Lockdown sees third of hotels shut – Colliers

17th April 2020 By Staff Reporter | news@tourismticker.com | @tourismticker

A third of New Zealand hotels are currently closed with more expected to shut their doors in the coming weeks, according to new research from Colliers.

A survey of hotel owners undertaken by Colliers on 7 April found that 33%, or more than 60 hotels accounting for close to 8,000 guest rooms, had closed throughout the country.

Source: Colliers

It added that “based on discussion with a number of owners, it is likely that further of [the 67% that remain open], will close over the next two weeks with many not anticipating to open until Q3 or Q4 2020, depending on when sustainable demand returns”.

The agent’s NZ Hotel Market Performance Snapshot said that although it was early days, it was clear that “the post-Covid-19 environment for hotels and the wider tourism sector will be vastly different than the one we were in before the pandemic started”.

Based on predictions that international inbound travellers would not to be back “in any notable numbers before 2021 – with the possible exception of Australia should both countries successfully control Covid-19 over the next few months”, Colliers said it was clear that there would have to be a domestic-led recovery.

“With this segment previously representing circa half of our country’s hotel total guest nights, we remain hopeful tourists/corporates will return as early as Q3 2020 & start to fill up rooms,” said Colliers.

“We anticipate international inbound to recover from 2021, first by Australia and then those countries who appear to have Covid-19 under control. We also remain hopeful a vaccine will be developed over the next 12 months, which will then enable wider international travel to rebound more quickly.

“In summary, we predict 2020 to be a very challenging year for the NZ hotel sector, with an emerging recovery during 2021, followed by increasing recovery thereafter.”

The snapshot also updated activity for March, revealing that RevPAR plummeted in the five main centres led by Rotorua, where it had more than halved from $134.12 in 2019 to $66.99 this year. It was closely followed by Wellington where RevPAR dropped 49.6% to $95.85, and Queenstown, which fell 45% to $131.74.

Elsewhere, Christchurch dropped 42.2% to $94.14 and Auckland was the strongest but still recorded a 40.4% decline to $121.33.

Annual figures for the year to March – a period which took in the start of border closures and the move to alert level 4 lockdown – showed the impact of the growing pandemic with RevPAR, ADR and occupancy falling across the board.

On an annual basis, Auckland’s RevPAR was down the most falling 8% to $155, with Christchurch down 7.3% to $115, with Wellington a close third dropping 7.1% to $134. Rotorua contracted 4.6% over the year to $104 while Queenstown fell 3.2% to $197.

Rotorua had the lowest occupancy in the 12 month period when it fell from 78.6% to 74.3%, while Wellington dropped to 74.7% from 79.8%. Christchurch recorded occupancy of 75.7% down from 77.5%; Queenstown was on 79.2% down from 81.5% while Auckland fell 3% to 80%.

Auckland recorded the greatest movement in average daily rates falling 4.6% off ADR to $193.62, while the other four centres all stayed relatively stable.