International visitor arrival numbers are on the rise and the outlook is promising for New Zealand’s tourism sector.

Bayleys’ hotels, tourism & lesure (HTL) team notched up some outstanding results in the last financial year, and gazing ahead, the market looks ripe for activity off the back of a slightly softer last three months reflecting both seasonality and the leadup to the general election.

Stock is tight, and interest rates look sticky for the foreseeable future, however, with the help of specialist and proactive tourism finance brokers, finance is being attained and deals are being concluded.

Freehold going-concern commercial accommodation businesses are getting attractive returns of around 10 percent, while motel and management rights businesses are providing higher returns and giving people a lifestyle and decent income.

Occupancy for motels is at an all-time high, and while there’s still a nationwide lack of motel room inventory given continued contracted emergency housing arrangements, some recalibration is happening in places like Rotorua.

Hotel stock remains very tightly held, with only one sale nationwide across all agencies in the last six months – in a deal brokered by Bayleys.

Nugget Point Hotel, Queenstown was sold to an experienced Singapore-based entity with plans to upgrade the hotel.

Market fundamentals are strong for investment in the HTL sector, with data showing significantly increased overseas visitor arrival numbers in the last 12 months with ongoing interest from the Australian, US and UK markets and the staged return of the Chinese market, underpinning these figures.

Hotel Data New Zealand says RevPAR for the first six months of this year has returned to pre-pandemic levels, driven by a strong increase in ADR, and meanwhile, our total national hotel room supply increased by around 15 percent since June 2019.

Occupancy rates across all accommodation types have increased as corporate business and international tourists return, with the hotel sector getting a real winter boost from the FIFA Women’s World Cup.

Tourism New Zealand's new No Place Like It On Earth marketing campaign featuring Academy Award winner Taika Waiti will roll out via streaming service HBO Max and other portals and hopes to get cut-through in the hot global tourist market.

Time will tell if various election promises, including more money for the tourism economy and working visa extensions for those in hospitality or tourism-related jobs come to fruition, but we’re forging ahead and see opportunity everywhere.

HTL is an exciting sector to be part of and we look forward to talking with you soon.

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