First shoots of city hotel revival

The quake rebuild drags on, the Covid-19 pandemic has been like a bucket of cold water on tourism, and construction costs are climbing.

But in this difficult environment the first shoots of a revival in the hotel sector are starting to emerge in Christchurch.

The past few months have seen consent bids filed with the city council for new hotels, central city land sold for hotel development, and existing hotels change hands.

Cautious optimism over reopened borders and the upcoming opening of the Te Pae convention centre are being offered up as the reasons.

The Quest chain will open a new hotel in a renovated office building on Cambridge Tce in mid-2022, and has sought council approval to build a 43-apartment hotel on the former convention centre site on Kilmore St.

Miles Yeoman, one of the developers behind both franchise projects, says they will be aiming mainly at the business traveller.

‘‘We are starting to see people travelling. I think once Auckland has opened, that will create another wave of demand.’’

Yeoman believes high construction costs mean the big hotel projects in the city are still ‘‘two or three years away’’.

‘‘I think we’re going to start seeing a shortfall soon.’’

Christchurch had about 3400 hotel beds at the time of the earthquakes. By the time the managed isolation and quarantine (MIQ) hotels reopen to the public, there will be about 4000 hotel beds in the city.

The new developments now are of boutique, small-to-midsized places.

Peter Morrison, the Canterbury president of Hospitality New Zealand, says that despite the increased numbers he expects the big new hotels yet to get off the ground will still be built.

While building them now would be ‘‘overkill’’, there will a market for them soon, Morrison says.

‘‘They will go ahead, but probably not for another two or three years.’’

Te Pae, due to open within weeks, can hold up to 3000 delegates. The city’s yet-to-be-built stadium, due for completion in 2025, will add more demand for beds.

One of the city’s newest hotels is Christchurch City Hotel, opened by THC Group Hotel on Colombo St in July. It has 46 rooms and plans to open a rooftop bar next year.

Next will be The Observatory, a boutique hotel in the Christchurch Arts Centre opening in March. It is owned by New Zealand’s Sarin Group, which runs Hilton and Accor branded hotels and The Muse in Manchester St.

Company founder Raman Sarin said Christchurch’s visitor market had been ‘‘dead’’ during Covid, but Auckland’s re-opening would provide a significant boost.

‘‘When Auckland closes, business shuts down by at least 50 per cent . . . that’s where the corporates come from.’’

Te Pae’s opening will ‘‘give great confidence and be great for tourism and hotels’’, he says, while some of the large hotels and those with international brands will be counting on the offshore market.

Sarin says while a pick-up in international tourism is probably months away, he sees no reason why next summer will not be busy.

‘‘If Covid is controlled next year then overseas will be open, and we will have an influx of people coming in. I can see no reason why by then they won’t be back. Not only from Asia, but Europe and America as well.’’

The company’s other two hotel projects in the city remain on hold. The Modern is planned as an office conversion for the Hilton chain in Hereford St, and Sarin says they ‘‘want to see how the market is when the Asian traffic opens’’.

The company’s bare Gloucester St site next to Cathedral Junction is earmarked for a Holiday Inn, but Sarin says this may change and ‘‘it all depends on how the market adjusts after Covid’’.

Building the right brands is important, as many international travellers are very brand-loyal, he says.

Christchurch has at least 10 bare plots earmarked for hotels, mostly on or near Cathedral Square. They include a Worcester St site recently sold by the Britten family, Japanbased H.I.S Hotel Group’s land behind the Novotel, and the Carter Group’s sites on the southern side of Te Pae.

As well, the former Rydges on Oxford Tce remains quake-damaged and closed, while the former Harley Chambers remains boarded up despite a hotel redevelopment plan.

In the meantime, existing hotel operators have been buying independent hotels in the city.

Last week the Rendezvous was rebranded as the Fable Christchurch after being bought by CPG Group, owned by New Zealand’s Pandey family, who also own Terrace Downs and Hanmer Springs Hotel.

CPG Group will create a new restaurant and gin bar and renovate the hotel to five-star standard, which a spokesman says will ‘‘boost the city’s appeal for both local and, eventually, international, visitors.‘‘

The Patterson family, owners of the Commodore Airport Hotel in Memorial Ave and the Queenstown Park Boutique Hotel, have bought the boutique Hotel Montreal from Lilly Cooper and family. Michael Patterson describes the timing as ideal, with the city rebuild progressing.

‘‘Couple that with the eventual return of tourists to the city, and we think Christchurch is heading into an exciting era,’’ he said.

‘‘This is just a small family business. Some of the big guys don’t get out of bed for less than 100 rooms.’’