Firms knocking at b&bs

Auckland’s acute hotel squeeze sees business travellers turn to Airbnb.

One of the country’s biggest corporate travel managers says pressure on Auckland hotels has forced it to use Airbnb for some of its clients.

Orbit Travel said there was growing resistance to paying room rates of up to $700 a night at peak times.

Managing director Paul Rennie said the influx of overseas tourists meant business travellers, to Auckland and Wellington particularly, had to look elsewhere. Over the last year his firm had been booking increasing numbers of guests into Airbnbs — entire properties rather than rooms in homes.

Orbit has annual sales of over $500 million with about 900 clients in New Zealand and handles a large chunk of government business.

Rennie said 8-11 per cent of his clients were now staying in Airbnb properties.

Rates for hotel rooms were getting higher because of a growing shortage.

“We’ve had some that have had to pay $700. That becomes more difficult and Government is not interested in paying anywhere near that. There’s elasticity around $240 to $260 a night but it becomes questionable after that.”

Although high hotel rates had not stopped businesspeople travelling, their way of doing business was changing.

Rennie said more corporate clients were travelling to Auckland and returning home that same day rather than staying overnight.

Airbnb country manager for Australia and New Zealand, Sam McDonagh, said the number of business travellers in properties dedicated to the corporate market had trebled in the last year.

About 10 per cent of more than 20,000 listings were for the business market. Properties were often more conveniently located than hotels.

Airbnb launched globally in 2008 and last week the company revealed it was set to launch a search tool for business travellers.

The Business Travel Ready search tool would enable professionals to seek out homes and apartments that are business-friendly, including having Wi-Fi, a desk and other amenities that would be offered by a hotel.

Auckland’s average hotel room rate to last year was $197 a night, up 9 per cent on the previous year’s, according to Hotels.com data.

Concern over the lack of new hotel development prompted New Zealand Trade and Enterprise to assess the room deficit and to promote New Zealand as a good place to invest as part of “Project Palace.”

The research focused on Auckland, Rotorua, Wellington, Christchurch and Queenstown and shows that, if demand and supply estimates are borne out, the shortfall in new hotel rooms is expected to be up to 4526 across these centres by 2025, over and above new hotels currently planned.

That is the equivalent of 26 hotels the size of the Sofitel Viaduct in Auckland.

A Deloitte study released last month showed more visitor accommodation is the highest priority infrastructure needed to support the future growth of the tourism industry.

Short-term visitor arrivals, which include tourists, people visiting family and friends and people travelling for work, reached 3.543 million in the year ended March, up 8.9 per cent from a year earlier, Statistics New Zealand has revealed.

We’ve had some [clients] that have had to pay $700. Paul Rennie, Orbit Travel

Herald

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