Steady trading enjoyed by Queenstown hoteliers

Queenstown hotels enjoyed a year of steady trading in 2012 with domestic leisure, event and conference business returning to normal patterns following Rugby World Cup 2011 and the Christchurch earthquake which caused significant disruption to visitor flows around the South Island in 2011.

New figures presented at the Tourism Industry Association New Zealand (TIA) Roadshow in Queenstown 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 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 Queenstown’s 21 TIA Hotel members:

• had a 63.2% occupancy rate, up 3.4 points compared to 2011 (59.8%). This was below the national TIA Hotels’ occupancy of 69.9%.
• achieved an average room rate (ARR) of $141.80 which was down compared to 2011 ($144.25) but up $7 compared to 2010[1]
• generated over $139 million in revenue from a total of 3023 rooms
• employed over 2000 people and contributed around $90 million to the region through wages and salaries, food and beverage purchases, rates and other expenditure.

“The stabilisation of Queenstown’s occupancy levels over the last 12 months was good to see, particularly with additional hotel capacity added to the region in 2011. As 2011 brought unusual trading patterns, it is more realistic to compare rates with 2010, with ARR increasing in 2012 by $7 to $142 compared to the 2010 ARR of $135. This indicates good gains in room rate over the two year period which included an international event that had a tendency to inflate room rates in 2011, albeit in a small way for Queenstown compared to other regions,” Ms Shadbolt says.

Today’s Roadshow participants are also hearing about 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, Mercury Energy and JLT/Lumley.  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 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.

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[1] The downward shift 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.