Premium market bucks falls as hotels post mixed results – Horwath HTL

18th June 2025 By Paul Yandall | paul@propertyticker.co.nz | @propertyticker

Upmarket accommodation and popular destinations like Queenstown and Rotorua fared the best of New Zealand’s hotel markets in May 2025, according to Horwath HTL.

The consultancy’s latest New Zealand Hotel Performance Focus showed revenue per available room last month averaged $117 across the country, down 4.2% from the same month last year.

Its analysis of Hotel Data New Zealand showed the nationwide decline was driven by a 1.5% drop in occupancy to 61.4% and a 1.8% decrease in the average daily rate to $191.

“This overall softness was again most evident in Auckland and Wellington, which continue to weigh on the national average,” Horwath HTL said.

One notable trend was the performance of premium hotels, with 5-star and luxury hotels reporting relatively strong results.

Auckland’s RevPAR dropped 6.8% year-on-year, but the decline was concentrated in the 3 to 4.5-star segment, while 5-star and luxury hotels bucked that trend, recording a RevPAR increase.

“Room nights sold in Auckland were up 1.9% compared to last year, even as supply expanded by 807 rooms (a 5.8% increase), with 528 of these new rooms in the 5-star category,” Horwath HTL said.

“Despite this influx of new supply, Auckland’s 5-star hotels reported the highest occupancy of any category at 65.6%, up 2.5 percentage points year on year, and achieved a 2.8% RevPAR increase.

“These results suggest that demand is shifting in favour of the 5-star segment, which has nearly doubled in supply over the past six years yet continues to outperform other categories.”

That trend was also seen in Queenstown.

“Year to date, 4.5 to 5-star properties posted a RevPAR growth of 15.4%, more than double the 6.8% growth seen in the 3 to 4-star segment,” the consultancy said.

“In May, despite occupancy levels remaining below 60%, 4.5 to 5-star hotels managed to lift ADR by 7.4%. Over the course of the year, their ADR has climbed 14%, again, more than twice the rate of their midscale counterparts.”

Rotorua had a good May, helped by the hosting of Tourism Industry Aotearoa’s TRENZ event early that month.

“Rotorua stood out as a bright spot, reporting a 25% year-on-year increase in RevPAR, driven by both higher occupancy and ADR.

“This surge was underpinned by the successful staging of TRENZ, New Zealand’s largest international tourism business event, which attracted tourism operators and buyers from around the world.”

In contrast, the central North Island, Wellington and Christchurch reported weaker results, with RevPAR down 28.1%, 9.5% and 9.4% respectively, compared to May last year.

“[The] Central North Island saw a marked decline in conference and events business, leading to fewer domestic and Australian visitors and impacting both occupancy and ADR. 

“Year-on-year comparisons may be skewed by an increase in reporting properties, with five additional small to mid-sized hotels adding 188 rooms to the reporting pool, a 43% increase.”

The consultancy’s latest New Zealand Hotel Performance Focus for May 2025 can be read here.