Auckland hotels coped better than expected

Auckland hotels coped better than expected over the last 12 months

Press Release by New Zealand Hotel Council on Tuesday 9 March 2010

Auckland hotels have come through a difficult and challenging year and are well placed to improve performance in a changing operating environment.

Speaking at the 2009 Annual Operating Survey* presentation in Auckland today, New Zealand Hotel Council’s (NZHC) Independent Chair Jennie Langley said hotels throughout the country were challenged by fewer international arrivals and increasing numbers of visitors booking at the last minute. They also had to cope with the outbreak of Swine Flu and subsequent cancellations of core group and tour business.

In 2009 Auckland hotels:
• achieved the highest annual occupancy rate of all NZHC members of 69.7%
• were third out of the eight regions for average room rate at $133.40
• average room rate equated to a 8.8% reduction on 2008, compared to a national average drop of 5.7%

The 2009 survey highlighted the importance of domestic and Australian visitors who buffered the industry from the significant reduction in some key long haul markets. New Zealanders accounted for 49.5% of all rooms sold in Auckland last year, followed by Australians at 16.1%.

Ms Langley said Auckland hotels were largely dependent on independent and leisure travellers, followed by corporate guests then tours and groups.

“Overall this is a useful ‘portfolio’ in that there is no one visitor segment that dominates and exposes this region in a downturn. However, there’s no doubt that the reduction in the Conference & Incentives market and less face-to-face business compared to previous years, impacted on performance.”

Auckland’s 31 NZHC members generated $323 million in revenue in 2009 from a total of nearly 6200 rooms and employed 3440 people. Members contributed $225m to the region through wages & salaries, food & beverage purchases, rates and other expenditure.

“In spite of CPI and minimum wage increases in 2009, hotels managed to contain, or in some cases slightly reduce, operating costs. This effort, combined with a reorientation of marketing initiatives and an ongoing commitment to deliver quality product and service to meet ever-increasing visitor expectations, means hotels are well positioned to improve performance as the market picks up.”

“For Auckland members this is essential because with the RWC2011 firmly in their sights and the knowledge of increased competition from new hotels and other commercial accommodation coming in to the market, the next couple of years will have their share of challenges.”

Other highlights from the NZHC Annual Operating Survey 2009:
• NZHC members directly employed over 9500 permanent and casual staff in 2009
• Auckland achieved the highest annual occupancy rate of 69.7%, followed by Wellington (69.4%) and Christchurch (68.3%)
• Wellington had the highest average room rate of $142.90, followed by Central Park ($140.50) and Auckland ($133.40)
• The average room rate for 5-star hotels was $177.70, 4-star was $117.70 and 3-star was $87.70
• The largest individual source of business was FIT/leisure travellers (44.6% of all rooms sold), followed by corporate (20.2%) and tour groups (17.1%)
• The largest consumers of hotel accommodation in 2009 were New Zealanders (51.1% of all rooms sold), followed by Australians (18.6%)
• On average, 34% of bookings were short-term (made up to seven days prior to arrival), 36% were medium-term (8-30 days prior to arrival) and 30% were long-term (more than 30 days prior to arrival)
• NZHC members employed 0.56 staff per available room in 2009, 5 star hotels had the highest at 0.93, more than twice the number of staff per available room in 3 and 3.5 star establishments

ENDS