Stay the distance

While confirmation that New Zealand has enough vaccines for the whole country is encouraging, it is the reopening of our borders that the tourism sector has desperately waited for.

The hotels, tourism and leisure market was slammed when international visitor lifeblood was abruptly severed and it’s had to rely on discretionary domestic dollars, government stimulus packages and in some cases, managed isolation contracts (MIQ), to keep afloat.

When life as we know it changed 12 months ago, it was expected that owners of tourism-related property and businesses would flock to sell.

In fact, we have not seen any “fire” sales and largely, owners and operators have hung in there – opting to try and ride out the COVID storm – some more successfully than others.

Some of the long-held truisms in the New Zealand accommodation market have actually been turned on their head, with the majority of transactions in the past 12 months being to established owners and operators on the acquisition trail, leveraging off their existing assets and recognising an abundance of opportunity in the market.

Savvy investors are thinking “I’ll grab this now because when the market changes – and it will – I’ll be competing against others”.

I’ve been in the business long enough to know that some premiums have been paid to secure properties and with interest rates still at an historic low, buyers are prepared to accept lower yields because they’re still a heck of a lot more attractive than bank returns.

It has been very encouraging to see the domestic market rally to support the tourism sector by embracing the “Do something new, New Zealand” philosophy.

While those places within an easy drive of Auckland and other main centres have fared best throughout the last 12 months, we must acknowledge that some parts of the country – like Queenstown, and the West Coast – have suffered collateral damage.

Let’s hope greener pastures are ahead now that we can welcome Australians back to these shores.

This edition of Bayleys’ Hotels, Tourism & Leisure portfolio offers 26 exciting opportunities for you to mull over, along with some insights into the boutique accommodation sector and domestic tourism.

Bring on the “New Zealand is open for business” neon sign – and if our Hotels, Tourism & Leisure team can be of assistance to you, please get in touch.

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