NZ Hotel Industry Could Take Off

NZ Hotel Industry Could Take Off With Discount Airlines

If the Australian experience is anything to go by, New Zealand should welcome domestic air-flight competition with ¡¥open arms¡¦, according to Mike Batchelor, Vice President of Jones Lang LaSalle Hotels.

Jones Lang LaSalle Hotels is part of the Jones Lang LaSalle group, the world¡¦s leading real estate services and investment management firm, operating across more than 100 key markets on five continents.

The company provides comprehensive integrated expertise, including management services, transaction services and investment management services on a local, regional and global level to owners, occupiers and investors.

Based in Australia, Mr Batchelor is currently in New Zealand talking to key staff and clients about the Asia-Pacific region¡¦s hotel markets, trends and investment/business opportunities in the tourism sector.

Mr Batchelor believes there are potential parallels between what the Australian domestic tourism industry has experienced since the take-off of discount airlines, Virgin Blue and Impulse, and what New Zealand may soon experience.

¡§The significantly lower prices these airlines have introduced have opened the option of domestic air travel to a much bigger market,¡¨ said Mr Batchelor.

The growth in the number of domestic passengers processed since the introduction of discount domestic flights on routes around the eastern seaports of Australia last year are impressive.

¡§Results for the 8 months since the introduction of Virgin and Impulse airlines show domestic passenger throughput has increased by 11.8% in Melbourne, 7.5% in Sydney airports and 18.7% in Brisbane,¡¨ said Mr Batchelor.

The Brisbane result is particularly impressive with January 2001 recording a staggering 44.0% increase on January 2000, while for the same period Melbourne and Sydney had growth of 25.2% and 17% respectively.

¡§The increase in domestic travel has translated into significant growth in room night demand (RND) in hotels in areas where the discounted carriers are now operating,¡¨ says Mr Batchelor.

In Melbourne City, RND increased by 5% in the third quarter of last year and 4.1% in the fourth quarter. Brisbane City figures for the same periods were up 3.9% and 5.8% respectively. Sydney had the most dramatic increase with 14.4% and 11.4% respectively.

The figures look particularly favourable when compared to national RND growth rates of only 0.5% for the third quarter and 1.2% for the fourth quarter.

¡§There¡¦s no doubt Sydney¡¦s bloated figures were helped by the Olympic Games, but I think the correlation between the start up of the discount airlines and the increases in RND in regions where they are operating is fairly clear,¡¨ says Mr Batchelor.

As well as the increase in numbers, the extra money people have in their pockets when they reach their destination is impacting on the tourism.

¡§Operators in Brisbane, for example, have noted a trend whereby visitors take advantage of the discount flight to Brisbane, fly in, hire a car and, using Brisbane as a base, explore south east Queensland¡¦s hinterland and Gold and Sunshine Coasts,¡¨ said Mr Batchelor.

Discounted flights to New Zealand, similar to those presently being offered between Hamilton and Coolangatta by Freedom Air, from Australia¡¦s main population centers of Sydney, Melbourne and Brisbane by an additional carrier would provide a huge shot in the arm to all facets of the New Zealand Tourism Industry.

Equally, the major domestic markets in both the North and South Island would see an increase in demand from people who simply did not travel to these destinations due to the high costs involved.

Ends

„h RND statistics from The Australian Bureau of Statistics Survey of Tourist Accommodation

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