Friday, February 11, 2011

Hotel Sector Continues To Dominate

The latest accommodation survey results for December 2010 were released yesterday by Statistics New Zealand and further underlines a worrying trend for the motel industry. 

While total guest nights in December 2010 decreased by 2.4 percent compared with December 2009, it is noted that the hotel sector still managed a gain in guest nights for the 13th consecutive month (see below). 

In the battle of the two islands, the North Island recorded a 1.1 percent decrease in guest nights while the South Island achieved a 4 percent decrease in December 2010 compared to December 2009. 

Ten out of the 12 regions had fewer guest nights in December 2010 than in December 2009. 

The only regions recording increases were:
  • Auckland, up 5.0 percent
  • Wellington, up 3.4 percent.
The regions recording the largest decreases were:
  • Bay of Plenty, down 27,000 (7.8 percent)
  • Canterbury, down 18,000 (3.5 percent) 
  • West Coast, down 15,000 (11.1 percent).
Interestingly the Canterbury earthquake and subsequent aftershocks have been blamed for all South Island regions recording guest night decreases in December. The decrease in the South Island accounted for three-quarters of the national decrease in guest nights.

International visitor guest nights across New Zealand in December 2010 decreased by 5.6 percent compared with December 2009. While overseas arrivals actually increased in December the disappointing decrease in guest nights were due to shorter stays.

It was good to see another rise (if only modest) increase of 0.3 percent in domestic guest nights for December 2010 compared with December 2009. 

The hotel sector's stellar performance continues with an increase of 2.9 percent increase in guest nights in December 2010 compared to December 2009. 

All other accommodation types in the survey recorded decreases in December 2010:
  • Motels, down 4.8 percent
  • Holiday parks, down 4.9 percent 
  • Backpackers, down 3.4 percent.
Hotels achieved the highest occupancy rate (54.1 percent) of all the accommodation types in December 2010, followed by backpackers (46.5 percent) and motels (46.3 percent).

While there are pockets of strong motel businesses, the worrying trend of the motel sector bleeding market share continues. 

We are extremely nervous about what guest night results will be released for January. This a critical month where the majority of accommodation operators fill their tanks and set themselves up for the year ahead. Unfortunately we sense that our fickle domestic market were spooked over the January school holiday period with many putting-off their usual travel plans.

Another campaign is needed to encourage Kiwis to hit the road again and in particular not to defer domestic travel - particularly over the Rugby world Cup!

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