Hotel room rates in New Zealand went up nearly 8 per cent last year contributing to a bumper year for hoteliers.
Hotels enjoyed a record-breaking year in 2015, increasing yield and productivity, according to latest Tourism Industry Association statistics.
The association's hotel sector members recorded a national average occupancy rate of 79 per cent up 3 points on 2014 and the highest level in at least five years.
Association chief executive Chris Roberts said returns were also improving, which is needed to encourage investment and refurbishment.
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The average room rate across all star grades was $157 (up $12 on 2014). Combined with the improved occupancy rate, this pushed the average revenue per available room (RevPar) up by $14 or 13 per cent to $124.
"Hotel revenues in New Zealand are still below what is being achieved in Australia and high land and construction costs in New Zealand remain a barrier. But the upward trend is encouraging," Roberts said.
TIA has identified infrastructure investment as a priority and is working with the government to identify opportunities and remove roadblocks.
"To meet the goals of Tourism 2025, it is essential that we encourage investment to improve the quality of current infrastructure to meet rising visitor expectations, as well as creating a positive environment for investment in new facilities," he said.
"The tourism industry set itself a big goal with the Tourism 2025 growth framework - an industry worth $41 billion by 2025 - but as we head into 2016, it looks very achievable, Roberts said.
Last June the country passed the 3 million visitor a year mark for the first time in and in the year ending September total spend by overseas visitors was $9.4 billion. In 2014, domestic tourism was valued at $13.4 billion,
TIA's hotel sector represents almost 140 members throughout New Zealand, including international chain, large independent and privately owned hotels. TIA hotel sector members employ 10,500 staff nationally, with annual revenues of more than $1.05 billion.