Report

New Zealand Hotels & Chains Report 2023

The 2023 edition of the New Zealand Hotels & Chains Report offers a detailed analysis of the hospitality sector in New Zealand, focusing on the performance, distribution, and future development of hotel chains across the country.

Drawing on data from New Zealand’s accommodation programmes (ADP and HDNZ), as well as from STR and our database, Horwath HTL presents this overview of 662 New Zealand accommodation properties, including hotels, serviced apartments, lodges and other boutique accommodation comprising almost 42,000 guest rooms.

The most comprehensive data set reporting on the country’s occupancies and Average Daily Rates (ADR) is from Hotel Data New Zealand (HDNZ), which includes circa 24,874 rooms across 214 of the country’s major hotels and serviced apartments, or 61% of the room supply within its category.

Key Performance Indicators

Recovery Trends: New Zealand’s hotel industry has experienced a better-than-expected recovery in 2023, with international visitor arrivals reaching 72% of pre-COVID levels. Revenue Per Available Room (RevPAR) has returned to pre-pandemic levels, primarily driven by a significant increase in Average Daily Rates (ADR).

Domestic Demand: Despite a 15% increase in room supply since 2019, domestic demand has remained strong, accounting for a significant portion of hotel occupancy.

Market Distribution

Size of Establishments:

56% of New Zealand’s hotels have fewer than 50 rooms, with smaller properties dominating the market. Chain hotels, however, represent 39% of properties but account for 66% of the total room supply, emphasizing their larger average size of 105 rooms compared to 36 rooms for independent hotels.

Boutique and lodge accommodations, while only a small part of the market, play a critical role in New Zealand’s luxury tourism sector.

Scale and Distribution:

Branded hotels are concentrated in major cities and tourist destinations, with 71% of these properties located in Auckland, Christchurch, Wellington, Queenstown, and Rotorua. Auckland alone holds 34% of the country’s room supply.

Upscale brands dominate the branded hotel inventory, making up 51% of branded properties and rooms. In contrast, independent properties tend to be midscale or upper midscale, accounting for 53% of properties and 69% of rooms in these categories.

Top Brands and Chains

Accor: Leads the market with 43 hotels and 5,641 rooms, making it the largest hotel chain in New Zealand.

Quest: Tops the brand rankings with 40 properties and 1,845 rooms, highlighting the strong presence of apartment-style accommodations.

IHG, Wyndham, and Sudima: Have been significant contributors to new room supply since 2019, with IHG adding 904 rooms, Wyndham 616 rooms, and Sudima 426 rooms.

Pipeline and Future Developments

Growth Projections: The pipeline includes approximately 3,912 rooms across 36 new projects. Notable developments include those by SKYCITY Entertainment Group and Hilton Worldwide, which are adding significant new capacity.

Opportunities: The report identifies opportunities for branding and franchising, particularly in regional areas and smaller properties, as the industry continues to evolve post-pandemic.

The New Zealand hotel industry is poised for continued growth, with strong brand presence and an expanding development pipeline. The focus on upscale and luxury segments, coupled with opportunities for franchising smaller properties, suggests a promising future for the market.