Looking for Opportunities in a Perfect Storm

13 May 2011
Media Statement

Looking for Opportunities in a Perfect Storm

Hoteliers say recent New Zealand and international events have created “a perfect storm” that is having a significant impact on their performance.

Speaking at the 5th Annual New Zealand Hotel Industry Conference in Auckland yesterday, New Zealand Hotel Council (NZHC) Independent Chair and conference co-host Jennie Langley said there was no doubt that these are “unusual and challenging times”.

“Many in the industry have been using the term ‘a perfect storm’ after a number of local and global events have taken place, all impacting on hotels, in a relatively short time. The Queensland floods and the Christchurch earthquake were both significant events, but have now been surpassed by even greater events such as the Japan tsunami and the resulting reduction in Japanese, Chinese and South Korean visitors. Add to that the strong Australian dollar and the dire UK economy and within a relatively short time the operating environment has changed from being challenging and extremely difficult. Any one of these events would have sent a ripple through the hotel industry but to have them all happen at once creates a major challenge for the whole tourism sector.”

NZHC monthly statistics indicate that the first quarter of 2011 showed similar performance to Q1 2010 with a national occupancy rate of 78.8% (78.7% Q1 2010).

The Christchurch earthquake had an obvious negative impact within and outside of Christchurch, the main tourism gateway to the South Island. Outside of Christchurch, Queenstown was the most affected with an occupancy decrease of 2.9 points (79.6% 2010 to 76.7% 2011) for the quarter and a 10.1% decrease in occupancy for March 2011 from 80.6% in 2010 to 70.5%.

Rotorua's occupancy for the quarter was on par with last year (74.3%), however March results were also down 5.6% from 70.4% in March 2010 to 64.8% in 2011.

By contrast, some regions enjoyed occupancy increases due in part to the earthquake, including Nelson/Marlborough, Dunedin and Wellington.

Recently released April 2011 NZHC statistics showed another month of negative growth for Queenstown down 7.1 occupancy points from 66.6% in 2010 to 59.5% in 2011. However, other NZHC regions showed small growth or maintained occupancy levels similar to April 2010.

“Certainly, besides Christchurch, Queenstown has been the most affected by events in recent months and we are really hoping for a fantastic ski season to help boost occupancy and room rates in the region. Fortuitously TRENZ 2011, the country’s largest annual tourism sales event, is being held in Queenstown at the end of May bringing 290 local and international Buyers into the region. This is a great opportunity for the hotels” she said.

“There will be a range of opportunities around the country as the RWC 2011 plays out. Hotels are not going to be full for the entire six weeks of the event. There will be pockets of high demand around certain games and the room rates will reflect this peak period, but there will be a wide variety of rooms available throughout the country at very competitive rates during the tournament and in regions where there are festival events taking place”.

Travellers’ booking patterns in recent years have become much more last minute and it seems that even an international event like the RWC has not changed this trend. We continue to recommend that people book as early as practical to be sure of securing the accommodation they want.”

“There will be rooms for all visitors and they will be very welcome, whether they are here for the rugby or to experience what New Zealand has to offer”.

ENDS

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