‘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.’