Some Vintage Weekend visitors have been forced to find accommodation in Palmerston North, trust chairman Bruce Jellyman says. Photo / Lewis Gardner
Some Vintage Weekend visitors have been forced to find accommodation in Palmerston North, trust chairman Bruce Jellyman says. Photo / Lewis Gardner
A feasibility report has revealed the "latent need" for a new hotel in Whanganui.
The report, commissioned by Whanganui & Partners, concluded a four-star full-service hotel of 60 rooms was the optimal financially viable development.
With a population of almost 50,000, Whanganui was most directly comparable with Whangārei, Nelson and Invercargill,the report by Horwath HTL Limited said.
According to the latest Accommodation Survey (2019), Invercargill had 236 hotel rooms, Nelson had 287 rooms and Whangārei had 264 rooms.
A planned Novotel hotel would boost Whangārei's total to 394 rooms.
"We get money that we've got to spend on PR out of town to try to attract those visitors but what we have to resort to a whole lot is to try and get Whanganui people to invite friends and family, as opposed to saying 'Hey, come and stay in this accommodation'.
"It's always been the case but it's worse now than it was five years ago, by a big margin."
The report said there had been a reduction in the number of commercial accommodation properties in the Whanganui market over the past 10–15 years, with the loss of approximately 150 rooms.
The most significant losses were the Quality Inn Collegiate / Econo Lodge (around 60 rooms) and the Midtown Motor Inn (32 rooms).
No additional Whanganui hotel supply was in the pipeline and it was not expected in the foreseeable future.
Whanganui & Partners chief executive Hannah Middleton said there had been early interest in the study from a local group of investors, who ultimately decided to focus on other projects.
"More recently, we've been in dialogue with three real estate/property development businesses.
The study has been shared with interested development parties as well as the Whanganui District Council, which Whanganui & Partners was working with closely, Middleton said.
"We encourage any other interested parties to get in touch with us."
She said she was confident one or more businesses would recognise the market opportunity in Whanganui.
"As well as a new hotel/s there's also the potential for smaller, boutique-style hotel accommodation.
"This particular industry is one where the window for financial return is longer and therefore it's one where it is more likely to take time in turning interest into firm commitment.
"We've seen improving occupancy rates as we've moved through 2022 and it bodes well for the ongoing demand we're seeing from visitors."
Some Vintage Weekend visitors had been forced to stay in Palmerston North, Jellyman said.
"I would absolutely be in support of a new hotel.
"The chances of growing the local [Vintage Weekend] participation is lower and produces less income so we want to be attracting visitation.
"We also need to have somewhere they can stay."
As of August 2021, there were 16 motels in Whanganui with a combined inventory of 294 rooms, the report said.
For the 13 months from June 2020 to June 2021, motel accommodation achieved an average occupancy rate of 78 per cent, compared to 54 per cent from June 2018 to June 2019.
"The increase is mainly as a result of reduced motel supply and also an increase in domestic leisure travel in New Zealand post-Covid-19," the report said.
The extent of private accommodation also had to be taken into account.
"A good example of this, which has gained significant increases in both demand and supply in recent years, is Airbnb.
"The data shows that, since 2017, the available Airbnb inventory in 'entire place' listings [ie excluding private rooms in larger homes] has nearly doubled."
The former Midtown Motor Inn site is now Compass housing. Photo / Bevan Conley
Whanganui mayor Andrew Tripe said the idea of a new hotel had been talked about for a number of years but it never landed.
"I'm in a position now where I'm pretty serious about bringing it to the table.
"It's vital we have an alternative option that compliments our current accommodation providers.
"At there moment there is no four-star option, which would cater to higher-spend visitors in tourism and business."
Tripe said he didn't believe a new hotel would jeopardise current accommodation providers.
"Our inventory is about half that of similarly sized cities, yet we are an attractive tourism option.
"Whanganui's business and corporate sector is going to increase as well. They will be looking for another [accommodation] option.
"Even if we push the button on this now, it's going to take a while for the consenting process and decisions around the building of it. We need to get on with this as quickly as possible."
The council would need to think responsibly about how to attract hotel developers to Whanganui, Tripe said.
A new hotel couldn't come at a cost to the ratepayer.
"I would like to think a hotel chain would be attracted by the opportunity that presents itself here. They would basically have a monopoly on the four-star option.
"They would obviously need to follow all the required processes but we need to make it easy for them to do business with us."
