New Lincoln University research shows New Zealand hotel room rates from 2000 to 2017 were cheaper than international destinations such as Los Angeles, Melbourne, Sydney, Singapore and Greater London.
Senior lecturer in Business and Hotel Management, Dr Tony Brien, who undertook the research, said the evidence refuted public commentary that New Zealand hotel room rates are comparatively internationally expensive.
“Increasing tourism demand, coupled with a lack of available hotel rooms has seen New Zealand hotel room rates increase significantly since 2000, but this was off a very low starting base”, says Dr Brien.
However, New Zealand hotel rooms are still cheaper than many international destinations.
“Hotel room prices are set by what the market is prepared to pay,” Dr Brien said.
“Present hotel room prices are not necessarily expensive, and price should be considered as the sum of the value and the hotel experience that the guest receives.
“Cheap or discounted hotel room prices can have operational ramifications including not being able to appropriately maintain the hotel stock which impacts guest satisfaction.
“Further, this can devalue the whole New Zealand hotel industry and risks New Zealand’s international reputation as a quality destination”.
He said looking forward, the planned building of new hotels, which will increase hotel room supply, did not mean hotel room rates would go down.
“Many of the new hotels are high star-rated international brands who bring with them international levels of service and physical structure, and as a consequence demand a higher room rate. In effect, this can enable existing hotel room rates to remain at their present levels, or arguably, hotel room rates have the capacity to increase further to ensure ongoing investment in the hotel experience.”