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2011 a year of change for Rotorua hotels

2011 a year of change for Rotorua hotels
A major international sporting event, natural disasters and changes in the way people book travel all had an impact on Rotorua hotels in 2011.

Speaking at NZ Hotel Council’s 2011 Annual Operating Survey presentation in Rotorua today, 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 Rotorua’s 9 NZHC members:
• had a 64.6% occupancy rate, down 1.4 points compared to 2010 (66%) and the 4th highest annual rate of all NZHC members
• had an average room rate (ARR) of $109.20, up $3.80 on 2010 ($105.40)
• generated over $47.5m in revenue, up $9m on 2010 from a total of 1,369 rooms
• employed over 600 people and contributed $39m to the region through wages and salaries, food and beverage purchases, rates and other expenditure, up from $29m in 2010. Wages and salaries, and local council rates made up almost $18m and $1.1m 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 Rotorua results, with strong market driven room rates achieved during the key RWC game days in the region. These rates helped increase the average room rate for Rotorua 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 in the region, hotels were very quiet mid-week as traditional corporate and conference business was practically non-existent during that time, she said.

Fraser McKenzie, NZHC Rotorua Regional Chair and GM Novotel Lakeside Hotel, said, ”Moving the school holidays into October to align with RWC also had significant impact on such a strong domestic leisure destination, with the entire family focusing on the World Cup, and pushing their travel into December rather than October. While the three RWC matches in Rotorua provided a welcome increase in business on game days, traditional spring group series business was noticeably down compared to previous years. Conversely and in contradiction to what we know about major event business patterns, August and November (just prior & following RWC) proved to be comparatively strong months in Rotorua”.

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 eight days prior to arrival. Rotorua sat well below the national average on 36%; however this represented an upward shift of 6 points from 30% in 2010.

“Over a third of Rotorua hotel business is generated from inbound groups, the highest in the country,” Mr McKenzie said. “This tends to lengthen the average booking lead time somewhat; however we have noticed lead times on conferencing and free independent travel bookings trending shorter.”

Ms Shadbolt said, “This data just proves what hoteliers have been saying for the last couple of years, 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.”


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).

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