New Zealand continues to witness record breaking tourism numbers with performance metrics for the first quarter of 2017 showing no sign of slowing.
The star performers for the first quarter this year were Queenstown and Auckland. Queenstown which delivered occupancy of 90% at an average daily rate (ADR) of $240, a 15% increase over the same period in 2016. Auckland recorded an occupancy of 91% and an ADR of $225, an increase of 16%. Moderate to strong ADR growth were also recorded in other regions albeit occupancy rates appear to have generally plateaued in most main centres.
Looking ahead, the second quarter of 2017 is also likely to be a record breaker with strong demand anticipated for the country’s shoulder season. Auckland has recently hosted the World Masters games with over 25,000 participants and this will be closely followed by the upcoming British and Irish Lions Tour in June/July. It is expected over 20,000 fans will visit our shores over the month-long tour, creating a ‘spike’ in performance as last witnessed during the previous Lions tour in 2005 and the Rugby World Cup in 2011. Strong market fundamentals together with high profile international events will set the New Zealand hotel sector up for potentially its best performing year on record.
On the back of this exceptional performance, it is not surprising that we are seeing a growing number of new hotel projects, with the most notable announcements over the past six months being:
- Marriott International, will open its first hotel in New Zealand under its “Four Points by Sheraton” brand in late-2017. The 255-room hotel will be located at 396 Queen Street in Auckland, a 19-level office building currently being converted to a hotel by the Russell Property Group,
- A 227-room Holiday Inn Express will be built in Queenstown by Australian fund Pro-Invest,
- A conversion of the T&G Building in Wellington to a 108-room Doubletree by Hilton,
- Auckland International Airport Ltd and Tainui Group Holdings Ltd partnering to develop a new 250-room Pullman Hotel beside the existing Novotel Auckland Airport,
- A circa 260-room Peppers hotel to be located on Shotover Street in the Queenstown town centre.
Investor sentiment remains strong based on a recent roadshow to Asia promoting One Market Square, a proposed 165 room luxury hotel to be built on a prime waterfront site in the heart of the Viaduct Harbour and has attracted significant offshore interest to date.
New Zealand is now on the radar of many global hotel investors who see further growth in the region and are attracted by the favourite investment climate that includes no stamp duties, land or capital gains taxes.
Click here to download the New Zealand Hotel Market Snapshot May 2017
See also:
Get to know Dean Humphries of Colliers International
Colliers International to market world-class waterfront hotel site in downtown Auckland
Queenstown leads most buoyant period for hotel sales in a decade
