Summary:
Stable rentals, boutique growth, backpacker slumps, but Buller optimism
February '25 was a mixed month for tourism on the West Coast, with stable short-term rental performance and strong growth in boutique accommodation balancing sharp declines in backpackers and regional guest nights, while employment gains in Buller provided a positive outlook.
Short-term rentals hold firm as commercial stays dip slightly
The occupancy rate in short-term rentals remained stable compared to February '24, while commercial accommodation saw a slight -1%pt YoY drop in occupancy, reflecting a -6% YoY decline in guest nights. This decline was buffered by a matching -5% YoY drop in available stay units, indicating supply-side adjustments in response to softer demand. Guest arrivals fell sharply by -10% YoY, although a +5% YoY increase in average stay length helped soften the decline in total guest nights.
Hotels gain occupancy, backpackers decline, lodges see strong momentum
Accommodation type performance varied. Hotels recorded a +3%pt increase in occupancy, primarily due to a -6% YoY drop in available stay units, with demand up only slightly by +1% YoY in guest nights. Meanwhile, backpackers experienced a significant -9%pt drop in occupancy, driven by a -20% YoY fall in guest nights. This was largely due to a -26% YoY drop in international guest nights, partly offset by a +13% YoY rise in domestic guest nights. In contrast, lodges and boutique accommodation recorded outstanding growth, with occupancy up +19%pt YoY to reach 83%, despite a +16% YoY increase in supply. This was driven by surging demand from both markets: +48% YoY in domestic guest nights and +59% YoY in international guest nights.
Grey sees occupancy rise, other districts face guest night declines
At the district level, only the Grey District recorded an increase in occupancy, supported by a -8% YoY reduction in available stay units. Guest nights declined across all districts, though to varying extents: Westland District: -3% YoY (smallest decline); Grey District: -5% YoY; Buller District: -12% YoY (largest decline).The international market was the main driver of the decline in guest nights in both Westland and Buller, while in Grey District, domestic market softness was more pronounced.
Buller leads a slight upward trend in tourism jobs
Employment in tourism-related industries in the region increased by +1% YoY, slightly outperforming the national trend (0% YoY). This growth was led by the Buller District, which saw a +8% YoY increase in filled jobs, particularly in: Accommodation-related employment: +25% YoY; Recreation services: +10% YoY Food and beverage services: +6% YoY.