- By Brendan Kelly, Chairman, Business East Tamaki
We’ve been officially in recession for the last three quarters, with what most analysts predict as a further two to three quarters of rocky road before the economy recovers from highly inflationary interest rates and cost of living crises, mostly driven by excessive and uncontrolled previous Government spending and the global macro-economic environment.
Last week saw announcements heralding meagre signs of growth with GDP at 0.2 per cent, whether + or – , however the story for hospitality and hotels (my business segment) paints different pictures that reflect how both the business and household economies are impacting trade.
The Auckland CBD economy has been hammered not just with recession, but also long periods of disruption/road closures from the City Rail Link and increasingly higher levels of crime in the last year.
Hotels in the CBD are suffering increased competition from 10 per cent more rooms available in 2024 vs 2023 as well as a further 800 rooms scheduled to come online in the next year or so.
Inner-city hotel occupancy rates are much lower than Auckland regional hotels, with statistics showing overall occupancy rates are around -2 per cent lower than the same months last year.
By contrast regional hotels within the Auckland area not classified as CBD like Albany, Henderson, Takapuna, and Highbrook in East Tamaki are faring better than their CBD counterparts with stronger occupancy and demand from business customers on weekdays and rates that are not linked to the leisure customer competing for Auckland Central weekend locations.
Restaurants also report a similar tale of two cities, with many popular eateries facing very strong demand while others report markedly reduced customer numbers.
Ponsonby’s shooting incident in May left local restaurants and bars empty for nearly two weeks before consumer confidence saw punters back on the streets.
Many restaurants are trying the new app ‘First Table’, a recent Kiwi first as a great way to lock in new customers, and give the chance for a cheaper earlier dining experience.
Helpful to both restaurant and consumers in these tougher conditions on the home economy.
We have a challenge to keep going and growing in business over the next few months and we trust that business in East Tamaki continues to power the growth our New Zealand economy needs.
