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New Zealand hotel performance experiencing early rebound

Colliers International’s Q2 2020 New Zealand Hotel Market Snapshot, released this week, examines the impact the COVID-19 pandemic has had on the sector, and the early beginnings of the recovery process.
The New Zealand hotel sector has experienced a challenging second quarter, due to a full nationwide lockdown through much of April and May.

This has resulted in hotel occupancy falling to below 20 per cent across all key regions in April, with room rates also falling by up to 50 per cent.
However, since all domestic travel restrictions were lifted in early June, hotel performance has shown a surprisingly strong rebound.
Dean Humphries, national director of hotels at Colliers International, says 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 mandatory isolation period in an approved hotel facility.
“This is providing welcomed demand for a growing number of hotels across the country.”
The Colliers report estimates that 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).
Dean 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.
The July school holidays have provided a welcome reprieve to many hotel owners particularly in regions close to major metropolitan areas.

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