MANAGING GROWTH IN THE ACCOMMODATION SECTOR

I hope everyone is busy with a fantastic summer season and you’ve also had an opportunity for some down-time. We are now well into the new year and from all accounts it is living up to the pre-Christmas expectations of a boomer.

We knew that 2015 was a big year for our accommodation sector and the year-end numbers have proved just how big it was. TIA’s Hotel Sector members recorded a national average occupancy rate of 79%, up 3 points on 2014 and the highest level in at least five years.

The average room rate (across all star grades) was $157 (up $12 on 2014). Combined with the improved occupancy rate, this pushed the average Revenue Per Available Room (RevPar) up by $14 (13%) to $124.

These improved returns will help encourage investment and refurbishment, which is definitely needed as our visitor numbers continue to grow. While our hotel revenues are still below what is being achieved in Australia, and high land and construction costs in New Zealand remain a barrier, the upward trend is encouraging.

However, continued rate growth is still needed and it is important that we continue to work on this by managing the various channels and not being afraid to correctly value our product offering. To meet the goals of Tourism 2025, it is essential that we encourage investment to improve the quality of current infrastructure to meet rising visitor expectations, as well as creating a positive environment for investment in new facilities.

We know that more hotels are needed in some areas, along with improvements to cruise port facilities. Many parts of the country also need better roading, water and sewerage infrastructure to cope with population and visitor growth. We also know new products are needed to attract visitors and provide a great experience at different times of the year.

Positively, in the latter part of 2015 we had announcements that both the Auckland International Convention Centre, and a new Council-funded Wellington Convention Centre and movie museum had been green-lighted.

The tourism industry’s Tourism 2025 growth framework highlighted that because many conferences are held in the shoulder and off-seasons, between March and November, they create demand for accommodation and other services at a quieter time of the year. And, because business event visitors often extend their stay, business events create opportunities for regional dispersal.

Two important ways we can spread the benefits of the big growth in arrivals – more than 200,000 additional visitors annually – are smoothing out seasonality and encouraging regional dispersal.

TIA has identified infrastructure investment as a priority for our efforts this year and we are working with the government to identify opportunities and remove roadblocks. The tourism industry set itself a big goal with Tourism 2025 – an industry worth $41 billion by 2025 – but as we head into 2016,it looks very achievable.

Sall Attfield, Sector Manager
Hotels, Tourism Industry Association New Zealand