Photo: 123RF
Investment in hotels is expected to increase with transactions projected to exceed $250 million over 2024, as demand for quality accommodation continues to increase.
Research by property management firm JLL said there had been a strong increase in bookings as international tourist numbers edge closer to pre-Covid levels -- reaching 76 percent of pre-pandemic levels last year.
"Current global geopolitical issues will likely favour travellers wanting to visit safe destinations like New Zealand, " JLL senior vice president Nick Thompson said.
"At the same time, the reopening of China's borders, an increase in flights to New Zealand, an attractive New Zealand dollar, and events such as the World Hockey Masters in November, are all expected to drive visitor numbers and hotel occupancy."
He said there had been substantial increase in new hotel supply over the past five years, but that cycle was beginning to slow.
"This slowdown is advantageous for the market as it allows for a quick absorption of new quality product."
However, he said much of the construction activity was being redirected towards refurbishment and conversion projects, rather than new developments, given the high cost of new developments.
"One of the key trends we've seen because of the pandemic is a shift in operator and brand loyalty," he said.
"Guests were wanting to try new hotels they'd never stayed at and displayed a willingness to pay for better quality products."
He said that demand was reflected in hotels openings since 202 with nearly two thirds (64 percent of total rooms being in the mid-scale to upscale segment and the balance (36 percent) in the upper-upscale to luxury end of the market.