Bondesen Horner posted an update 3 months, 3 weeks ago
The tourism industry is among the most important sectors of the South Pacific. The tourism industry here in New Zealand includes both worldwide tourism and domestic tourism. It is also a very important sector for the nation’s growth and recovery from the global recession of recent years.
This research aims to study the impact of hotel development on the New Zealand market (using the factors of positive external social and economic consequences, negative external impacts, social impacts and negative outside social influences ). These are then compared with the present trends and foreseen scenarios to establish the effect of future increases in the hotel industry. Following this, a description of the primary factors which have affected the industry is given.
Find more info A description of the primary factors that have affected the business is given in the context of past and future trends. Previously, increasing levels of tourism were closely linked to increases in property values, as well as increased tax revenues from guests. Future projections suggest that future hotel development will have little effect on the above-mentioned economic impacts. However, some of the changes we have already observed may be dampening the impacts of future increases in property value and taxes.
The principal factors of recent interest that have had the greatest impact on the sector include increases in the amount of hotel rooms, declines in the number of rooms in a building and increases in the cost of ownership of these properties. Both of these factors have had a major effect on the overall profitability of the business. The net effect of both united has been a lower profit margin over the last twelve months compared to the same period in the preceding year, although the six-month figures remain strong.
The reduction in the number of hotel rooms around the market has had a significantly negative effect on the supply side of the business. On the other hand, more units aren’t being sold, which could affect the profitability of each individual property. The reduction in the supply of hotel rooms also suggests that a higher number of prospective investors are able to obtain a share of those properties, which could reduce the profitability of the whole portfolio.
The decline in the amount of rooms on the market has created a reduced variety of billeted bedrooms, which have significant social impacts. As a consequence of a decreased billeted capacity, the average daily rate per room has risen by around seven per cent in Boston. This increase in demand has led to the creation of more units that are either fully or partially occupied. The effect on revenue and occupancy is important, with most of the newly occupied units expected to be occupied on an annual basis. Besides affecting revenue and the bottom line, the relatively high rate of occupancy combined with reduced prices for new units has made a range of secondary effects, including lower property maintenance expenses, an increase in the supply of short term reserves for new rooms, and a reduction in the volume of sales. The negative effect on the supply of billeted bedrooms will only lower the amount of active units in the marketplace.
The increase in the number of vacant units in the marketplace has had a corresponding negative impact on the level of inventory on hand. This is especially relevant for Boston hotels, as the biggest increases in stock have happened recently as the active source of components decreased. As the active supply of units increases, there is a higher risk of vacancies, a decrease in quality of stock, and an increase in prices for unused inventory. In short, a small gain in the supply of beds may lead to larger increases in the price of fresh inventory and reduced profits due to higher levels of vacancy and slower investment returns.
Beyond the direct effect on billeted bedrooms and the balance of active and vacant units on the property, the fluctuations in the level of service among Boston hotels has created a ripple effect on the degree of quality of service expected from guests. Many hotels have found that after years of terrific success, guests have stopped patronizing their establishments and rather choose other regional competitors. If this trend continues, it could have a very detrimental effect on the profitability of any hospitality operation. The solution? Developing a culture of hospitality that clearly communicates to clients they’re welcome, valued, and the expectation of exceptional service. The solution to improving customer experiences is a multi-pronged strategy that includes both general improvements to guest interaction and specific actions that target the root causes of why guests are not returning.