Source: MIL-OSI Submissions
Source: Impact PR
A strong summer season for domestic tourism has helped rental revenue for holiday homes surge to record levels, according to new research.
Latest figures from Bachcare, New Zealand’s largest holiday home management firm, show property owner rental returns are up 14% on the previous year and up 39% on pre-pandemic levels.
The summer season which ended in March set a new record for the most accommodation bookings – up 4% on the previous year and a 15% increase on 2019 levels.
Forecasts based on forward bookings suggest the 2022/23 year will surpass previous years and may lead to a shortage of short term rental accommodation in some areas.
A new record has also been set for the highest annual revenue for a single property – with a Mt Maunganui home earning $81,000 – the equivalent of over $1,500 per week, and around three times higher than the average Bay of Plenty rental property which is tenanted for the full year.
Zaina Razzaq, Bachcare spokesperson, says the holiday home rental industry contributes hundreds of millions of dollars to regional economies around the country annually.
She says while latest tourism industry figures show domestic tourism expenditure increased 2.6 percent ($622 million) to $24.6 billion, holiday home rental revenue growth in the same year was up 23%.
“We know that 90% of domestic leisure travel in New Zealand is by car and holiday home rentals appeal to a segment of the local market focused on lifestyle – primarily water-based activities.
“For residential property owners, particularly those in coastal regions that are within driving distance of large urban centres, this has provided a growing opportunity to supplement their income.
“According to our data covering over 2,300 holiday homes, the regions that earn the highest average income per booking during the summer are Abel Tasman/Nelson, Raglan, Wairarapa and Northland – followed by the Coromandel.
“At a town level, the highest income per booking are found at properties in Hahei, Mt Maunganui, Whitianga, Waihi Beach, Pauanui, Matarangi and Mangawhai Heads.
“If we look at the top earning property as an example of what appeals to domestic travellers, the primary drivers behind its high rental returns are its location, capacity and quality. The property has uninterrupted sea views, four bedrooms, two bathrooms, sleeps up to 10 people, and offers additional amenities such as free WiFi,” she says.
Razzaq says despite the reopening of borders and international travel for the coming year they are forecasting further annual growth.
“We know there will be a segment of the market looking to travel overseas but early indications from forward bookings are that this will be another bumper year for holiday homeowners and regional tourism.
“As an example, the start of the current school holidays have seen us reach 97% capacity – which meant a higher volume of bookings than New Year’s Eve a year ago.
“With many Kiwis choosing to holiday locally and an expected influx of international tourists later in the year we are expecting higher demand than ever for holiday home rentals.
“At peak times like this, there is a shortage of supply and we are actively looking to expand the number of properties we manage,” she says.
Razzaq says average rent per booking, a revenue management success metric which optimises owner income, was up 6% year on year, up 17% compared to 2020, and up 15% compared to 2019.