Market research creates compelling case for hotel investment

24 May 2016

New research shows that investment in hotel infrastructure is required to meet current and forecast demand in Auckland, Rotorua, Wellington, Christchurch and Queenstown.

A shortfall in new hotel rooms is expected to be up to 4,526 across these cities by 2025, over and above new hotels currently planned.

The research was commissioned to gain a better understanding of the demand for hotel accommodation now and in the future, including demand seasonality. It provides a detailed analysis of the current state of hotel supply and demand and the impact of forecast tourism growth.

Most importantly, it gives information to the private sector –domestic and international –about the opportunity for investment in hotels.

Research highlights

  • There is a current shortage of hotel rooms during high demand periods in all the centres. This is particularly in summer and autumn (December and March quarters) and when there are major events on.
  • In 2015, Auckland and Queenstown had consistently high occupancy rates (>80 percent) throughout the year and Queenstown is rapidly becoming an all-seasons location.
  • In 2015, Wellington had a stable occupancy rate (78 percent) across the year, with the December and March quarters having higher occupancy than the June and September quarters.
  • In 2015, Rotorua and Christchurch had high occupancy rates (>80 percent) in the December and March quarters, but lower occupancy during winter and spring (June and September quarters).
  • Forecasts suggest that the demand for hotels will outstrip supply over the next 10 years in all regions so occupancy rates will continue to grow.
  • International visitor arrivals will be a major driver of hotel demand (their numbers are expected to grow 5.4 percent per annum), while domestic demand is expected to grow at 2.5 percent per annum. China and Australia are expected to be largest contributors to the growing international demand.
  • Historical preferences suggest that demand for four-star and above quality hotels will be strongest over the next 10 years.

Download the full report below.

Read the Ministerial media release on the Beehive website.

Related Downloads

Download the latest Hotel Investment Prospectus from our Tourism page.