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Horwath HTL have released the latest performance report for New Zealand’s Hotel sector for April and May 2024.
Here’s what’s inside:
Decline in Occupancy Rates
New Zealand’s hotel sector experienced a significant decline in occupancy rates during April and May 2024. The average occupancy rate dropped to 58%, a stark contrast to the bustling 80% seen during the summer months. The downturn was most pronounced in major tourist hubs such as Auckland and Queenstown, where occupancy fell by nearly 30%.
Revenue Per Available Room Takes a Hit
The financial health of hotels was equally impacted, with Revenue Per Available Room (RevPAR) falling sharply. April saw a 25% decrease compared to the previous year, while May witnessed an even steeper decline of 30%. This trend was driven by both reduced room rates and lower overall demand, a double blow for hotel operators already grappling with high operational costs.
Regional Variations Highlight Uneven Impact
While the overall trend was negative, some regions fared better than others. Wellington, for example, managed to maintain a relatively stable performance, with only a slight dip in occupancy and RevPAR. In contrast, the South Island’s luxury lodges and resorts saw the most significant decreases, reflecting a broader drop in international tourism and high-end domestic travel.
Strategies for Mitigation and Recovery
In response to the downturn, many hotels have begun implementing aggressive marketing campaigns targeting domestic travellers. Discounted rates, special packages, and enhanced loyalty programs are some of the measures being used to attract local guests. Additionally, there is a growing focus on hosting events and conferences to boost mid-week occupancy rates.
Future Outlook: Cautious Optimism
Looking ahead, industry experts express cautious optimism. The upcoming ski season and a series of high-profile events scheduled for later in the year are expected to provide a much-needed boost. However, the recovery is likely to be gradual, contingent on broader economic conditions and the ongoing global travel landscape.
