In the mighty spirit of ’80s metal songs, this post features two slightly different parts separated by a slash symbol. It’s partly a monthly “development update” post, and partly a sequel to a post from 18 months ago about the tourism boom.
So let’s take a look at the “development” side of tourism first. First up, a graph showing how Auckland’s hotel and motel capacity has grown over the last 20 years:
Auckland’s hotel supply grew from about 4,500 rooms in 1996 to 8,500 by 2007, and has hovered around 9,000 rooms more recently. Motel rooms have actually been declining, as motels are gradually being converted to higher-density housing, and there are around 3,500 rooms left. The general trend is for accommodation to become more concentrated in the city centre – old suburban motels just aren’t as attractive as they used to be.
So, there are 12,500 rooms at present, excluding things like backpackers, hostels and other short-term accommodation which is less ‘tourist focused’. Long story short, Auckland’s accommodation supply has changed very little for the last ten years, whereas it grew hugely in the ten years before that.
The RCG Development Tracker shows a large number of hotels which are planned, under construction or recently completed. Focusing just on those in Auckland, and ignoring the ones where construction hasn’t begun, there’s:
- Quest on Hobson (44 rooms), completed in Q3 2012
- Quest Beaumont (34 rooms), completed in Q4 2013
- VR Queen Street (80 rooms), completed in Q2 2014
- Ramada Suites Federal Street (42 rooms), completed in Q4 2015
- Adina Apartment Hotel Auckland (159 rooms), completed in Q4 2015
- Swiss-Belsuites Victoria Park (40 rooms), completed in Q4 2016
- MSocial Auckland (190 rooms), the former Copthorne which closed in Q3 2015, being substantially refurbished and due to finish in Q3 2017
- Four Points By Sheraton Auckland (255 rooms), being built and due to finish in Q4 2017
- Sofitel So Hotel (133 rooms), being built very slowly, and due to finish in Q1 2018
- Park Hyatt Auckland (195 rooms), being built and due to finish in Q3 2018
- A hotel in the New Zealand International Convention Centre (313 rooms), being built and due to finish in Q2 2019
Outside of the city centre, the 38-room Quest Albany opened in 2012, the 62-room Quest Highbrook opened in 2013, the 66-room Ramada Suites Albany opened last month, the Sebel Auckland Manukau is being built and due to finish in Q3 2017. There have also been a couple of extensions to hotels out at the airport, with Hotel ibis budget Auckland Airport and Jet Park Airport Hotel having added 133 rooms between them.
So, there’s quite a few different hotel projects, but most of them have been quite small scale, especially those that have been completed so far. The Adina was the first large-ish one to be completed, and we’ve got a few more to come in the next year or two. This will take us over 10,000 hotel rooms, but this milestone has been a while coming.
As such, Auckland’s tourism sector will struggle to maintain its growth, because there’s not much new accommodation being built, and the existing providers are running at record occupancy levels – 87% for major hotels, meaning that in the last year only 13% of rooms were empty on an average night.
Tourism Boom Part 2: The Plateau
In late 2015, I wrote about the huge tourism boom NZ was going through: “essentially, the tourism sector has gone from barely keeping pace with inflation in the post-GFC period, to now be growing massively”.
We’re now at what I’d call a very high plateau, where tourism is still very strong but growth has levelled out, in large part because many tourism businesses are reaching capacity. Growing capacity can take time, most obviously for things like accommodation which can take at least a couple of years to build.
Based on the most up-to-date data, international tourists are spending $10 billion a year in New Zealand. That excludes things like international airfares and international education, which is a big industry in itself (here’s an earlier post on it).
Another graph I like is this one, which shows the average number of visitors in New Zealand on a given day:
On an average day in the last year, there were 180,000 visitors in New Zealand to go with our 4.7 million residents, although the numbers fluctuated between 120,000 last winter and 280,000 in January. The figures just keep climbing, and show no signs of slowing down (yet).