Exports

Not much room at the inn

Wednesday September 06, 2017 Mark Cox

In the last year or two, some people connected to the tourism industry have talked about how high the activity levels seen in the summer months have extended into the spring and autumn months.  They talk about the shoulder season extending.

 

But this is only partly correct.  The spring and autumn months are busier than they were, but so are all months of the year – at least according to Statistics New Zealand’s Accommodation Survey.

 

The Accommodation Survey is monthly and it measures the number of nights domestic and international visitors spend in different types of commercial accommodation (i.e. hotels, motels, backpackers and holiday parks).  It also records accommodation occupancy rates, i.e. how full the accommodation is.

 

The graph below shows month by month occupancy rates, for all types of accommodation covered by the Survey, for the year ending June 2017.  It also shows the equivalent occupancy rates for five, ten and fifteen years previously.  It indicates that, measured across the whole year, occupancy rates were broadly the same in 2001/02, 2006/07 and 2011/12. But it also reveals that occupancy rates were significantly higher in every month of 2016/17.

 

In fact, averaged across the whole year, the occupancy rate in 2016/17 was 44.4%, compared with 36.5% in 2011/12, 38.2% in 2006/07, and 35.6% in 2001/02.

 

graph 4

 

Looking at the average occupancy rates for the different types of accommodation, shown in the table below, Backpacker establishments were less busy in 2016/17 than they were in 2001/02, but the other three types of accommodation were all significantly busier.  The table also indicates that 2011/12 was a relatively poor year, but that is probably because the economy was still recovering from the Global Financial Crisis at the time.

 

graph 03

 

The greatest increase in occupancy rates has been in Hotels, and the dramatic scale of the increase is illustrated in graph below.  Especially for Hotels, the shoulder season hasn’t extended; they are much busier all of the time. 

 

graph 04

 

To put the increase in hotel occupancy rates into context, the total number of guest nights in Hotels in New Zealand in 2016/17 was 13,741,841, which was 3,095,640 more than in 2011/12.  This equates to 8,481 extra guests every night of the year.  Assuming an average of 1.5 guests per room, this translates to 5,654 extra occupied rooms. A typical large hotel has around 200 rooms, so these 5,654 extra occupied rooms are the equivalent of an extra 28 large hotels permanently full to capacity.   

 

These numbers sound great.  The Hotels sector is now operating at 70% or more capacity from November to April; and this must be largely because New Zealand is attracting more international visitors.  However, at the same time, the sort of hotel occupancy levels we have been witnessing recently ought to be ringing alarm bells.  It must be getting increasingly difficult for high spending visitors to find the accommodation they want, when they want it.  And, if this continues, they will cease coming - and the growth of the New Zealand tourism industry could grind to a halt.