Exports

Annual guest nights continue to decline in March 2017

Tuesday May 16, 2017 Hugh Dixon

Total guest nights in commercial accommodation providers declined for the year to March 2017, from 38.5 million to 38.4 million.  Overall this was a decline of 0.3 percent from the previous month.  This is the second month in a row that has seen a decline in annual total guest nights, the last time this occurred was in late 2012, when annual total guest nights declined to 31.0 million. 

 

 

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For the year to March 2017, Auckland guest nights increased slightly to 7.5 million and Queenstown guest nights declined to 3.5 million.  These two locations were still New Zealand’s two most stayed in locations.  At the same time, nationwide hotel guest nights rose to 13.6 million and motel guest nights declined to 12.1 million.

 

Since late 2012 annual guest nights have surged in New Zealand due to rapid increases in international guest nights.  Annual international guest nights have gone from 12.2 million for the year to September 201

2 to 16.6 million for the year to March 2017.  At the same time annual domestic guest nights have slowly grown from 19.1 million to 21.8 million.

 

Given we have seen two months of annual declines in total guest nights, it should be asked, is this a blip in the trend, soon to be corrected, or is it a period of sustained declines, like that seen between 2010 and 2012? 

 

The evidence suggests that it is likely a continued trend, given three factors.  The trend through will be interrupted by a one-off event, in this case the British and Irish Lions tour of New Zealand that starts on 3rd June and runs until the 8th July.  This event will see guest nights in New Zealand soar for these two months as thousands of visitors travel to and around New Zealand to watch the games.  The last British and Irish Lions tour of New Zealand 11 years ago saw a similar impact on New Zealand guest nights.  The 2017 Rugby League World Cup in October, November and December will have an impact on guest nights, but this might not be as large as the British and Irish Lions tour. 

 

The first is that annual domestic guest nights have been declining for the last nine months.  Secondly growth in international guest nights has been slowing over the last six months, with annual international guest nights declining by a few hundred in the year to March 2017, the first negative growth in international guest nights since October 2013.  The third is the rise of non-commercial accommodation providers, who are not part of the surveyed data on commercial providers.

 

The rise of non-commercial accommodation kicked off in 2008 with the creation of AirBnB, an online provider allowing home owners to rent out their homes to short-stay guests.  In 2017, there are a multitude of companies providing properties to tourists and visitors seeking short-term accommodation in New Zealand.  With these providers increasing in popularity among both domestic and international visitors, it is hard to determine how many guest nights are now being missed out by the commercial accommodation monitor survey.