Regional New Zealand hotel sales keep pace as demand for assets remains strong

The 51-room Quality Hotel Ambassador is part of the Choice Hotels system.

Demand for regional hotels is on the rise following a record number of hotel sales in New Zealand's main tourism markets, commercial real estate company Colliers reports. 

Dean Humphries, national director of hotels for Colliers International, said the recent sale of two large regional hotels follows more than $500 million of hotels that changed hands in 2015/16. This was the strongest period on record in a decade.

An Australian investor has purchased the 51-room Quality Hotel Ambassador in Hamilton. Humphries said in a statement that the Ambassador–one of Hamilton's most well-known accommodation providers–is the second hotel the Australian investor had purchased in the last 12 months. Humphries explained, “They see Hamilton as a key growth region both due to its status as a satellite city to Auckland and as an emerging tourist destination.”

Virtual Event

HOTEL OPTIMIZATION PART 2 | Now Available On-Demand

Survival in these times is highly dependent on a hotel's ability to quickly adapt and pivot their business to meet the current needs of travelers and the surrounding community. Join us for Optimization Part 2 – a FREE virtual event – as we bring together top players in the industry to discuss alternative uses when occupancy is down, ways to boost F&B revenue, how to help your staff adjust to new challenges and more, in a series of panels focused on how you can regain profitability during this crisis.

Meanwhile, an Auckland investor has bought the 82-room Park Hotel Ruapehu in the central North Island’s National Park. The Park Hotel Ruapehu is one of the region’s largest commercial accommodation providers. It is close to the Tongariro Crossing and Whakapapa ski fields. Humphries said, “The new owner from Auckland plans to immediately complete the remaining room renovations to the property in time for the winter ski season.”

Humphries said that investors are seeking higher returning investments in emerging tourism markets, which is driving up enquiry levels for regional hotels. “These hotels can still be purchased well below current replacement cost and at attractive yields returning up to 10 percent on current net cash flows,” he said.

Humphries added that other emerging hot spots include Hawke’s Bay, Taupo, Tauranga, Nelson and Dunedin. “Investors have high levels of confidence in New Zealand’s hotel sector, thanks to favorable trading conditions and the huge economic benefits of the country’s ongoing tourism boom,” he said. A record 3.5 million visitors came to New Zealand last year. The government is forecasting 4.9 million annual visitors by 2023.

Suggested Articles

The partnership aims to help restaurants streamline online orders from apps like GrubHub, UberEats, DoorDash, Chownow, Caviar, Postmates and others.

Two conferences traditionally held in the first half of each year are rescheduling for the second half.

In October, visitor arrivals were down 90.4 percent compared to 2019 and hotel occupancy was below 20 percent.