Slow progress reopening Christchurch hotels

27 March 2012

Slow progress reopening Christchurch hotels

Over a year on from the February 2011 earthquakes and hotels within the Christchurch CBD remain closed with progress to reopen slower than first anticipated.

Speaking at NZ Hotel Council’s 2011 Annual Operating Survey presentation in Christchurch this afternoon, NZHC Executive Officer Rachael Shadbolt said 2011 was an unusual year for all NZHC regions but none more so than Christchurch. The devastating February earthquake and the subsequent severe aftershocks in June and December, as well as delays from insurers and local authorities, have made it very difficult for hotels to set dates to reopen.

For the rest of the country any one of the events 2011 presented to the sector would have had a marked impact. But to have a Rugby World Cup and a significant shift in the way people booked travel as well as the earthquakes – that had the ripple effect of displacing tourism business throughout the country, particularly in the South Island – was unprecedented.

In 2011 Christchurch’s eight (currently operational) NZHC members had an 85% occupancy rate and an average room rate of $136.10.

Bruce Garrett, Christchurch NZHC Regional Chair and GM of The George, said “As a result of the earthquakes the city’s hotel room inventory dropped from 3717 pre-February 2011 to 853 rooms after the earthquake. Most hotels that are currently operating have significantly increased occupancy and average room rates outside the normal occupancy levels of the mid 60% range. Hotels that are currently operational are very busy but look forward to other properties reopening in the future. This would help free up some much needed accommodation to entice tourism visitors back into the region”.

Looking at the results for the whole country Ms Shadbolt said the Rugby World Cup had an impact on the 2011 Survey results, with strong market driven room rates achieved during the key RWC game days. These rates and the increased Christchurch room rates increased the average room rate for NZHC member hotels nationally to $146.30, up from $129.00 in 2010.

“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.

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 made less than eight days prior to arrival.

“Due to the very different operating conditions this was not the case for Christchurch,” said Mr Garrett. “Given the high demand for accommodation, fewer people are leaving their bookings to the last minute. No doubt as things slowly return to normal booking patterns may align more with Auckland and Wellington with both sitting well above the national average on 49%.

“However this is certainly a long way off and our focus for the next couple of years is on re-establishing the hotel stock in the city, proactively encouraging visitors to return and working closely with council to ensure the Convention Centre is rebuilt as soon as possible. That facility is a significant provider of business to hotels, particularly in the winter months and it is vital it is rebuilt quickly. There’s no point reopening hotels if there’s no-one there to fill them.”

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 with 2010 ($178.70)
• The average room rate for 4.5 star was $148.00, up $15.90 compared with 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.

ENDS

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