Queenstown, Christchurch and Rotorua have enjoyed a strong start to the year, according to Colliers Hotel Market Snapshot.
International visitor numbers to New Zealand are rising as they edge closer to pre-Covid levels and this surge in travellers has contributed to escalating hotel room rates for Queenstown, Christchurch, and Rotorua, according to Colliers.
Information from Hotel Data New Zealand has been analysed by the Colliers Hotels team as part of its New Zealand Hotel Market Snapshot for Q1 that notes revenue per available room (RevPAR) was up 6.5 percent to NZD 239 in Queenstown for the year ending 31 March. This followed a record average daily rate of NZD 673 that was reached on 31 December 2024.
Christchurch (five percent) and Rotorua (three percent) also recorded increased RevPAR numbers.
It was a different story for the main centres of Auckland and Wellington, which saw their RevPAR figures drop by 10 percent in the year to 31 March.
Derrek Anderson, Director of Hotel Brokerage and Advisory at Colliers, said there were differing reasons for the decline in figures for the North Island’s two largest cities.
“In Auckland, there is an increased supply of hotel rooms that has impacted the numbers, while the city would benefit from a greater number of major events,” Anderson said.
“We have seen concerts at Eden Park and the SailGP racing lead to strong demand, indicating the potential that could be unlocked for the city with a comprehensive programme of future events.”
Anderson added that next year’s opening of the New Zealand International Convention Centre (NZICC) looked promising for the city and projections from the NZICC suggest the facility will attract 33,000 new international visitors to New Zealand, which equates to 101,000 additional visitor nights.
“In Wellington, occupancy and average daily rates are down due to the central Government’s reduction in spending but we do not see this as a long-term shift and expect demand to bounce back in line with the broader New Zealand economy.”
With international visitor numbers sitting at 86 percent of pre-Covid levels, the Tourism Export Council of New Zealand has forecast a full recovery by March 2027. Australian and US travellers are returning in big numbers, while Chinese tourism numbers have also increased in the past year.
While transactions in the hotel space have been infrequent following the challenging period caused by the Covid-19 pandemic and recessionary economic conditions, Anderson said enquiries have been picking up.
“A key variable influencing hotel asset values is the cost of capital. As the Official Cash Rate continues to drop in New Zealand, we expect that will boost transaction numbers, despite the backdrop of geopolitical uncertainty that investors are currently navigating,” said Anderson.
“The recent sale of the InterContinental Auckland to an offshore purchaser underscores the long-term prospects of the New Zealand market as we move forward in our economic recovery.”
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