STATE OF THE AUCKLAND MARKET

In a Horwath HTL market report, New Zealand director Wim Ruepert links a decline in Auckland’s RevPAR to a lack of events like the British & Irish Lions Tour. RevPAR for Auckland hotels has declined by four percent from last year in the eight months ending in August.

While hotel occupancy rates of 82.6 people during this period are high in a general context, but they have also gone down, as they are the lowest they’ve been since 2014. While there is no Lions Tour type event happening in the near future, there is the Americas Cup and APEC to look forward to in 2021 which will boost visitation and fill many hotels during the events.

“If we look at the past five years, most of the growth has occurred over the high season and because of major events in the shoulder and low seasons such as the World Masters Games, Lions Tour, Soccer Under 18 World Cup,” Ruepert said.

However, with 41 hotel projects opening in the next five years, with a total of 3,900 new rooms expected to be open by 2023, it is unlikely Auckland will be able to maintain its occupancy rates during the off-season.

For Auckland to maintain its average occupancy rate of 75 percent per year, it will need to sell close to 1.1 million room nights per year.

“History has shown us that filling rooms in the off-season is much harder than in the high season, let alone if we have 50 percent more rooms available.

“To absorb the increase in planned room supply, Auckland will need more major events and target emerging markets who travel off-peak.”