supply in Auckland.
"A general rebound in tourism and growth in the events sector, driven by the impending opening of the New Zealand International Convention Centre, will be crucial for this market.”
International visitor arrivals to New Zealand for the year ending in May grew 5.2 per cent compared to the same period last year but this only reached 86 per cent of 2019 levels.
Industry estimates suggest a full return to pre-pandemic visitor numbers by March 2027.
“Looking at international tourists, India and the US represented good growth markets but the number of Chinese travellers remains well below 2019 levels and this is an important sector that we hope to see rebound as the tourism recovery continues,” Anderson says.
“Australia remains New Zealand’s largest market and the visitor numbers from across the Tasman are edging back towards 2019 levels.”
Looking at hotel transactions, the prospect of further cuts to the Official Cash Rate before the end of the year would likely support hotel valuation growth and encourage investment.
- Supplied by Colliers
