Steady trading enjoyed by Auckland hoteliers

Auckland hotels enjoyed a year of steady trading in 2012 with leisure, corporate and conference business returning to normal patterns following Rugby World Cup 2011.

New figures presented at the Tourism Industry Association New Zealand (TIA) Roadshow in Auckland today show that 2012 was a year of gradual stabilisation in occupancy and rates for many TIA Hotel regions.

“After a very eventful 2011 with the Rugby World Cup and the Christchurch earthquake changing visitor flows significantly, 2012 was relatively uneventful. This offered hotels an opportunity to adjust to the new post-GFC business environment of shifts in visitor markets, the increasingly short lead nature of bookings and people remaining very price conscious,” TIA Hotels Sector Manager Rachael Shadbolt says.

TIA Hotels 2012 Annual Operating Survey shows that Auckland’s 37 TIA Hotel members:

• had a 75.6% occupancy rate, down 1.6 points compared to 2011 (77.2%) and the second highest occupancy of all TIA Hotel members after Christchurch[1]. This was above the national TIA Hotels’ occupancy of 69.9%
• achieved the sixth highest average room rate (ARR) of the eight TIA Hotel regions at $136, down $21.60[2] on 2011, but up $2.93 on 2010 which is a better (non-event year) comparison. This was on a par with the TIA Hotels’ national ARR of $136.30.
• generated over $390m in revenue from a total of 6885 rooms
• employed almost 4200 people and contributed $293 million to the region through wages and salaries, food and beverage purchases, rates and other expenditure.

 

“The stability of Auckland’s occupancy levels was good to see. The dip in ARR compared to 2011 can be attributed to hotel room rates evening out over the year and not being influenced by major sporting events,” Ms Shadbolt says.

“Auckland had the lion’s share of the big Rugby World Cup games including the opening match and the final. This meant strong event driven rates were enjoyed by many hotels in the region throughout September and October 2011 and this comes through in the data.

“Prior to Rugby World Cup, Auckland also added 700 additional rooms to the city with the opening of three new hotels in time for the event. This could have resulted in an occupancy and ARR dip as hotels reapportioned market share, so it is heartening to see that occupancy has been maintained and ARR has grown when compared to a more normal 2010.”

Auckland continued to enjoy good event business in 2012, with the Vector Arena regularly filled by visiting rock bands or shows. The Mary Poppins stage show would have also contributed to good domestic visitation to the region, she says.

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 Heritage OGB Building and the Rendezvous set to reopen soon.
• 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.

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[1] Two years on from the Christchurch earthquakes, Christchurch hotel stock continues to be constrained. However, year on year data comparisons can now be accurately made as the current trading environment has been through two data cycles. Therefore Christchurch data is included in the 2012 Annual Operating Survey results and is comparable to other TIA Hotel regions.

[2] The downward shift of $21.60 in ARR year on year can be attributed to the exceptional changes in business patterns created by Rugby World Cup 2011.  Strong demand led to strong event driven room rates in 2011.