Dean Humphries, Hotels National Director at Colliers International, says the sector experienced an “exceptional finish” to 2017, with its key trading metrics the strongest since records began.

“With record international tourist numbers and little new room supply, hotels were incredibly tightly held last year,” he says.

“No major hotels were sold in 2017, contributing to one of the lowest volume of hotel transactions on record.

“However, that looks likely to change this year as occupancy rates plateau, room rate growth slows, and more new hotels are developed.

“We’ll see more hotels being offered to the market for sale as some owners look to divest of their assets after benefitting from a significant uplift in value over recent years.”

Humphries says that trend is already evident, with the iconic Skotel Alpine Resort (pictured) on the slopes of Mount Ruapehu being listed for sale last week.

Known as the “highest hotel in New Zealand” due to its elevation of 1,134m above sea level, the 3 star plus hotel is being marketed for sale by Humphries and Colliers International Broker Mathew Gibbard.

Offers by way of expressions of interest close on 1 March.

Built in the 1960s, the hotel has been extended and upgraded a number of times and currently comprises a 31 room hotel, five standalone chalets, and 12 rooms of budget accommodation with 36 beds.

As well as staff and management accommodation, the resort also offers a large restaurant and bar, gymnasium, spas and saunas, games rooms, on-site ski hire and equipment facility, and 70 car parks.

Humphries says another “significant” hotel asset is due to be put up for sale later this month – the first major hotel to be offered to the market in more than a year.

“Market conditions are excellent for owners looking to divest,” he says.

“Last year, New Zealand completed the fifth consecutive year of its current tourism boom, which started in 2013.

“Hotels were one of the key beneficiaries of the 3.7 million visitors who came to our country in 2017, with hotel occupancy and room rates reaching record highs in all major centres.

“This is now traversing through most regional markets which are also reporting strong occupancy and room rates.”

Humphries says Auckland and Queenstown continue to lead the charge with occupancy reaching 86.8 per cent and 82.5 per cent respectively for the year ending December 2017, with many other regions now recording occupancy levels above 75 per cent.

Room rates also continue to climb with Queenstown recording the highest room rate at $225.43, a 16 per cent increase from the previous year, followed closely by Auckland at $209.92, a 14.5 percent increase.

Other key trends in the hotel sector last year included:

• One of the lowest recorded volumes of hotel transactions, with owners electing to hold onto their assets.  Collies International research recorded just $50 million worth of transactions in the wider hotel sector, characterised by smaller properties (under 100 rooms) predominantly in regional locations;
• Historically low volumes of new hotel supply, with an increase of just 738 rooms (3.5 per cent) of new inventory across the country including M Social (repositioning of the former Copthorne Auckland), Haka Hotel, Ramada Albany, Crowne Plaza Christchurch, The Park Wellington and QT Queenstown;
• An increasing development pipeline of proposed hotels, particularly in Auckland and Queenstown;
• The continued popularity of short stay e-platforms such as Airbnb, with exponential growth in listings throughout New Zealand.

To discuss the Hotel market in further detail contact Dean Humphries of Colliers International via the below contact details.

See also:

Major New Zealand luxury hotel on the market

New Zealand's largest hotel coming in 2020

Naumi Auckland Airport officially opens