The pool at the Sofitel Dubai The Obelisk. Photo / Supplied
The pool at the Sofitel Dubai The Obelisk. Photo / Supplied
A hotel industry boss says room rates in New Zealand could be lower if costs were reduced — particularly the cost of workers.
And although the price of a room in New Zealand cities is considerably more right now than any comparable accommodation in popular Europe stopover Dubai, those NZprices are less than in other major tourism destinations.
This month, Sofitel Dubai The Obelisk is just one high-end, five-star hotel offering luxury rooms at low-season rates from $254 a night. Booking.com this week features properties in Dubai from as low as $15 a night, while the cheapest in Auckland is $88, and rooms at high-end hotels here have regularly been fetching $500-plus a night, in winter.
The strategic director of Hotel Council Aotearoa, James Doolan, acknowledged that some hotels in this country were expensive, but said the average room rate across the board was $228 and the average return to the hotel owner per room was much less than that, at $158 a night.
“Broadly speaking, room rates in New Zealand aren’t that high in comparison with the kinds of cities we rate ourselves against, such as an international capital city or commercial city centre or an Australian destination in Sydney, Melbourne, New York or Los Angeles,” he said.
“We’re actually pretty cheap, but the challenge of course is at a luxury hotel, where you might have a full-time staffing ratio per guest room of 1 to 1. New Zealand has, if not the highest, then certainly one of the highest minimum wages in the world.”
A rough calculation showed that meant $160-plus a day for labour costs alone. And most hotels were paying beyond the minimum wage.
“Add into that high construction cost, high compliance costs ... you know, it’s the same reason that buying a house [in New Zealand] is expensive.”
China Travel Service managing director Lisa Li also says some potential Chinese tourists are at risk of being deterred by high on-ground costs in this country, while research out this week shows New Zealanders are more likely to head overseas on holiday now than they were last year.
Doolan said he could understand how Kiwis felt when they went to a country with a lower cost base.
“It’s a challenge in New Zealand. In those other places, you go away on holiday in Bali and you pay the same as what you pay in Palmerston North [and] you have five people running around after you.”
Travellers perceived that they were getting better value in Bali, and there was also the phenomenon of Kiwis being prepared to pay more overseas than they were at home.
For decades, Dubai has been basing its economy on investment, trade and tourism, and that means it has a lively hotel sector. There are more than 600 hotels listed by the emirate’s government in the city of about 3.5 million.
Dubai has more than 600 hotels. Low season means room rates plunge. Photo / Supplied
Dubai is within a few hours’ flight of major population centres and is linked non-stop to big cities around the world. In the summer months, when the temperature can be 40C-plus and humid, many hotels reduce their rates by about 30 to 40 per cent. And in May, Emirates launched free nights at hotels for premium passengers stopping over.
Doolan said that focus on encouraging and welcoming investment and tourists had created much more competition.
“There’s a radical difference between what you might be paying as a punter grabs [a deal] and what that particular hotel might be averaging over the entire year. It’s really hard to build an accurate picture by looking at one particular week, for one person.”
Doolan said the Fifa Women’s World Cup hadn’t had much impact on hotels this winter, with only the cities where the United States and New Zealand are playing experiencing a boost around the day of the game.
Kiwis remain keen on travel — but it is the overseas holiday that is growing in appeal, and a travel and tourism expert says that means New Zealand businesses need to remain competitive.
Strategic research agency Angus & Associates has been tracking leisure travel intentions in New Zealand and Australia since January 2021.
Managing director Chris Roberts said while a domestic trip was still the more likely choice, a trend towards overseas holidays that had been evident for the past year picked up speed in the latest quarter, from March to June.
Almost three out of every 10 New Zealanders surveyed say they are intending to travel overseas for leisure reasons in the next six months.
“With the world now fully open to travel, New Zealand tourism operators will be in a very competitive market.”
He said New Zealand was a premium destination. It was not cheap to get here from most markets and it was not cheap to be a visitor here and enjoy our world-class attractions and activities.
“To maintain our position on the global stage as a premium destination, to successfully deliver to the domestic market, and to achieve a sustainable tourism industry, New Zealand needs to compete on value — not price.”
Grant Bradley has been working at the Herald since 1993. He is the Business Herald’s deputy editor and covers aviation and tourism.
