New Zealand Hotel Dynamics - Q3 2015

New Zealand-wide performance growth continues

MARKET HIGHLIGHTS

The good news continues for the New Zealand hotel market with all indicators pointing to strong growth across the sector. Media outlets have described a ‘Tourism Boom’ with the likelihood that Tourism will overtake Dairy as New Zealand’s biggest export earner this year.

The latest figures from Statistics New Zealand show 3.02 million international visitors arrived in New Zealand for the 12 months to August, an increase of 7.8% on the previous year. This is the highest growth rate in visitor arrivals since 2005.

With the New Zealand dollar retreating from its recent high levels, experts are predicting the growth in international visitor arrivals will continue. In saying this however, New Zealand has a high reliance on local demand with approximately 55% of all guest nights sourced domestically.

The latest Tourism forecasts prepared by the Ministry of Business, Innovation and Employment suggest international visitor arrivals are expected to grow by an average of 4% per year till 2021, with Chinese visitors forecast to grow by 12% per year.

National occupancy levels have continued to improve driven by the growth in international arrivals together with continued growth of domestic travel. Occupancy for the 12 months to September was up 3.6 percentage points on 2014 levels reaching a new peak of 78.0%.

As at September 2015, New Zealand wide ADR was $152.50, an increase of 6.9% on the previous year. RevPAR was $118.96, up 12.1% on the same period in 2014.

Chart 2 compares the RevPAR levels of the hotel key markets over the past five years. As seen, all markets have shown steady growth since 2013 with Auckland increasing its lead over the other centres.

Christchurch’s RevPAR decreased during most of 2014 as new hotels opened but have since show signs of recovery.

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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