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New Zealand hotels record 140% rise in average room rates during Rugby World Cup

The Langham Auckland

Average achieved room rates and room revenues in Auckland hotels in the three weeks ending October 23, 2011, the day of the Rugby World Cup final, rose by 140% compared to the same period in October 2010 according to data released from STR Global.

This result, coupled with a strong impact on September 2011 trading from the Rugby World Cup, should allow Auckland (and similarly Wellington) hotels to experience a substantial uplift in annual revenues and profitability in 2011, according to research and analysis by Horwath HTL Ltd.

STR Global data shows that for the three weeks ending October 23, 2011 including the last round of pool play, quarter and semi finals and final at the Rugby World Cup, Auckland hotels achieved an average room rate of $NZ 348 excluding GST and room occupancy of 82% which was 6 occupancy points up on the same period in October 2010. Room revenue in Auckland hotels rose by 160% on 2010 according to STR Global daily data.

Average room occupancy and daily room rate were understandably highest in the weekends of the semi finals and final, with occupancy averaging 98% each Friday, Saturday and Sunday, which was up 25% to 40% on 2010.

Weekday hotel occupancies in October 2011 were below that in 2010 due to less corporate travel, conferences and overseas group tours according to market research by Horwath. This avoidance of travel during the Rugby World Cup tournament was due in part to perception and communications by some in the hotel and tourism industry that there would be a lack of available hotel rooms and significantly higher room rates during the rugby tournament.    

Auckland hotels also benefitted from the first three weeks of the Rugby World Cup in September 2011 when seven games were played at the Eden Park and North Harbour stadiums. Room revenue according to STR Global data was up 75% compared to the same period in 2010. This was due mainly to a 70% increase in average room rate which more than compensated for lower week day occupancies during the rugby tournament. Occupancy for the whole month of September 2011was 74%, only slightly up on 2010.
 
Wellington hosted two quarter final and six pool games during the Rugby World Cup. Four were played in September and helped increase both the average room rate and room revenue of Wellington hotels by 40% compared to September 2010. For the first three weeks ending October 23, 2011, the average room rate and room revenue rose 70% on October 2010, despite occupancy since the quarter finals on 9 and 10 October being down approximately 20% on October 2010. Despite the Rugby World Cup visitor inflows, overall occupancy in Wellington hotels in September 2011 was only slightly up on 2010. Occupancy for the three weeks ending October 23, 2011 rose by five occupancy points compared to the same period in 2010 according to STR Global.           
  
According to research by Horwath, the Rugby World Cup is likely to significantly increase 2011 calendar year room revenues and profitability in hotels in locations which hosted pool games and particularly knock out finals. Horwath estimates that total annual revenues (including rooms and food and beverage) and hotel profitability for Auckland hotels in 2011 could potentially increase 10 -15% on 2010 due mainly to a 10% rise in annual room rate, primarily due to the Rugby World Cup. This will be a welcome result for hotel owners and operators, whose profits have suffered for the last three years since the Global Financial Crisis started in September 2008.

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