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Horwath HTL has released their recent report focused on Hotel Performance for February 2025 that highlights Queenstown as a continuing top destination.
The region experienced consistently strong demand through the summer months with Australians enjoying the direct trans-Tasman connectivity, and North American visitors taking advantage of the strong US dollar. With RevPAR, the region reached $322, a 7.7% increase driven by strong rate growth despite a slight dip in occupancy.
Destination Queenstown chief executive Mat Woods says they have several strategies in place to manage ongoing demand.
“An important one being our marketing approach to attract high contributing visitors – that is, those who stay longer, go further, forge connections, and fully immerse themselves in the region. Queenstown is continually focused on providing a great visitor experience, reflected in our strong visitor satisfaction net promoter score of 74, and there are some exciting accommodation refurbishments and refits underway as the industry continues to invest in the guest experience to support demand.” he says.
Sustaining growth
He says “The increase in RevPAR is a strong indicator of Queenstown’s appeal and resilience to changes in the market. Queenstown has built a strong reputation over many years with billions of dollars of private investment contributing to the region being known as a leading destination. “Queenstown and its surrounds have long been sought-after for international and domestic film and TV productions. This certainly provides an opportunity to enhance Queenstown’s global profile, which we leverage through our marketing, and we’re conscious of ensuring we stay focused on attracting high contributing visitors whose values align with ours, rather than a volume-based approach.”
“Events like Chinese New Year and Gibbston Valley Summer Concert contributed to Queenstown’s strong demand through the summer months, as well as the inaugural Natural Selection Tour Bike Aotearoa held in February, which is a great example of an event that appeals to high-contributing visitors.” says Mat.
Other market performances
The report outlines a mixed bag for other regions with an overall Revenue Per Available Room (RevPAR) declining by 1.8% compared to the same period last year. The average occupancy rate was recorded at 82%, which, while solid, fell short of the average 90% observed in February during the five years prior to the pandemic.
Nelson-Marlborough
The Nelson-Marlborough region reported a win with a significant 13.2% year-on-year increase in RevPAR, reaching approximately $255. The region achieved the highest occupancy levels among key markets, recorded at 93%.
Strong demand also came from wholesale business from Europe and North America, as well as Free Independent Traveler (FIT) business from Australia. Additionally, business travel bookings related to “blue economy” activities such as fisheries and aquaculture were recorded as strong.
Wellington decline
Wellington hotels however experienced a decline in occupancy levels from 78% to 74%, which translates to a 5% decrease in occupied rooms.
International visitor impact
The majority of this decline for Wellington occupancy came from international visitors, with room nights dropping by 12% year-on-year, contrasting with a 2% decline in domestic room nights. This decline coincided with a 6.1% decrease in non-New Zealand resident arrivals at Wellington airport. Subsequently, all key performance metrics for Wellington in February—occupancy, Average Daily Rate (ADR), and RevPAR—were below pre-COVID levels from 2019.
Rotorua hotels reported an occupancy increase from 79% to 82%, showing resilience despite a downturn in Chinese visitors due to the timing of Chinese New Year. The dip in Chinese visitors was offset by a rise in domestic visitors and those from the USA and Southeast Asia. In addition, Rotorua’s ADR (average daily rate) held steady, supported by improved product offerings over recent years that lifted quality standards and justified higher price points.
Auckland experienced a 38% increase in hotel supply over the past six years. Alongside the supply growth, demand increased by 23%, revealing less demand during high-demand periods. Despite an overall decline in non-resident arrivals (14% below 2019 levels), the number of room nights occupied in hotels exceeded 2019 levels by approximately 10%, attributed to a 20% supply increase across the country.
