Sweden's Magdalena Eriksson celebrates at the end of a Fifa Women's World Cup quarter-final at Eden Park. The tournament has been a winner for hotels. Photo / AP
Sweden's Magdalena Eriksson celebrates at the end of a Fifa Women's World Cup quarter-final at Eden Park. The tournament has been a winner for hotels. Photo / AP
Hotel room rates were up 35 per cent for July compared to the same month before the pandemic as women’s football teams and fans boosted demand in host cities.
A Horwath HTL report shows average daily rates (ADR) around the country were $226 a night compared to around $192 anight in 2019 and $210 a night last year. In July, Queenstown hotels reported their highest average room rate ever at $334, and four to five-star hotels at $412, 45 per cent above average rates for comparable hotels in Auckland.
Overall, the ADR increased by 9 per cent compared to July 2022 and was 35 per cent above the same period in pre-pandemic 2019.
Howarth, a hotel, tourism and leisure consulting company, says when taking into account increases in room supply since July 2019, it is estimated the number of room nights sold in major hotels in New Zealand was 7 per cent higher than the same month in 2019.
“This is the strongest increase since the pandemic and shows the overall positive impact of the Fifa Women’s World Cup on hotel demand.”
Based on occupancy and ADR growth, Auckland and Dunedin appear to have benefited the most proportionately from the tournament, which kicked off in July and finishes in this country with a semifinal between Spain and Sweden at Eden Park tomorrow.
The six games played in Wellington boosted occupancy and ADR during the last 10 days of the month, with occupancies of 77 per cent reported.
This compensated for a slowdown of Government and business demand compared to earlier in the year. In Hamilton, matches were played mostly on weekdays which were high-demand, Horwath says.
Hotels other than those hosting teams reported being full on game days, with special event rates driving higher ADR. In Auckland, 13 hotels hosted teams, media or officials, which significantly contributed to a market performance which was strong overall.
Auckland hotels not contracted by Fifa indicate there was lower-than-expected demand from supporters and little peak demand during match days. The latter is likely the result of the significant supply additions of the past few years.
Horwath says overall, Auckland demand from the business and meetings markets appears to have held up well. Poor snow conditions in Queenstown during most of the month resulted in hotel occupancies ending up below expectations.
The ski season has been bumpy for hotel operators.
While forward bookings were strong, many hotels missed out on last-minute bookings that typically occur during the ski season.
Horwath estimates the number of room nights sold in hotels increased by about 18 per cent compared to the same period in 2019.
The favoured industry measure is revenue per available room (Revpar - revenue generated per room regardless of whether rooms are occupied or not), and for the main New Zealand hotels in July was 25 per cent up on the same period in 2019 and 27 per cent on July last year, according to data reported by Hotel Data New Zealand (HDNZ). However, hotel Revpar performance over a 12-month period is still lower today than it was four years ago pre-Covid, largely due to the fact hotels are only two-thirds full on average, rather than 80 per cent occupied.
"Meanwhile, hotels are dealing with substantial cost increases during those four years, including labour costs, utilities, rates, insurance and interest costs."
It was also likely that food and beverage and other department profits are lower on a hotel-by-hotel basis than they were pre-Covid due to lower hotel occupancies and reduced outlet opening hours in response to staff shortages.
Figures out today from Stats NZ for June show the June number of overseas visitor arrivals is 84 per cent of the pre-Covid-19 number of 213,500 in June 2019.
The Horwath HTL report carries more up-to-date provisional data from Stats NZ. Around 253,000 non-New Zealand residents arrived in the country during July, an increase of 112,000 compared to the same month last year, but still 14 per cent below the number of arrivals in July 2019.
Visitors from the United States increased substantially with much air capacity, and the matches of the US football team in Auckland and Wellington attracted large numbers of American supporters.
With the start of the country’s school holidays in the first week of July, 248,000 New Zealand citizens left the country, which was 37 per cent more than in July last year but 17 per cent below July 2019.
Grant Bradley has been working at the Herald since 1993. He is the Business Herald’s deputy editor and covers aviation and tourism.
