Tourism boom lifts hotel market
Tourism boom lifts hotel market
23 April 2014— An emerging tourism boom is helping the New Zealand hotel sector recover from five years of modest growth, with a resurgence of demand stimulating increases in occupancy and room rates.
International visitor numbers increased 7% in New Zealand to 2.75 million for the year ending January 2014, well above the long term average of 3%. Chinese travelers increased 25% in the same period, to more than 240,200, according to Colliers International’s latest Hotel Research and Forecast Report.
Revenue per available room (RevPAR) in 2013 for the major markets of Auckland and Wellington showed strong annual growth, increasing 7% and 4%, respectively. The solid performance of 2013 is expected to continue in 2014 on the back of improving business confidence and strengthening economic growth – all good news for the New Zealand hotel property market.
With strong demand meeting up with a weak supply pipeline, new hotel development activity is emerging in Auckland, Wellington and Christchurch. The activity is expected to pick up further in Auckland in 2014 with property investors moving into the market, looking to convert inefficient commercial office space or under-performing assets to hotel developments to meet surging demand.
Colliers national director of hotels, Dean Humphries, says the New Zealand tourism market has caught the eye of international visitors and their numbers are surging.
“I think this is in part a consequence of the wider ‘New Zealand Inc.’ story being heard around the world. Awareness is building about New Zealand from accomplishments such as the Hobbit Trilogy and singing sensation Lorde. We are also receiving a boost from the surge in global demand for our dairy products, the $30 billion Christchurch rebuild, the Auckland residential housing boom and improvement in economic conditions. Business confidence is the strongest in 20 years and economic growth is predicted to be 3%-4% this year, at the top end of all OECD countries.”
Humphries expects both Auckland and Christchurch will benefit strongly from the booming demand with new developments in the works.
“In Auckland, the 5-star sector is going to be transformed, with the new 130 room Sofitel So Hotel opening in early 2015 and the proposed 200 room waterfront hotel and 266 room Ritz Carlton Hotel both in their early stages of design/feasibility.”
“We are also seeing increasing interest in Christchurch as the city starts its rebuild programme with a number of investors and operators reviewing opportunities.”
“After an 18 month period of reduced transactional activity, we are now also seeing a significant increase in enquiry in our key hotel markets” and this will lead to increased activity in the sector” he says.
• Colliers International delivers real estate services globally through 12,300 specialised professionals in over 522 offices in 62 countries.
• Globally, we provide advice for our clients on over $86 billion in transactions annually and manage in excess of 92 million square metres with revenue reaching US$2 billion.
• Colliers International has 13 offices around New Zealand and provides sales, leasing, valuation, real estate management, project and building consultancy, tenant representation, research and consulting services.
• In 2012, Colliers International completed over $1.7 billion worth of commercial property sales transactions and leased over one million square metres of commercial property in New Zealand.
• In April 2013, The Royal Institution of Chartered Surveyors (RICS) once again named Colliers International as New Zealand’s top commercial, industrial and retail sales agency, with Colliers International winning all three sales awards at the annual RICS NZ Awards for the third year in a row.
• RICS also awarded the Property Management Team of the Year award to Colliers International in 2013.
• Colliers International New Zealand won the ‘World’s Best’ award for Property Consultancy Marketing at the 2012-2013 International Property Awards, beating competition from around the globe.