Major industry players claim Queenstown’s hotel industry has largely fallen on tough times – and only a conference centre will save it.
Queenstown’s suffering from a Christchurch earthquake-induced tourism downtown, tour business lost last summer due to the Rugby World Cup and a drop in longer-stay long-haul visitors caused by the global financial crisis, the industry players say.
They also claim the problem’s heightened by an over-supply of upmarket rooms, especially after the global Hilton chain added 280 rooms across two new hotels a year ago.
Some hotels are massively discounting rooms – an approach slammed by other hoteliers.
Millennium and Copthorne Hotels’ New Zealand boss B.K. Chiu told his annual meeting last month: “There’s enough rooms in Queenstown to last the next 25 years assuming you have three per cent growth.”
Tourism consultant Stephen Hamilton told the recent NZ Hotel Industry Conference that jewel in the crown Queenstown is looking tarnished and the crown somewhat dented.
“This is such a different situation to what so many people would have anticipated – especially the property developers and white-shoed salesmen,” Inside Tourism reported him saying.
Hamilton, a director of tourism consultancy Horwath HTL, said occupancies in Queenstown’s 4.5 and five-star hotels fell to just above 50 per cent last year.
“The financial pressure will be on Queenstown hotels for several years to come.
“A new conference centre could make a major difference.”
Queenstown is also reliant on a recovery in Christchurch, Hamilton said.
Local Tourism Industry Association NZ hotels chair Penny Clark says: “It’s a very serious situation out there.”
“Who’d have thought that with the meltdown we got back in 2008, we’d still be sitting here and now facing, possibly, another 10 years of it being a bit tough.”
Clark – a member of the local conference centre working party – says adding this amenity is absolutely critical.
“This town basically has all its eggs in one basket and it’s called the ‘leisure market’.
“We need to be major players in the conference market because we just can’t have this boom and bust mentality we’ve currently got.”
Hotels discounting isn’t smart business, she says.
Graham Wilkinson, who owns Queenstown’s upmarket St Moritz and Sofitel, says the local hotel sector is probably as competitive as it’s ever been.
Hotels that discount damage themselves in the longer term, he says.