Boom times loom for hotel industry

Last updated 11:24 04/06/2014

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Hotels will be busier, charge guests more and make bigger profits in what is expected to be a "golden" run, an industry report says.

Hotel and tourism consulting firm Horwath HTL said the prospects over the next two to three years were bright for international visitors and the New Zealand domestic economy.

Strong overseas visitor numbers and New Zealanders staying away from home should mean greater demand for hotels. Together with a limited number of new hotels being built, hoteliers should be able to lift average occupancy rates and/or how much they charged for rooms, Horwath director Terry Ngan said.

"This should result in higher room revenues and significantly stronger bottom-line profitability for hotels," he said.

Hotels have benefited from more tourists arriving from China and Australia, following more government funding for Tourism New Zealand.

Average occupancy for hotel members of the Tourism Industry Association hotels was 73 per cent in the year to March 31, 2014. That was up 3 per cent on the same period a year ago and 4 per cent on the previous  year which included the Rugby World Cup period.

For the March year, the average room rate for TIA hotels was $141 a night excluding GST, up $4 or 3 per cent on the year before. The average rate was down $7 a night compared with the high rates charged during the Rugby World Cup year.

International visitor numbers were up 6 per cent in the year to March 31, 2014, the biggest lift in the past four years, because of big gains in arrivals from Australia, China and the United States.

Horwath's report said more than 1400 new hotel rooms would be opened in the next three years or so, including seven new hotels and the expansion of four existing hotels.

Auckland, where hotel occupancy hit 79.4 per cent in the March year, was likely to see the most new hotel rooms opened, with 743 new rooms planned, more than half the total.

In Wellington a 165-room Hilton hotel with a 2000-person convention centre is expected to be built and may open in 2017.

Wellington hotel occupancy hit a 10-year high in the past year at 75 per cent.

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