New Zealand’s hotel market is showing signs of a recovery, with demand for rooms up since the end of domestic travel restrictions.
A new report on the impact of Covid-19 on the hotel sector has found that the Government's mandatory isolation measures for returning Kiwis have been positive for the industry.
Dean Humphries, national director of hotels at Colliers International, which compiled the report, says hotel occupancy fell below 20 per cent during the lockdown period in April, while room rates dropped by up to 50 per cent.
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“However, since all domestic travel restrictions were lifted in early June, hotel performance has shown a surprisingly strong rebound,” he says.
He says the government's use of hotels for returning Kiwis had been a strong contributing factor in the sector's turnaround.
“The country is witnessing a significant increase in the number of returning New Zealand citizens and residents, all of whom are subject to a 14-day isolation period in an approved hotel facility," he says.
“This is providing welcomed demand for a growing number of hotels across the country.”
The report found 29 hotels, accounting for close to 6,000 rooms, are currently being utilised as managed isolation facilities across New Zealand.
As at early July 2020, close to 40 per cent of Auckland hotel rooms are being utilised for mandatory isolation, followed by Christchurch (31 per cent), Rotorua (20 per cent) and Wellington (3 per cent).
Humphries also notes that on top of this largely unanticipated demand, there are also a number of other key factors driving recovery, including:
• An increase in domestic leisure guests over weekend and school holiday periods;
• Special visa entries for international guests, including the Avatar II production crew and America’s Cup syndicates and;
• Early recovery of the corporate and MICE (meetings, incentives, conferences and exhibitions) segments.
Humphries says the July school holidays have provided a welcome reprieve to many hotel owners particularly in regions close to major metropolitan areas.
“Queenstown, Wellington and Rotorua have led the charge with monthly occupancy increasing to between 20 per cent to 35 per cent by the end of June, with early indications the July school holidays will lift occupancy in many of our main regions to over 50 per cent by the end of the month.”
