Luxury hotel shortage amid tourism boom spurs move to lure overseas investors to NZ

Overseas investors are being wooed to build luxury hotels in New Zealand as the demand for four and five-star accommodation outstrips growth.

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A record 3.8 million people visited New Zealand to the year to June last year. Source: 1 NEWS

A record 3.8 million people visited the country in the year to June 2018 and that number is forecast to keep growing.

In Auckland, 4000 beds are needed by 2025 but 72 per cent of planned hotel construction is yet to begin.

Accommodation is in demand nationwide, so New Zealand Trade and Enterprise is calling on foreign investors to help out.

"It's about partnering with New Zealand to create an outcome that is mutually beneficial," Dylan Lawrence of NZ Trade and Enterprise said. 

He said the hotels need to be developed by local developers in New Zealand, constructed by New Zealanders, and employ and be operated by New Zealanders here.

Just over 50 per cent of hotels are owned by Kiwis, so overseas players could have a bigger role.  

"Internationally the key markets are Australia, Singapore and Hong Kong. They have a track record of investing in New Zealand," Mr Lawrence said.

But there are big hurdles for anyone looking to invest.

These include consents and local regulations, said Bell Gully commercial real estate expert Andrew Petersen.

"People have to get their heads around getting overseas investment consent if they need it, and then how do they deal with the local regulatory environment?

"So the easier we can make it for people to invest in this stuff the better, recognising that we need rules to safeguard, make sure we've got the right investors come into this country," he said.

With major shortages in Auckland, the pressure is on in our largest city which is hosting both APEC and the America's Cup in 2021. 

And by 2025, more than four million tourists a year are expected to visit - a 58 per cent increase.

Meanwhile, Taupō needs at least 100 new rooms by 2025 and no construction is underway, while nearby Rotorua will require over 500 hotel beds.

Queenstown is booming and needs an extra 1170 rooms, with a shortfall of 251 predicted by 2025.

And while no new hotels are planned in Dunedin, an extra 261 beds will be required there.