New Zealand Hotel Dynamics - Q1 2014

Strong occupancies push majority of markets to RevPAR peaks

MARKET HIGHLIGHTS

Relatively low supply increases combined with an improving economy and increased visitor arrivals have pushed hotel occupancies to peak levels across most New Zealand markets putting pressure on rates and driving strong National RevPAR levels.

National occupancy levels have improved since the bottom of the cycle driven by increasing demand and limited new supply. 12 month Occupancy was up 2.3 percentage points on March 2013 levels to 73.2% but remain below peak levels of 76.7% achieved in 2004.

As at March 2014, New Zealand wide ADR was $141.27, surpassing the previous peak of $138.42 achieved in the 12 months to December 2008 (excluding the RWC 2011 period). RevPAR was $103.48, up 6.2% on the previous 12 months also above the previous peak.

International visitor arrivals increased by 5.4% in the year to March 2014 with significant increases coming from Japan (+14.5%), China (+14%) and USA (+10.4%). Behind Australia, China and USA have become next most significant source markets with UK slipping into fourth spot.

Despite the strong growth in international visitors, some 60% of all commercial accommodation demand across New Zealand is sourced from the domestic market. This ratio has been relatively consistent over recent times indicating that there has been strong growth in domestic demand also.

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CONTACT

Peter Hamilton
Director - CBRE Hotels, New Zealand
O: +64 9 359 5419
M: +64 21 920 877
E: peter.hamilton@cbrehotels.com