Survival Mentality for Auckland Hoteliers

With a survival mentality required to get through several more months without international tourists, hotel and motel operators across Auckland are preparing for a difficult year ahead.

December 2021 saw paying guests stay in just 24 percent of non-MIQ hotel rooms in Auckland, significantly down on the 47 percent occupancy seen in December 2020, according to economics consultancy Fresh Info.

Before Covid-19 border closures, Auckland hotels would have expected to be 80 to 85 percent full during that month. And with revenue per available room at only $44 – well below sustainable levels – the industry fears the domestic market won’t be enough to keep some accommodation businesses afloat.

Last January, the America’s Cup threw Auckland hoteliers a lifeline, but no such luck this year.

Summer would normally see Australian tourists here in droves, with a large number staying in Auckland CBD hotels after they arrive, then spending weeks in regional motels, according to Hotel Council Aotearoa’s strategic director, James Doolan.

However, Doolan believes with rising anti-social behaviour on Queen Street, retail shops lying empty and a lack of social events over summer, city visitors won’t be flocking back any time soon.

“Outside of Auckland, there’s a perception that the Auckland CBD is Covid-19 ‘ground zero’ since Auckland is the location of most of New Zealand’s MIQ rooms. The lack of free-spending international tourists in our city centres is one of the reasons why those locations are fairly grim, ever since borders first closed in March 2020,” said Doolan.

“If the government could give exemptions for sporting events to be held here, for example, that would be beneficial for everyone. We have to look at industries that we have a relationship with. But we can’t keep drawing down on the domestic market as it’s hard.”

Franz Mascarenhas, owner of Cordis Hotel – Auckland’s largest – is optimistic the year’s fourth quarter will bring a much-needed breakthrough.

“We think that it will ramp up through the year, although lots will depend on the government's policies. We know it will take time. The first half of the year will be quite subdued but ramping up as the months go by. We want a strong last quarter.”