Accor lifts presence in Christchurch

By Chris Hutching

Friday 8th October 2004

A Christchurch heritage property, known as the Public Trust building on Oxford Terrace, will be developed into a Mercure Grand Hotel after a deal was finalised between hotel operator, Accor, and the Benjamin Gough Family Trust.

Accor recently announced that it was also negotiating with other developers including David Henderson to develop a three-star Ibis-brand hotel and a four-star Novotel hotel.

The Gough family trust bought the Public Trust building in 2001 for $2.65 million after the previous owner was unsuccessful in negotiating changes to the appearance of the building because of heritage interests. The Goughs are substantial property owners who feature in the National Business Review Rich List.

The four-level building will be redeveloped to include a grand lobby, restaurant and bar, function rooms and bedrooms.

A new tower for 120 more hotel suites and meeting rooms will be built behind the building on a vacant site where another old building owned by the Goughs was fortuitously burned down by arsonists a year ago. Construction of the hotel is scheduled for early 2006.

The new hotel will add to Accor's 16 hotels and four base backpacker hostels in New Zealand operating under the Sofitel, Novotel, Mercure and Ibis names. Accor general manager New Zealand Neil Scanlan said an increase in international and domestic flights to the city, as well its popularity as a convention destination had lifted demand for more accommodation.

Horwath Asia Pacific director Terry Ngan confirmed occupancies had been steadily rising from an average 57% in 2000 to 63% this year.

Although the occupancy level looks healthy, room rates are likely to come under pressure if all the proposed hotel plans in the city come to fruition too soon.

According to Statistics New Zealand, the yearly capacity of commercial accommodation in the Christchurch and Canterbury region is approximately 5.3 million rooms with a market share of approximately 12% of total commercial accommodation available in New Zealand.

The Christchurch and Canterbury hotel market comprises approximately 1.4 million rooms and reflects about 27% of the total commercial accommodation market in the Christchurch and Canterbury region.

The supply of new rooms includes 60 rooms to be built next year at the Outrigger at Clearwater Resort and the introduction of the Quest Christchurch in the Cathedral Junction development near Cathedral Square.

Total international and domestic visits to Christchurch were forecast to grow at an annual average rate of 3.8%, Ngan said.

He expected that Christchurch may experience stronger visitor arrival growth because of increased transtasman capacity with the entry of Pacific Blue and Emirates and increased services by Korean Air and Singapore airlines.

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