Government lobbies investors for 26 new hotels

New government figures suggest an extra 26 hotels are needed for New Zealand to cope with the expected influx of tourists over the next 10 years.

The research comes as part of the government’s “Project Palace” initiative, which sees key government agencies joining together to address New Zealand’s accommodation supply problems.

Economic Development Minister Steven Joyce says the research will be helpful to private investors considering when and where to invest in New Zealand’s tourism accommodation industry.

The government’s number crunching reveals demand and supply estimates are borne out: The shortfall in new hotel rooms is expected to be up to 4526 across these centres by 2025 over and above new hotels currently planned.

Associate Tourism Minister Paula Bennett says this is the equivalent of 26 hotels the size of the Sofitel Viaduct in Auckland.

Mrs Bennett and Mr Joyce are confident Project Palace will help bring investors into New Zealand to build the required hotels.

Project Palace’s head of capital Quentin Quin tells NBR the initiative will cost $100,000 of taxpayer funds and “that will mainly be for consulting with the private sector partners.”

Ms Bennett says attracting high-value investment to the country is part of the government’s plan to attract an extra $160 billion of capital by 2025.

Earlier this month, Tourism NZ revealed it would no longer be promoting New Zealand as a summer destination, instead opting to put its $80 million budget into promoting the off-peak seasons of autumn and spring.

Tourism NZ chief executive Kevin Bowler denied claims this was sending a message that the country was “shut for tourists” during summer.    

But not all are convinced by the government’s plan.

University of Otago tourism behaviour professor Juergen Gnoth has previously told NBR the investment will benefit overseas investors and not locals.

He said new jobs will only be at the low level, adding that foreign-owned hotels will “dilute the experience” of tourists visiting New Zealand.

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