Christchurch hotels continue ‘new normal’ trade

Christchurch hotels continue ‘new normal’ trade

Christchurch hotels continued to trade steadily throughout 2012 in what has become the ‘new normal’ trading environment of high occupancy levels and solid rates driven by reduced room capacity.

New figures presented at the Tourism Industry Association New Zealand (TIA) Roadshow in Christchurch today show that 2012 was a year of recovery for the hotel sector with hotels reopening, earthquake recovery related business diminishing and traditional visitor markets starting to return to the city.

“Two years on from the Christchurch earthquake it is good to see that international visitors are returning to the city and liking what they see through innovations like the Re:START Mall and Gap Filler projects,” TIA Hotels Sector Manager, Rachael Shadbolt says.

The Christchurch hotel sector has a very different profile to the rest of the country where 2012 was relatively uneventful when compared to the previous year. After a 2011 which was impacted by the earthquakes and Rugby World Cup, 2012 provided an opportunity to stabilise occupancy and grow rates, Ms Shadbolt says.

“In contrast, Christchurch hotels have been running at high occupancy levels since the February 2011earthquake. This makes it challenging for hotels to close rooms for maintenance or earthquake repairs,” she says.

However, occupancy levels decreased 6% in 2012 compared to the previous year, partly due to the reopening of the Ibis Christchurch in September, which added around 5% to the major hotel room inventory.

“This year we are anticipating a big increase in hotel rooms, taking the available rooms in major hotels from around 900 to over 1600. This will likely have significant impact on occupancy levels and rates, despite some pent up demand,” Ms Shadbolt says.

In addition, motel room stock is now above pre-quake levels and more backpacker rooms are becoming available. With more hotels expected to reopen in the next 18 months, it is expected there will be enough rooms available to meet demand until a new convention centre and stadium are established.

“Until then, we don’t believe any new hotel developments are required in Christchurch,” Ms Shadbolt says.

TIA Hotels 2012 Annual Operating Survey shows that Christchurch TIA Hotel members:

• had a 81.6% occupancy rate which was down 6 points compared to 2011 (87.4%). While this was well above the national TIA Hotels’ occupancy of 69.9%, the Christchurch hotel environment is not typical of the rest of the country. The downward shift in occupancy year on year can be attributed to the reduction in earthquake recovery workers needing long term accommodation as well as extra room capacity being added in late 2011.

• achieved the highest average room rate (ARR) of the eight TIA Hotel regions at $152, on a par with 2011. This was well above the TIA Hotels’ national ARR of $136.

• employed almost 800 people across eight hotels in 2012.

Today’s Roadshow attendees are also being updated on the development of a National Tourism Plan.

TIA Chief Executive Martin Snedden says tourism is one of New Zealand’s biggest export industries but there is no clear national plan in place to lead the industry forward.

“Tourism has faced rapidly changing trading conditions over the last few years as a result of the global financial crisis, the growing number of visitors from Asian markets and the impact of the Christchurch earthquakes,” Mr Snedden says.

“At the same time, domestic tourism continues to be the mainstay for many tourism businesses and we need to look at how to encourage more New Zealanders to travel around their own country. Never has there been a more important time to focus on where the industry is going and how we are going to get there.”

TIA’s Regional Roadshow is visiting 10 centres around New Zealand between March and June. It is sponsored by TIA commercial partners Telecom, Westpac and Mercury Energy.  Go to www.tianz.org.nz/main/2013TIARegionalRoadshow for dates and venues.

Other highlights from the TIA Hotels Annual Operating Survey 2012:

• TIA Hotel sector members directly employed almost 11,000 permanent and casual staff

• Christchurch achieved the highest annual occupancy of 81.6%, down 3.4 points compared to 2011 (85%). Christchurch continues to be constrained by reduced hotel inventory but hotels are starting to reopen with Ibis Christchurch reopening in late 2012 and the Rendezvous opening their doors earlier this month.

• Auckland achieved the second highest annual occupancy rate of 75.6%, followed by Wellington (72.6%) and Rotorua (64.1%)

• The Central Park region (Taupo, Tongariro, Napier and Gisborne) had the highest average room rate of $157, followed by Christchurch ($152) and Wellington ($141)

• The largest individual source of business was independent leisure travellers (45% of all rooms sold, up 5 points compared with 2011), followed by corporate (21%) and tours & groups (17%)

• The largest consumer groups of hotel accommodation in 2012 were New Zealanders (55% of all rooms sold), followed by Australians (16%)

• On average, 39% of bookings were short-term (made up to seven days prior to arrival), 34% were medium-term (8-30 days prior to arrival) and 27% were long-term (more than 30 days prior to arrival).

TIA Hotel Sector

TIA’s hotel sector represents the interests of over 130 members throughout New Zealand, including international chain, large independent and privately owned hotels. TIA hotel sector members employ 11,000 staff nationally, with annual revenues of more than $866 million.

ENDS

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