Mark Smith, senior economist at ASB said “The allure of NZ as a tourism destination shows few signs of dimming, even in a traditionally seasonally‐low time of year."

Stats NZ’s travel and migration figures for August reflect NZ’s visitor arrivals reached a new annual record of 3.67 million for the year to August: 

• This is up 9% compared to the previous year.
• The increase was driven by arrivals from Australia, up 6% or 86,500
• And an increase from the United States, up 21% or 55,200
• 234,000 visitors arrived in August, up by 12,800 yoy.

The biggest changes in August arrivals were from:

• Australia, an increase of 5,200 visitors
• China, an increase of 3,100 visitors
• United States of America, a decrease of 2,200 visitors
• Indonesia, an increase of 1,200 visitors
• Hong Kong, an increase of 1,100 visitors

Part of the appeal may be that New Zealand hotel room rates are considered inexpensive compared to other international destinations. New Lincoln University research shows New Zealand hotel room rates from 2000 to 2017 were cheaper than Los Angeles, Melbourne, Sydney, Singapore and Greater London.

“Increasing tourism demand, coupled with a lack of available hotel rooms has seen New Zealand hotel room rates increase significantly since 2000, but this was off a very low starting base”, says Dr Tony Brien, senior lecturer in Business and Hotel Management. “Hotel room prices are set by what the market is prepared to pay,” Dr Brien said.

“Present hotel room prices are not necessarily expensive, and price should be considered as the sum of the value and the hotel experience that the guest receives. Cheap or discounted hotel room prices can have operational ramifications including not being able to appropriately maintain the hotel stock which impacts guest satisfaction. Further, this can devalue the whole New Zealand hotel industry and risks New Zealand’s international reputation as a quality destination”.

New hotel rooms being built will increase the supply, but that doesn’t necessarily mean hotel room rates would go down. “Many of the new hotels are high star-rated international brands who bring with them international levels of service and physical structure, and as a consequence demand a higher room rate. In effect, this can enable existing hotel room rates to remain at their present levels, or arguably, hotel room rates have the capacity to increase further to ensure ongoing investment in the hotel experience,” said Dr Brien.

See also:

Construction set to start on $240 million Christchurch Convention Centre

Hotel development in New Zealand shows unprecedented growth​

Sports tourism pushes hotel occupancy rate to 90% in Australia’s and New Zealand’s sporting capitals