The hotel and tourism industry in New Zealand has demonstrated remarkable resilience, however a clear performance divide is emerging between key markets.
Insight
New Zealand Hotel Market Perspectives 2025
New Zealand's hotel market has seen a steady improvement in international visitor arrivals, driving tourism expenditure to record levels. The current hotel supply wave is also nearing its end after significant expansion, which should help stabilise occupancy as demand continues to recover. Though a bifurcation in performance has emerged between some thriving leisure destinations and challenged urban markets, the overall outlook is positive and should support a resurgence in investment activity.
The following topics and trends are anticipated to shape the market in the coming year:
- International visitor arrivals reaching 87% of pre-pandemic levels, with full recovery projected by 2026-2027
- Record tourism expenditure of $44.4 billion, surpassing pre-pandemic totals by 8.6%
- Distinct dichotomy in hotel market performance - Queenstown, Christchurch, and Rotorua excelling, while Auckland and Wellington face challenges
- Supply growth nearing its end after significant expansion
- Investment activity starting to recover highlighted by the record-breaking sale of the InterContinental Auckland
- Growing adoption of sustainability practices reshaping the hotel landscape to meet evolving guest expectations