The Nelson area is one region where hotel occupancy surged. Photo / Supplied
The Nelson area is one region where hotel occupancy surged. Photo / Supplied
The easing of alert level restrictions and opening the border for Kiwis and Australian residents has boosted recovery for hotels.
Occupancy levels increased to 42 per cent in April from 33 per cent in March, according to hospitality consultants Horwath HTL.
But staff shortages are beginning to bite, with somehotels having to turn down bookings during the school holidays.
Drawing on Hotel Data NZ figures, revenue per available room was 50 per cent of its pre-pandemic level in April, a significant improvement on the 28 per cent reported in March.
Results exclude the country's 32 MIQ hotels, most of which have not yet returned to the market, although in Auckland the Grand Mercure - rebranded as a Mövenpick hotel - is one that has re-opened to guests.
Horwath HTL says with the Easter and Anzac Day public holidays only a week apart, many Kiwis took the opportunity of taking extended leave, reducing already-limited business travel even further.
Regional hotels in areas such as Taupo and Hawke's Bay, Nelson/Marlborough and to a lesser extent Rotorua, were the main beneficiaries of the holiday period.
Taupo and Hawke's Bay occupancy was 68 per cent, the highest reported by any region.
With its location between Auckland and Wellington, the region appealed to the country's largest markets for driving holidaymakers, attracting those wanting to enjoy the great outdoors, but not wanting to risk being stuck at their holiday destination if they had to isolate with Covid-19.
The area, and Nelson-Marlborough, also continued to be popular with retirees not bound by school holidays, or not yet confident about travelling overseas.
Taupo hotels are benefitting from being at the centre of the drive market. Photo / Marian Robertson
The firm says many regional areas have had a big fall in the supply of accommodation as the government is using many motels for social housing.
Staff shortages during some peak school holiday days forced some hotels in the Taupo-Hawke's Bay and Rotorua regions to stop accepting bookings, and several hotels had to offer value-adds to guests in exchange for not being able to service their room daily, Horwath HTL says.
Under the country's Covid traffic light system, strict capacity limits on gatherings and events were lifted just before Easter, when the country moved from the red to orange setting.
Gradual border setting changes starting in February, allowing New Zealanders to travel overseas without an isolation requirement on return, while permitting fully-vaccinated visitors from Australia to enter New Zealand without an isolation requirement from April 12.
That worked against New Zealand hotels.
"In the absence of airport passenger data for the full month of April, it seems that fewer Australians have been visiting New Zealand in the past month than the number of Kiwis who have left the country for an extended Easter-Anzac holiday or staying close to home," said Horwath HTL.
Auckland Airport reported a 22 per cent dip in passengers flying in and out of its domestic terminal during the Easter weekend compared to last year.
This was not surprising, noted Horwath HTL, as many people will have already taken the opportunity to explore the country during the past two years and NZ consumer confidence was reported to be at record lows.
The Grant Mercure in Auckland has been rebranded as a Movenpick hotel. Photo / Sylvie Whinray
Queenstown recorded a 22 per cent decline in room nights sold compared to April last year, while the opening of three new hotels increased supply by 8 per cent. Direct flights from Australia are only scheduled from the end of May (Qantas), the beginning of June (Jetstar) and the end of June (Air New Zealand).
"After two years of exclusive access, it appears far fewer Kiwis decided to visit the resort town (again) last month amid concerns about inflation, higher mortgage rates and the risk of having to self-isolate away from home."
On the labour shortage, Horwath HTL says most hotels can't find the staff needed to service their future customers, even when paying the living wage or higher rates. In 2019, approximately 34 per cent of the workforce at major hotels was in New Zealand on a work permit, according to Tourism Industry Aotearoa.
"With most migrant workers having returned to their home country, many New Zealand hospitality workers having found alternative employment and immigration settings further tightened, the future financial performance and service levels of hotels will be even more dependent on their ability to attract and retain the right people."
