At a recent function hosted by Horwath HTL… Greg Remmington, manager at Castle Resorts and Hotels, with Stephen Hamilton, director Horwath HTL At a recent function hosted by Horwath HTL… Greg Remmington, manager at Castle Resorts and Hotels, with Stephen Hamilton, director Horwath HTL

New Zealand hotel projects on table

Much needed new hotel inventory in New Zealand is being held back by commercial issues around their construction.

This is despite investors and developers keen to take advantage of favourable business conditions, according to one of the country’s leading hospitality and tourism industry consultants.

‘The issue is that we are really struggling to get projects across the line and built,’ says Stephen Hamilton, director at Horwath HTL.

‘We are seeing the interest to invest and we’ve got the projects but people are struggling to get the construction contracts signed and the construction companies engaged.

‘We are dealing with commercial issues in terms of the construction and the allocation of risk between the owners/developers and the construction companies.’

Hamilton’s comments come a few weeks after Fletcher Building’s woes began to be highly publicised in the media. He says there is a need for more hotels and the room rates for hoteliers are getting better.

But that is only part of the picture.

‘While room rates are rising strongly in the main centres, operating costs and construction rates are going up as well, as are land prices. Building code requirements have tightened up too.

‘So we have challenges in the feasibility model – they are just different to what they have been in the past.’

ProMag Publishing