New Zealand

COVID isolation rules end but for hotel & tourism sector it’s still a long road to recovery

HCA welcomes decision to end compulsary isolation but say it's not a magic bullet & New Zealand must work hard to attract back international travellers

Hotel Council Aotearoa (HCA) is delighted by Cabinet’s decision to end compulsory seven-day isolation for COVID cases.

Ending compulsory isolation rules for COVID cases is unlikely to be a magic bullet for New Zealand’s accommodation and tourism industry, but it’s critical that New Zealand does everything possible to attract back international travellers. 

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Compulsory isolation rules were off-putting for tour organisers and other high-value international travellers, especially when most comparable international destinations had long dispensed with the restrictions.

Hotel Council Aotearoa (HCA) Strategic Director James Doolan said: “We have been in dialogue with Government on this issue for some time now. 

“We acknowledge that all COVID-related policy settings are, by their nature, a delicate balancing act.  However, our close neighbour and tourism competitor Australia was able to end compulsory isolation rules ten months ago, so it’s great that New Zealand has now caught up.”

Information released by Horwath HTL and HCA shows that, despite a strong July due to the positive impact of the FIFA Women’s World Cup 2023, there is still some way to go before the hotel sector, and tourism more broadly, has fully recovered after COVID-related border closures.  

New Zealand-wide hotel revenue per available room (or “RevPAR”) for the 12 months ending July 2023 was $151, made up of 66.9 percent occupancy and a $226 average daily rate. This compares with RevPAR of $153, made up of 79.6 percent occupancy and a $192 average daily rate, for the 12 months ending July 2019.

“The numbers show that the typical hotel’s revenue over the 12-month period to July 2023 is still below the same period four years ago pre-COVID, largely due to the fact that hotels are only two-thirds full on average, rather than 80 percent occupied”, said Doolan. 

“Meanwhile, hotels are dealing with substantial cost increases during those four years, including labour costs, utilities, rates, insurance and interest costs.”

“We’re very grateful that Government has listened to Hotel Council Aotearoa and other stakeholders in finally removing compulsory isolation rules.  It’s a long road to recovery, but every little bit helps,” said Doolan.

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