Occupancy well below pre-Covid, ADR flatlines in mixed year for hotels – CBRE

4th March 2025 By Paul Yandall | paul@propertyticker.co.nz | @propertyticker

The slowdown in the recovery of international visitor numbers and tougher economic conditions dragged performance across New Zealand’s hotel markets in 2024, says CBRE.

In its latest New Zealand Hotels report, the agent said new room supply meant occupancy across last year in New Zealand averaged 66.9%, down from 68.1% in 2023 and 77.8% in pre-Covid 2019.

“Hotel supply is 11% above calendar year 2019 and demand growth has slowed resulting in occupancy rates some 14% below calendar year 2019,” CBRE said.

“ADR’s have flatlined at 19% above 2019 and RevPAR is 2% above.”

While international visitor numbers in 2024 were 12% above 2023, they were still around 15% below 2019, with weakness seen in most overseas markets.

“Chinese visitors have shown the strongest growth in the 12 months to December 2024 to be 64% above 2023 yet still 39% below 2019 levels,” CBRE said. 

“Nationwide monthly occupancy levels were predominantly lower than in 2023, however, have started to improve entering the 2024/2025 summer.”

The country’s largest hotel market, Auckland, was impacted by significant supply increases which, combined with a weak winter period, saw occupancy rates decline from 69.6% in 2023 to 65.4% in 2024. ADR also fell by 5.5%.

“Demand in Rotorua continues to recover gradually however key source markets such as China being considerably lower than pre-Covid levels,” CBRE said.

“Wellington ADR’s declined by 7.2% with the change in government and subsequent spending cuts impacting this market despite growth in international spend.”

However, the southern markets fared much better, with Christchurch seeing growth in demand of 7.8% last year and ADR improving by 2.9% to $201, compared to 2023. 

Te Pae Christchurch Convention Centre was “a key demand driver” for the city’s hotels, helping to improve RevPAR by 7.7%.

“Queenstown continues to perform well with strong demand growth from international visitors,” CBRE said. 

“Queenstown International Airport recorded a 10% increase in international arrivals in 2024. Hotels experienced a 12.1% increase in RevPAR due to growth in both occupancy and ADR.”

CBRE’s latest New Zealand Hotels report can be read here.