Hotels enjoy strong January activity

Hotels enjoy strong January activity

Fantastic summer weather has helped New Zealand’s hotel sector record strong results for January, the Tourism Industry Association New Zealand (TIA) says.

New statistics from TIA show that total national occupancy for TIA’s hotel sector members in January was 71.8%, one of the highest rates recorded in the last five years.

TIA Chief Executive Martin Snedden says the great weather encouraged people to extend their holidays and resulted in higher domestic visitation across many of TIA’s eight hotel regions.

“Holiday regions like Queenstown and Central Park (Taupo, Ruapehu, Napier and Gisborne) enjoyed good summer holiday business with visitors arriving earlier than normal, almost immediately after Christmas. This business continued well into the new year,” Mr Snedden says.

As a result, corporate business picked up a little later in January than usual, although some regions have already enjoyed good conference and event business.

The hotel figures reflect feedback TIA is receiving from across the tourism industry, Mr Snedden says.

Nationally, hotel average room rates were on a par with January 2012 at $135 but showed significant strengthening on January 2011’s $127.

Despite the good January results, hoteliers say that increased operating costs are impacting significantly on profits.

Accor Hospitality Vice President New Zealand and Fiji Garth Simmons says hotels are being forced to absorb cost increases as they don’t feel able to pass on the costs to guests.

“Coupled with ever increasing expectations from guests about rate inclusions, especially internet and wifi, this continues to make for challenging trading conditions,” Mr Simmons says.

New Zealand total
Jan 2013 Jan 2012 Jan 2011
Occupancy 71.8% 69% 71.8%
Average Daily Rate (ADR) $135 $134 $127

Auckland region
A sunny January in Auckland saw occupancy climb to 74.8%, the highest in five years. Hotels across the spectrum recorded increases, with 4.5 star properties showing a 6.2 point increase to 77.4% for the month.

With no significant events to drive demand and much of the country on holiday until mid-January, domestic visitor guest nights were down 5.4 points to 48%, but Australia grew 3 points to 15.1% and China was up 1.5 points to 10.4%.

Jan 2013 Jan 2012 Jan 2011
Occupancy 74.8% 70.9% 74.1%
Average Daily Rate (ADR) $131.37 $129.94 $129.00

Rotorua region
Rotorua occupancy was down 1.4 points to 71.8% compared to January 2012. This can in part be attributed to the Chinese New Year moving to February this year, while it fell in January 2012. The Ragamuffin music festival also moved to February after being held in January 2012.

Tour market guest nights dropped 5 points to 39% compared with January 2012, but the Free Independent Traveller (FIT) sector increased 9 points to 50%. The US, China and UK visitor markets each showed increases.

Jan 2013 Jan 2012 Jan 2011
Occupancy 71.8% 73.2% 74.4%
Average Daily Rate (ADR) $103.43 $106.92 $104.75

Wellington region
January results were absolutely positive for Wellington with occupancy at a five year high at 64.9%. Fantastic summer weather and Positively Wellington Tourism’s ‘Kids Stay Free’ campaign both helped lift visitor numbers. The capital also hosted the 1000 delegate International Conference on Thinking in late January which equated to 5000 guest nights.

It took longer than usual for government and corporate business to pick up after the holiday season, dropping 5 points to 18% for the month. However, the Free Independent Traveller (FIT) sector was up 3 points to 59%.

Jan 2013 Jan 2012 Jan 2011
Occupancy 64.9% 59.7% 59.7%
Average Daily Rate (ADR) $128.95 $127.22 $122.79

Christchurch region
Christchurch hotels recorded a small decrease in occupancy in January but this is likely to be due to increased room capacity following hotels reopening since January 2012.

US visitor numbers were up 5 points by share of guest nights, making this the second largest group of visitors behind the domestic market. This can be attributed to the return of leisure travellers from this market, possibly displacing some of the New Zealand and Australian visitors who book later and may have missed out due to lack of availability.

Local hoteliers also report that earthquake reconstruction personnel are reducing their reliance on hotel rooms by moving into long term accommodation. This has opened up space for more international visitors.

Jan 2013 Jan 2012 Jan 2011 (pre EQ)
Occupancy 84.5% 85.2% 80.1%
Average Daily Rate (ADR) $155.99 $147.45 $118.36

Queenstown region
Good weather and increased flight capacity into Queenstown boosted the region’s January results. A significant 11 point increase to 66% in the Free Independent Traveller (FIT) sector room nights offset decreases in the tour, and conference and incentive markets.

Australian room nights were up 3.2 points to 22.1% and the US market also performed well, up 4.2 points to 9.9%.

Jan 2013 Jan 2012 Jan 2011
Occupancy 75.2% 70.8% 73.8%
Average Daily Rate (ADR) $150.42 $153.25 $148.44

Dunedin region
Strong domestic visitor numbers produced good results for Dunedin with January occupancy at 59%. New Zealand guest nights were up 18.2 points to 56.6%, most likely driven by the Nitro Circus event at Forsyth Barr Stadium in late January.
Jan 2013 Jan 2012 Jan 2011
Occupancy 59% 57.1% 57.5%
Average Daily Rate (ADR) $115.93 $116.60 $114.88

Central Park region (Taupo, Ruapehu, Napier and Gisborne)
Strong Christmas-New Year business continued until the end of January across the Central Park region. Local events helped attract business with great weather in the latter part of the month encouraging domestic holidaymakers to extend their stays or make last minute decisions to travel.

Jan 2013 Jan 2012 Jan 2011
Occupancy 60.1% 60.7% 60.5%
Average Daily Rate (ADR) $168.19 $168.62 $160.90

Nelson/Marlborough region
Although the Nelson/Marlborough region is a traditional summer holiday spot, hotel occupancy was down 6.9 points to 66.1%. Indications are that the lovely weather lured holidaymakers to the region’s holiday parks at the expense of hotels.

However, the average daily room rate was up a healthy $11.15 to $156.40, a five year high.

Jan 2013 Jan 2012 Jan 2011
Occupancy 66.1% 73% 70.5%
Average Daily Rate (ADR) $156.40 $145.25 $148.69

TIA Hotel Sector
TIA’s hotel sector represents the interests of over 130 members throughout New Zealand, including international chain, large independent and privately owned hotels. TIA hotel sector members employ 11,000 staff nationally, with annual revenues of more than $866 million.

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