Dunedin hotels coped better than expected over the last 12 months: NZHC

10/03/10

Dunedin hotels have come through a difficult and challenging year and are well placed to improve performance in a changing operating environment.

Speaking at the 2009 Annual Operating Survey* presentation in Dunedin this morning, New Zealand Hotel Council’s (NZHC) independent chair Jennie Langley said hotels throughout the country were challenged by fewer international arrivals and increasing numbers of visitors booking at the last minute. They also had to cope with the outbreak of Swine Flu and subsequent cancellations of core group and tour business.

In 2009 Dunedin hotels:

• achieved the fourth highest annual occupancy rate of all NZHC members of 63.7%
• had an average room rate of $119.80 compared to national average of $130.10
• average room rate equated to a 1.6% reduction on 2008, compared to a national average drop of 5.7%

The 2009 survey highlighted the importance of domestic and Australian visitors who buffered the industry from the significant reduction in some key long haul markets. New Zealanders accounted for 59.8% of all rooms sold in Dunedin last year, followed by Australians at 19.8%.

Langley said Dunedin hotels were largely dependent on independent and leisure travellers, followed by corporate guests then tours and groups.

“Overall this is a useful ‘portfolio’ dominated by domestic and Australian visitors. However, any reduction in these sectors exposes this region in a downturn.”

Dunedin’s 5 NZHC members generated $20 million in revenue in 2009 from a total of nearly 500 rooms and employed 300 people.

Members contributed $11 m to the region through wages & salaries, food & beverage purchases, rates and other expenditure.

“In spite of CPI and minimum wage increases in 2009, hotels managed to contain, or in some cases slightly reduce, operating costs. This effort, combined with a reorientation of marketing initiatives and an ongoing commitment to deliver quality product and service to meet ever-increasing visitor expectations, means hotels are well positioned to improve performance as the market picks up.

“For Dunedin members this is essential because with the RWC2011 firmly in their sights and the knowledge of increased competition from new hotels and other commercial accommodation coming in to the market, the next couple of years will have their share of challenges.”