Events keeps Wellington hoteliers on their toes

A year of unprecedented events keeps Wellington hoteliers on their toes
A major international sporting event, natural disasters and changes in the way people book travel all had an impact on Wellington hotels in 2011.

Speaking at NZ Hotel Council’s 2011 Annual Operating Survey presentation in Wellington this afternoon, NZHC Executive Officer Rachael Shadbolt said 2011 was an unusual year. Any one of the events 2011 presented to the sector would have had a marked impact, but to have a Rugby World Cup, a series of earthquakes and a significant shift in the way people booked travel take place in the one year was unprecedented.

In 2011 Wellington’s 23 NZHC members:
• had a 73.6% occupancy rate, up 4.1 points compared to 2010 (69.5%) and the second highest annual rate of all NZHC members after Auckland.
• achieved the third highest average room rate (ARR) of the eight NZHC regions at $150.10, up $11.20 on 2010 ($138.90).
• generated over $169m in revenue, up $27m on 2010 from a total of 2,906 rooms.
• employed over 1,600 people and contributed $108m to the region through wages and salaries, food and beverage purchases, rates and other expenditure, up from $91m in 2010. Wages and salaries, and local council rates made up $52.7m and $3.4m respectively of this total.

NB: this commentary excludes the Christchurch results. As a result of the earthquakes the city’s hotel room inventory dropped from 3717 pre February 2011 to 853 rooms after the earthquake. Hotels that are currently operating have significantly increased occupancy and average room rates outside the normal range and for this reason have not been included in this summary.

Ms Shadbolt said the Rugby World Cup had an impact on the Wellington results, with strong market driven room rates achieved during the key RWC game days. These rates helped increase the average room rate for Wellington in 2011.

“The RWC period brought some challenges for hotels, with significant displacement of traditional September and October business being pushed out to either side of the event. This meant that while good rates were achieved during RWC game days hotels were very quiet mid-week as traditional corporate and conference business was practically non-existent during that time,” she said.

Olivier Lacoua, NZHC Wellington Regional Chair and GM Comfort and Quality Hotels, said, “Wellington hotels enjoyed very strong corporate, conference and event business in August and November. Moving World of Wearable Art to August just prior to the RWC and the 500 delegate American Travel Writers conference in November ensured good pre and post RWC business,” he said.

Nationwide, the 2011 annual survey highlighted the significant shift in booking patterns, with more visitors choosing to book at the last minute. This was represented by a 9 point shift to 42% of all NZHC hotel room bookings being booked less than 8 days prior to arrival. Wellington sat well above the national average on 49%.

Ms Shadbolt said that, “This data just proves what hoteliers have been saying for the last couple of years. Lead times on corporate and free independent traveller bookings are getting shorter and shorter, particularly as people seek out good deals online. There is also a shift toward far shorter lead times for conference bookings which often involve large numbers of rooms, conference facilities and food and beverage. Some bookings are now coming in 2-3 weeks prior to arrival which is a big shift compared to the traditional 2-3 month lead time.”
-ENDS-

Other highlights from the NZHC Annual Hotel Operating Survey 2011:
• NZHC members directly employed almost 11,000 permanent and casual staff.
• Christchurch achieved the highest annual occupancy of 85%, however this was off a reduced inventory base of 853 rooms compared to 3717 rooms before the February 2011 earthquake.
• Excluding Christchurch, Auckland achieved the highest annual occupancy rate of 77.1%, followed by Wellington (73.6%) and Rotorua (64.6%).
• The Central Park region (Taupo, Tongariro, Napier and Gisborne) had the highest average room rate of $160.10, followed by Auckland ($157.60) and Wellington ($150.10).
• The average room rate for 5-star hotels was $217.50, up $39.33 compared to 2010 ($178.70).
• The average room rate for 4.5 star was $148.00, up $15.90 compared to 2010 ($132.10).
• The largest individual source of business was FIT/leisure travellers – 40% of all rooms sold, down 3 points compared to 2010, followed by corporate (23%) and tours & groups (18%).
• The largest consumers of hotel accommodation in 2011 were New Zealanders (54% of all rooms sold), followed by Australians (16%).
• On average, 42% of bookings were short-term (made up to seven days prior to arrival), 33% were medium-term (8-30 days prior to arrival) and 25% were long-term (more than 30 days prior to arrival).

About the New Zealand Hotel Council
• Represents the interests of New Zealand’s international chain, large independent and privately owned hotels around the country.
• Over 118* members, largely in eight tourism centres (Auckland, Rotorua, Central Park, Wellington, Blenheim/Marlborough, Christchurch, Dunedin and Queenstown), account for around 80% of total hotel capacity and close to 100% of ‘large hotel’ inventory.
• Collectively, NZHC members operate over 16,446* hotel rooms, control assets with a capital value in excess of NZ$2.9 billion, generate annual revenue of over NZ$909 million, and employ over 10,500 full and part time staff.
• NZHC runs an Annual Operating Survey across its members each year. The data collected is reported back to each region in a presentation to NZHC members, tourism partners, local government and regional stakeholders.

*NZHC Christchurch member hotels that are closed due to earthquake damage have been excluded from the 2011 Annual Operating Survey analysis.

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