Local Attraction At Virginia Beach|"Christchurch Hotel Rates Outstrip Other Centres"

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By                   :    LIZ MCDONALD

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Local Attraction At Virginia Beach

Christchurch's hotel room rates are the fastest rising in the country, according to new research. Prices for hotel rooms in the city rose 6 per cent in the past year, said the report from real estate firm Colliers. This was double the rate of Auckland and Queenstown, the next fastest rising centres. Average room rates across all hotels in Christchurch grew strongly, rising from $118 in 2009 to $158 last month. Colliers research director Dean Humphries said hotel reopenings in Christchurch meant occupancy rates have decreased since peaking at 86 per cent in 2011 when few establishments remained open, but at 76 per cent occupancy rates are still a close second to Auckland. A number of repaired hotels have re-opened in Christchurch, including the 155-room Novotel Christchurch and the 171-room Rendezvous, while the new 138-room Rydges Latimer Hotel is due to open next month. Humphries said the hotel markets of Christchurch, Auckland and Wellington were all performing well and this was triggering new hotel development in all three cities.

As well, plans for new convention centres in both Christchurch and Queenstown could be the catalyst for a new wave of hotel accommodation in both centres. But broader-based development was unlikely in the short term, the report said. "The country still requires significant growth in room rates before new hotels become a financially viable option in most New Zealand cities." Auckland development was driven by its waterfront regeneration and the proposed new national convention centre. This included a new Sofitel So boutique hotel for Accor Hospitality, due to open in 2015. In Wellington, a 130-room Sofitel is under construction and due to open next year in a redeveloped office tower near parliament buildings. umphries said the number of international arrivals to New Zealand increased just 1 per cent to 2.7 million in the year to August. Despite this small increase, the hotel sector managed a solid improvement in trading performance. This was due to a number of factors including the residential housing boom, general improvement in economic sentiment, one- off events, a change in visitor origin and the cruise ship industry. Auckland's residential boom had seen the sale of inner-city apartments that had been used for short-stay accommodation. Economic sentiment had boosted corporate demand for hotels. The number of Chinese tourists had grown 27 per cent over the past year and they typically stayed in conventional hotel accommodation. Passengers from cruise ships also boosted the hotel sector by booking rooms before or after their journey. Many international visitors were opting to use Auckland as the hub for their New Zealand holiday but the re-opening of hotels in Christchurch could redistribute arrivals to the South Island next year.

Humphries said New Zealand hotel sales were at record low levels as owners were holding on to their investments. However, there was a strong appetite from international and domestic investors chasing attractive returns combined with a strong medium-term performance outlook."New Zealand hotels are currently perceived as being highly affordable when compared with Australia or other hotel markets. "Hotels in key Asian cities are reaching prices of over $1m per hotel room and yields of just 3 to 4 per cent with five-star hotels in Sydney now reaching close to $650,000 per room based on yields of 6 to 7 per cent. "This contrasts with New Zealand, where hotels are generally priced at between $150,000 to more than $350,000 per room with yields of 7.5 to 10 per cent," he said.

Source:stuff.co.nz/the-press/news/canterbury/9314845/Christchurch-hotel-rates-outstrip-other-centres