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There appeared to be a competition amongst hoteliers attending the conference as to who was the hardest hit by the recession and global economic downturn. Funnily enough the concerns reported by the media were from the main areas populated by hotels: Queenstown, Rotorua and Christchurch.
It would appear that Rotorua hoteliers were able to win the unenviable kudos of being worst hit of all.
Interestingly, the downturn in demand in Christchurch and Queenstown was largely attributed to either newly built hotels or soon-to-be-completed hotels coming on board. It is claimed that Rotorua had much bigger issues as it was simply suffering from a lack of visitors.
It was reported that Rotorua's downturn has stemmed from their reliance and the subsequent downturn in the tour markets from Asia. The steady decline in the Asian markets has been occurring well before the recession and swine flu hit. By comparison, Queenstown is more exposed to fully independent travellers.
It was claimed that Rotorua's room rates had always been low compared with other markets. But even in the past few years when others had enjoyed growth, Rotorua had missed out.
Rotorua's market does not have a corporate base and is is exposed to the leisure market. From a hotel industry perspective, it is viewed that Rotorua has a lot more motels than other cities to cater for the domestic market.
Like many other tourism operators, Rotorua appears to be looking towards the Australian market to provide some positive flows. The Rotorua airport is currently being upgraded and with completion expected in July, the city is in talks with the airlines to try to attract a trans-tasman carrier. It is hoped by the end of this year or the start of next that trans-tasman flights will start.
Hotel occupancy rates in Rotorua have fallen from 81 per cent in 2004 to 70 per cent in 2005 and most recently to 66 per cent. Room rates are the same as they were in 2004.
