Lake Tekapo faces accommodation squeeze as holiday crowds surge

An influx of international tourists over Lunar New Year is intensifying Lake Tekapo's accommodation crunch during the peak summer season.

Amid reports of scarce vacancies and expensive accommodation options, residents and local business operators are worried the higher prices may ultimately scare visitors away.

To sustain the same number of tourists in the region, locals are calling for stronger community infrastructure and better public facilities to handle peak season crowds.

'Accommodation extremely difficult to book'

China's Spring Festival holiday ran from 15-23 February this year, with tourist bookings stretching to about two weeks around the lunar new year festival.

Xiaoyang Lu, a tourist from Shanghai, used the holiday to travel around the South Island, stopping at Lake Tekapo along the way.

She said Lake Tekapo was known for its stargazing offerings and was also a convenient stop between Christchurch, Mount Cook and Wānaka, which was why she chose to stay there.

However, she found it difficult to find accommodation in the town.

"There were very few rooms available in Lake Tekapo," Lu said.

"A lot of people booked six months earlier. When I booked two months ago, there were only a few left, and prices had skyrocketed.

"The remaining hotels and bed and breakfasts were extremely expensive. Some were charging close to 10,000 yuan (about $2400) a night."

Lu said she ended up sharing a holiday home with other tourists who had booked earlier, paying about 1700 yuan ($400) for a single room for one night.

She said she hoped accommodation prices in Lake Tekapo would be more stable in future without dramatic spikes during peak periods, and that there would be enough rooms to meet demand.

Xiaolin Zhou, a tourist from China who lives between Dongguan and Shenzhen, spent 10 days driving around the South Island from 16-25 February.

Zhou also struggled to find accommodation in several popular destinations.

"Accommodation was extremely difficult to book," Zhou said.

"The most difficult places were Wānaka and Tekapo. It was almost impossible to book hotels or bed and breakfasts in either town," she said.

"We ended up having to stay in nearby towns. Lake Tekapo was particularly difficult. I booked one night in Twizel and another in Fairlie."

Zhou said frequent accommodation changes were tiring and diminished the overall experience. She also raised concerns about sharp price increases.

"There was barely any accommodation available in Lake Tekapo from mid- to late February," she said.

"Only a few detached houses were left, with prices above 10,000 yuan (about $2400) a night. It's very expensive but offers little value for money."

Zhou felt the tourism boom was putting pressure on small towns, from room capacity to retail and hospitality services.

"You can always see long queues outside shops and restaurants," she said. "Some tourist activities were also fully booked."

'Daylight robbery'

The impact of price hikes on accommodation was not limited to tourists.

Some Lake Tekapo residents and business operators said they were also affected.

Jared Simcox, managing director of High Country Hospitality, which operates several accommodation brands, said The Godley Hotel in Lake Tekapo had been fully booked from mid-December through Easter.

He said group bookings made up most of the hotel's business, and Mandarin-speaking guests accounted for about half of its clientele.

Simcox said several factors were driving higher accommodation prices during peak periods, including limited hotel supply and demand outstripping availability.

However, he was particularly concerned about price hikes applied by some third-party operators.

"There are third-party operators such as online travel agents and retail travel agents who are accessing our wholesale rates, for example at least $200 a night," he said.

"What they're doing, in some cases, is marking those rates up to two or three times the wholesale rate and redistributing them online overseas.

"We've actually asked that this behaviour stop because we don't think it's a fair representation of our product, and we also think it offers poor value."

Simcox said some operators were using dynamic price structures, relying on technology that tracked regional prices and available inventory, then pushing rates higher as rooms became scarce.

He said such tactics had become problematic.

"The problem with that is you can have a scenario where a one-bedroom studio or flat is $1000 a night because the computer doesn't know when to stop," he said.

"The risk is that people will start to see Lake Tekapo as poor value, and they'll stop coming. As an industry, we would like to see that change so that customers don't feel like they're being ripped off."

Dave Larken, manager of Grand Suites Lake Tekapo, shared similar concerns.

He said his accommodation was fully booked every year during Lunar New Year.

Bookings were increasing every year, but he had noticed some operators, including short-term rental providers, using the demand to justify pushing accommodation prices higher.

He said his accommodation kept stable rates throughout the year and did not raise prices during peak holiday periods such as Easter, Lunar New Year and Christmas.

However, he raised concerns about some short-term rental owners charging tourists exorbitant prices, including as much as $1000 a night for a room, which he described as "daylight robbery".

"We're not happy about that because I think it's very unfair on tourists," he said.

Infrastructure woes

Simcox said demand in Lake Tekapo appeared to be outstripping supply, but visitor numbers should be managed within the limits of available accommodation because the local infrastructure was already struggling to cope, and increasing the accommodation options alone would not be an effective solution.

"It's great that people want to come here and visit. Our economy depends on it, and we're grateful for the business," he said.

"But our roads aren't designed to handle that volume. We don't have anywhere for people to park … we don't have enough restaurants to support that kind of demand.

"By increasing supply, there's a risk of all kinds of unintended consequences. The growth strategy needs to be quite precise and thoughtful."

Jessica Frewen, operations manager at Discover Tekapo, said demand for accommodation in Tekapo spiked during Lunar New Year and other peak travel periods when international visitors flocked to the lakeside town.

However, she did not believe Lake Tekapo had crossed into overtourism.

"There is a reason it is a destination for travellers," Frewen said.

"People come to admire its beauty, and the town itself is able to meet demand and allow visitors to experience something unique and memorable."

Frewen said Lake Tekapo was accustomed to handling a large number of visitors.

She said the strain was showing up less in the visitor experience than in the infrastructure that supported it.

"Rubbish collection is a big issue in the town, and public services like toilets are also a problem," she said.

"Roads can get heavily congested and there is a lack of commercial property."

Tourism impact

A spokesperson for the Mackenzie District Council said the region experienced strong demand from October through April, and that demand often exceeded supply.

District council metrics, including visitor spending, wastewater usage and Hooker Valley Track counters, all indicated visitation had exceeded pre-Covid levels, especially during the summer months, the spokesperson said, noting that the region was under significant pressure from large tourism numbers during peak season.

"The numbers place significant pressure on our infrastructure and facilities, and an unfair burden on our community and small ratepayer base," the spokesperson said.

The spokesperson said a district council survey conducted last year showed that the community valued the benefits of the visitor economy but was deeply concerned about its adverse impacts.

With Lake Tekapo's permanent population at about 600, many infrastructure upgrades were unaffordable for local ratepayers, including a new wastewater treatment plant, public toilets and housing for local workers who service visitors, the spokesperson said.

The spokesperson said the real solution was to introduce sustainable funding mechanisms for local government, including a local visitor levy and ensuring the international visitor levy was used for its intended purpose, to help ease pressure on tourism communities.

"Increasing accommodation supply for visitors needs to be matched by an increase in housing supply for the community to service the businesses hosting visitors," the spokesperson added.

Tourism Minister Louise Upston said it was essential that New Zealand's tourism system supported sustainable growth that enriched its regions and communities.

"The tourism growth roadmap provides a pathway to both grow tourism while supporting the supply side - that is, the services, infrastructure, workforce and businesses that support the visitor experience," Upston said.

"This year my focus will shift toward strengthening the supply side of the tourism sector, with the allocation of IVL [international visitor levy] spend being 40 percent supply side and 60 percent demand," she said.

"This will include investing in infrastructure to help meet growing demand."