Covid drove Queenstown hotel occupancies to an average of only 33 per cent in the year to March and room rates fell steeply.
But Auckland hotels had New Zealand's highest occupancy rates, says Colliers International.
Dean Humphries, hotel national director, said Covid hit at a time when hundreds ofnew hotels were being built.
By last month, Auckland had New Zealand's highest annual occupancy of 50 per cent, he said.
Christchurch had 48.3 per cent, Wellington 45.7 per cent and Queenstown was hardest hit, recording the lowest annual occupancy of just 33 per cent, he said.
Hundreds of hotel rooms are being occupied as managed isolation facilities but other hotel rooms are being occupied by domestic tourists.
Humphries said the average daily dollar rate varied widely.
Rotorua room rates rose 15.4 per cent to sit at $162/night. Christchurch rates were unchanged from pre-Covid levels at $158/night. Auckland average room rates fell 8 per cent to $178/night. Wellington average rates fell 16.5 per cent to $149/night and Queenstown average rates fell 27.9 per cent to $179/night.
Despite our borders being closed, a record 1447 new hotel rooms were completed in the 12 months to March.
A further 2359 rooms are under construction, which Humphries said was a legacy of the pre-Covid tourism boom.
About 70 per cent of the rooms under construction are in Auckland.
In January, Tourism Industry Aotearoa chief executive Chris Roberts said a survey found plummeting occupancies.
"Nationally, average hotel occupancy had sat at around 80 per cent since 2016, until the Covid-19 pandemic hit and our borders were closed. Average occupancy in 2020 barely made it to 50 per cent. The average rate for a hotel room also slipped, and these combined factors resulted in a 40 per cent fall in the average revenue per available room to just $91.17.
"At those revenue levels, the majority of hotels which remained open in 2020 were operating at a loss," Roberts said.
Last July, Humphries said about 6000 hotel rooms were stayed in by quarantiners.
The country was witnessing a significant rise in the number of returning New Zealand citizens and residents, all subject to a 14-day mandatory isolation period in an approved hotel facility, he noted then.
"This is providing welcomed demand for a growing number of hotels across the country," he said.
The new Hotel Britomart in Auckland's CBD near the waterfront. Photo / supplied
Nearly 40 per cent of Auckland hotel rooms were being used for mandatory isolation, he said.
Auckland has 10,400 hotel rooms so about 4000 were for quarantine, he estimated.
The Herald reported today how Cordis Auckland had an immediate spike in bookings from Australia since the two-way bubble announcement.
A group representing hotel owners also said bookings are building "nicely" into May and June. Airlines report a surge in transtasman inquiry and bookings but economists say the impact on the wider tourism sector may be limited.
Cordis Auckland said the quarantine-free bubble with Australia, now less than a week away, was a lifeline for the hotel sector and the wider tourism industry in general.
Australians made up to 38 per cent of guests pre-pandemic and Cordis' managing director Franz Mascarenhas said the booking trend was good.
