8 Sep 2022

Lack of hotel developments outside biggest city could impact tourism

2:01 pm on 8 September 2022
no caption

While several new hotels are nearing completion in Auckland, a lack of developments elsewhere in the country has sparked fears for the sector's ability to bounce back from the impacts of the pandemic. Photo: 123RF

A sharp downturn in the number of hotel developments could lead to shortages in popular tourist destinations outside of Auckland.

While a number of new hotels were nearing completion in Auckland, it was a different story elsewhere, with little or no work underway.

Latest data from Stats NZ indicated there had been a $412.1-million drop in the value of hotel work put in place in the June quarter, over the past year.

"We have seen quite a lot of hotel development activity occurring in Auckland over the last three or four years," Colliers national director for hotels Dean Humphries said.

"But that's certainly been curtailing quite rapidly now and we're seeing very low levels of new construction of hotels across other major tourist centres in New Zealand such as Rotorua, Wellington, Christchurch and Queenstown.

"I think exacerbating the supply situation is we've seen a significant decline in other short-stay accommodation platforms such as Airbnb, motels and backpackers. "

He said the change in room inventory, which had lifted demand for hotel rooms, was likely to see new development beginning within the next year or two.

"I think most people in the industry felt that it would probably be three- to five-year recovery period to get back to Covid demand levels.

"But I think what we're seeing now is that because we've seen such a change in room inventory in those other platforms that I talked about, and a pivot towards people actually staying in hotels, versus motels and Airbnb, that demand driver alone will bring the supply pipeline forward."

Get the RNZ app

for ad-free news and current affairs