Over 550 key hotel executives, owners and suppliers were in attendance for the third annual AHICE Aotearoa, which took place in Christchurch for the first time, at the Te Pae Convention Centre.
In his opening address, AHICE Group President James Wilkinson, highlighted the economic impact of the event on the city.
“We’re very proud of the economic contribution to the city that this event will have,” he said.
“We’re estimating that NZ$600,000 are being spent this week by people attending AHICE Aotearoa, and I think that’s exactly the boost Christchurch needs.”
Over two days, hoteliers, real estate experts and took to the stage to share business updates and insights into the local market.
STR Regional Director, Matthew Burke, set the scene with a detailed presentation on the New Zealand market.
The presentation showed New Zealand’s tourism industry is grappling with a stalled recovery in 2024 with RevPAR YTD August -3.8%, primarily due to a combination of increased supply (+2.7%) and softening demand (+1.4%).
Winter has been particularly challenging for the market with August down 17% in RevPAR compared to the year prior, when the FIFA Women’s World Cup of 2023 was in action.
“While supply growth is expected to moderate over time, the industry’s immediate challenge lies in stimulating additional demand,” said Burke.
“All tourism segments will need to surpass pre-pandemic levels to absorb the increased supply in the market.
“Queenstown and Christchurch have outperformed North Island centres, with Auckland experiencing the most significant impact of additional supply and why occupancy is 18% behind 2019.
“While average rates have risen in recent years, they are showing signs of weakening amid softening demand.
“Events and experiences, such as the FIFA Women’s World Cup 2023 and World Choir Games 2024, have played a crucial role in supporting demand, particularly during winter. Auckland can get excited for Pearl Jam and Coldplay in November with occupancy on the books already in the high 70’s across each performance night.
“Future occupancy booked across New Zealand is approaching back to 2023 levels and the important October-November and Q1 demand pacing on par to same time prior year.”
Minister’s address
New Zealand Minister for Tourism and Hospitality, the Hon. Matt Doocey, joined the conference via video link and answered some questions from delegates.
The Minister highlighted the importance of international visitor to New Zealand’s economy.
“The latest International Visitor survey results show that in quarter two for 2024, 34% of international visitors stayed in the hotel at some point during their travel in New Zealand,” he said.
“This is the highest accommodation type after staying with family and friends. So, it’s critical infrastructure for our international visitors.
“The same survey also reported 3.21 million international visitors arriving to New Zealand for the year ending June 2024, up 27% from the previous year and reaching 83% of 2019 tourism levels.
“Australia made up the majority of international visitors arriving to New Zealand. For the year ending June 2024, international tourism contributed NZ$11.6 billion to New Zealand’s economy – this is about 85% of international visitors spend for the same period in 2019, up from 80% for year end March 2024.”
The Minister also referenced the recently-announced increase to the International Visitor Levy.
“Earlier this month, I announced, along with the Minister for Conservation, the Hon Tama Potaka, an increase to the International Visitor Levy, the IVL, to NZ$100.
“[This] received wide public support, but I recognise the concerns from the industry around this decision.
“We considered many factors when making the decision, and ultimately believe that NZ$100 best balances the various factors with the need to address the costs of tourism in our communities.
“I do not consider that this increase to the IVL will have a significant impact on demand from international visitors. This decision will support a sustainable growth in tourism, and it is appropriate that international visitors contribute more towards the world class public services they use and the high-quality visitor experiences they have while in New Zealand.”
‘Tale of two islands’
Hoteliers that took to the stage, cited a ‘tale of two islands’, referencing the challenges of oversupply in the Auckland hotel market, and eagerly anticipating the arrival of the new convention centre, which is expected to bring a boost to business travel.
South Island growth was a hot topic with talk of increasing leisure and corporate demand. Christchurch, in particular, is expected to be a hot market for development, along with Wellington, Queenstown and secondary cities.
While the South Island poses additional development challenges, given stringent building regulations, owners and operators are not shying away from this market.
Russell Group Managing Director, Brett Russell, spoke to several recent conversion projects including under the Four Points by Sheraton, QT and Adina brands, as well as the iconic Noahs/Rydges Hotel in Christchurch which was devastated in the 2011 earthquake and has remained derelict since.
“These days, a new-build hotel is pretty tough work to make it stack up with the numbers,” he said.
“In Christchurch, we had the opportunity to grab an existing building, that’s got a lot of good history, and we’re bringing it back to life, which we’re pretty excited about.
“We’re going to give it a new facade and a rooftop bar and tidy up the exterior and connect it to the footpath with some alfresco dining.”
In a Hotelier Q&A with James Wilkinson, TFE Hotels Chief Executive Officer, Antony Ritch, announced the signing of a multi-property management agreement with New Zealand’s Heritage Hotels which spans both islands.
Under the partnership, half of the Heritage portfolio will be refurbished and rebranded under the Adina and Rendezvous brands.
“We’ve just finalised our partnership with Heritage Hotels in in New Zealand,” said Ritch.
“Heritage will maintain ownership over their portfolio and TFE will become the manager of the five Heritage Hotels throughout New Zealand, including the wonderful Heritage Christchurch just next to the cathedral.
“It will also see the reintroduction of the Rendezvous brand to New Zealand, which will be great.
“It will be the Rendezvous Heritage Christchurch as well as Auckland and the beautiful property in Queenstown that sits just up the hill on Fern Hill Road there, with magnificent conferencing and wedding spaces throughout there as well.”
Threat of APTR
Hotel Council Aotearoa Chair Lani Hagaman, spoke to some of the challenges the hotel sector is facing in New Zealand, particularly the importance of pushing back on The Accommodation Providers Targeted Rate (APTR), describing it as ‘the world’s worst tourism tax’.
“While we continue to seek greater collaboration from local councils, who understandably want to share in the upside of tourism in their regions, we are very aware of a number of councils around the country that want to introduce or bring back this targeted rate,” she said.
“That would be nothing short of a disaster for our industry. That targeted rate will cost you 20 times the cost of your annual membership fee with HCA.
“We want and we need a funding structure that makes good sense for all of our sector and for our communities, one that allows central and local governments to be able to plan with confidence and invest in the infrastructure that our visitors use. Even though for three years we have said we are prepared to work on better solutions, we now have councils pushing for further taxes and Auckland threatening to bring back the APTR.
“We can see we have a coalition government that is trying to reform this lack of infrastructure funding, but if we are not careful, if we do not stand up for our industry and if some of us break ranks and agree to this crazy idea, we will be played off against each other.
“This targeted rate issue is moving fast and in good speed. We need you to be members so that we can communicate with you, and we can get these things sorted once and for all. Our ultimate goal is to have an infrastructure funding mechanism that works for the entire country, not just some regions that want to bully us and to accept acceptance.
“If we are going to reform tourism funding, let’s do it once and for goodness sake, let’s do it properly.”
Leadership lessons
Former All Blacks captain Kieran Read captivated delegates in a keynote presentation on Thursday afternoon.
“Across my career, I learned a lot of awesome things about resilience and dealing with adversity,” Read said.
“One is ensuring that you have a great mindset to what’s coming your way. With a ‘growth mindset’, you’re embracing challenge; with a ‘fixed mindset’, if there’s a big challenge, I’ll just walk away, I don’t want to do it, because I don’t want to fail. So, we’re not going to grow in that space.
“It’s the same thing with setbacks. If you want to master something, a growth mindset is: ‘I can work at it’; ‘my work ethic is going to lead me to mastery’. Someone with a fixed mindset probably thinks, ‘if I’ve got the talent, I can do it. If I don’t, I’m not going to be able to get myself to that level’.
For more information on AHICE Aotearoa, click here. Image gallery to follow.