The other land down under, New Zealand, is steadily raising its profile as a tourist destination, thanks in large part to hotel investments from China.
Earlier this month the Auckland Council approved a $125-million central city waterfront development, featuring the Park Hyatt Auckland. The project will be built by Beijing-based Fu Wah International Group in a partnership with Waterfront Auckland, an agency affiliated with the Council.
The Hyatt development highlights the plan by New Zealand’s Tourism Industry Association (TIA) to develop its hospitality industry with a focus on the higher end of the market. TIA chief executive Chris Roberts announced a plan this year to double the country’s tourism revenue in the coming 10 years, with the target of 41 billion New Zealand dollars, or $25.75 billion. High-spending Chinese travelers are an important part of that equation.
“Until recently, we haven’t had significant investment from Mainland China, we are starting to see it,” said Roberts. “New Zealand needs to cope with the growth in tourist from both China and other markets so it needs more investment, especially in hotels… so there are more opportunities for Chinese investment.”
This is the most recent prominent investment deal between Chinese investors and New Zealand hotels. New Zealand has had more significant hotel investment deals from Chinese investors in recent years. Compared with the past where the Chinese-related investment all came from Singaporean or Malaysian companies, independent Chinese investors have upped their game.
In late 2013, Chinese company Shanghai CRED Real Estate Co. spent NZ$29 million ($18.3 million) on Peppers Carrington golf resort near Auckland, catering to wealthy Chinese tourists. At the end of last year, Chinese billionaire and founder of Shanghai Pengxin Group, Jiang Zhaobai, bought the Hilton hotel in Queenstown.
The push into New Zealand by Chinese hospitality investors is hardly unique. Most countries in the region have seen an influx of capital from China in recent years.
The trend is the focus this week of the 2015 AHF International Hotel Investment Summit & 2nd China Hotel Asset Management Conference being held in Beijing and co-organized by the Asia Hotel Forum and Questex. The co-branded event is being held between September 22 to 24.
“The IHIF Summit Series continues to span the globe to deliver hospitality investment forums that provide hoteliers and investors access to the industry’s senior decision-makers, the latest industry research and trends and prospective growth markets,” said Questex President and CEO Kerry Gumas. “By partnering with AHF – with its close ties to the hotel community in China – we will generate awareness, promote investment initiatives and develop relationships with top industry professionals in key global investment hubs.”
Relatively small but developed, New Zealand is proving to be an attractive destination for investment in the hotel and hospitality space. The experienced the largest growth in tourist visits among all Asia Pacific economies in the first half of 2015, with a year-on-year increase of 9.7 percent, according to data compiled by CBRE.
Statistics New Zealand recently released data showing that total guest nights in July were up 5.3 percent year on year, with international guest nights increasing by 3.3 percent and domestic guest nights up 4.4 percent.
New Zealand has been targeted as a strategic investment destination for Chinese enterprises under Chinese president Xi Jinping’s One Belt, One Road (OBOR) initiative. Xi personally promoted OBOR while visiting New Zealand in November 2014, accompanied by a trade delegation.
In addition to the new Hyatt-managed property in Auckland, Fu Wah will also be involved in the expansion of Wellington International Airport and its accompanying exhibition and convention center and hotel. The company signed a memorandum of understanding regarding the development package with the Wellington City Council on September 10. This month’s announcements significantly expand Fu Wah’s footprint in Oceania - in June 2014 the company acquired the Park Hyatt Melbourne.
Growing Chinese tourism in New Zealand is partially offsetting the economic impact of lower demand for New Zealand dairy products, according to New Zealand Economic Development Minister Steven Joyce. Speaking with Chinese media in late July, Joyce said that new investment in accommodation, including regional hotels, and other infrastructure would be crucial for New Zealand to cater to the influx of visitors, led by Chinese tourists.
A mid-August depreciation of the renminbi could prove to be a minor setback to both investment and tourism from China, but few expect this be be anything but a hiccup. The NZD to CNY exchange rate has been increasing since the beginning of this year from NZ$0.20695 on January 19 to NZ$0.24705 on September 21.
“The exchange rate is helping Chinese visitor numbers but the numbers were already growing very rapidly,” said Chris Roberts, chief executive of the Tourism Industry Association New Zealand. “The new figures show that we had 320,000 Chinese visitors in the last 12 months, which is a 31 percent increase.”