Take advantage of New Zealands tourism boom

One of Hamilton’s largest hotels is being offered for sale.

The 67-room Ambassador Hotel comprises three accommodation blocks: one a five level building containing 38 rooms; a second one-level block of 13 rooms plus hotel amenities including the restaurant/bar and reception area; and the third a two-level block of 16 rooms. The buildings occupy a prominent freehold 5557sq m site on the doorstep of Hamilton’s CBD — with frontages to Ulster, Victoria and Mills Streets

This landmark hotel is currently operated under franchise agreements to Choice Hotels and offers a mix of guest accommodation under the popular Quality and Clarion brands.

The hotel is being marketed for sale, by Dean Humphries of Colliers International and will be sold by way of an expressions of interest campaign closing 4pm Thursday 4th August 2016, unless sold prior.

Humphries, Colliers International’s National Director of Hotels, says the hotel represents an exceptional opportunity to acquire a significant tourism asset in one of the New Zealand’s fastest growing regions.

“Hamilton has become a ‘hot-spot’ for hotel assets given it is only 90 minutes from Auckland International Airport. There are also a number of demand drivers located in the city including FMG Stadium Waikato, Seddon Park and the Claudelands Events Centre. Finally, Hamilton is also in close proximity to many of the North Island’s key tourism destinations such as Hobbiton, Waitomo Caves and Rotorua,” says Humphries.

As the fifth largest hotel in Hamilton, the Ambassador Hotel is uniquely positioned in the Hamilton marketplace. The hotel offers guests a wide choice of room types across its distinct brands, namely the Quality Hotel and the recently completed Clarion Suites. Hotel amenities include a restaurant, bar and café, two conference rooms, reception/lobby, fitness centre, outdoor swimming pool and ample on-site carparking.

Humphries says there has never been a better time to own a hotel asset in New Zealand.

“Tourism demand is running at record levels with annual international visitors now well in excess of 3.2 million people. This is an increase of over 10% in the past 12 months and has resulted in record occupancy and increasing room rates which are driving both profitability and property values higher.

“With many hotel investors electing to hold on to their assets and take advantage of extremely buoyant trading conditions, the Ambassador Hotel represents an exciting opportunity to buy into the fast growing New Zealand tourism sector, especially given it is an exceptionally well-located and established hotel.

“Buoyed by a strong cashflow profile, the hotel offers attractive investment return along with significant short to medium term growth potential.”

Humphries says, as an added appeal, new owners have the option to retain the existing hotel operator to manage the hotel on their behalf as a passive investment, or reposition the asset when the current agreements terminate in mid-2017 (Clarion Suites) and late-2018 (Quality Hotel) respectively. Alternatively the hotel would also be well suited to an owner operator or a family business that chooses to operate the hotel themselves in the short term.

A recent report commissioned by Tourism New Zealand, New Zealand Trade & Enterprise and the Ministry of Business, Innovation and Employment has suggested that New Zealand has a ‘critical shortage’ of hotel rooms in a number of its key regions with international visitor arrivals forecast to increase from 3.1 million in 2015 to approximately 4.5 million per annum by 2022.

The report also suggests that regions such as Hamilton would likely see immediate benefits as a result of the current tourism boom given Auckland is now at virtually full capacity during peak trading periods, forcing visitors to look elsewhere for accommodation.

Finally, the report concludes that 2017 is anticipated to be bumper year for tourism with a number of major events scheduled including the World Masters Games, the British and Irish Lions Tour and the Rugby League World Cup.

Humphries says trading conditions in the New Zealand tourism market and hotel sector are running at historic highs.

“Occupancy in our major tourism markets are surging to over 80% and average room rates across the country increasing by over 8% over the past twelve months.

“These factors, together with a backdrop of a virtual hiatus of new hotel development has culminated in one of the strongest tourism markets in New Zealand for decades.”

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