Tourism catalyst for $40m Invercargill hotel scheme

Construction plans for the new hotel in Invercargill’s CBD are underway. Credit: Phillip Capper

A booming tourism market is the catalyst for a new $40m hotel in Invercargill.

The city’s licensing trust has been eyeing the opportunity to build a 80-bed hotel in Invercargill’s central business district for several years but has now committed to bringing the project forward.

Invercargill Licensing Trust (ILT) general manager, Greg Mulvey, cited the strong national tourism market and continuing spinoff from Queenstown and Central Otago as driving the economic case.

The ILT is planning to phase the development at the corner of Don and Dee Streets to initially bring forward 80-beds plus conference space and a new restaurant.

This could be followed by an additional 40-rooms if there is demand for further capacity in the future.

Venture Southland tourism team leader, Warrick Low, said the hotel was a great opportunity for the city to capitalise on a growing number of international visitors.

“Domestic visitors are our bread and butter but a brand new hotel boosts the opportunity for international visitors. We have already seen strong double-digit growth in this market.

“That’s not just those who are travelling out of Queenstown or Central Otago, but those who are on second trips here and are trying to avoid that Queenstown experience – they are looking for an authentic New Zealand experience.”

Invercargill’s visitor economy is historically 70% domestic and 30% international in contrast to neighbouring Fiordland, for example, where the market is 80% international and 20% domestic.

He added that Invercargill is now being viewed as a destination in its own right rather than just en route to popular Southland tourism destinations such as the Catlins, or Stewart Island or Te Anau.

“We can certainly see that there is now a vein of attractions for people to stay and spend time and that’s about the local business entrepreneurs and certainly also about these big ticket items that have come to fruition such as Dig This and the Classic Motorcycle Mecca.”

The new hotel is going to serve as a great avenue for attracting people to the southern city and Low welcomed the inclusion of new conference space.

“Visitors are looking for a certain standard of accommodation and this will be the figurehead of that,” he added.

It also provides welcome additional capacity for the city that was suffering from a lack of accommodation, reflecting the nationwide trend.

Low said: “In terms of demand, we know that now on any given night the capacity of accommodation is being stretched across much more than just commercial and Bed & Breakfast, this is right across Airbnb and holiday homes and Bookabach .”

Plans for the new building’s construction are underway. The ILC is expected to apply to Invercargill City Council for demolition consent to clear the existing buildings imminently.

Hospitality New Zealand Southland branch president Stephen Grieve told Stuff the announcement was a long time coming.

“The tourism numbers are effectively turning around … things are starting to stack up for the city. We are in growth mode.”

The trust would not spend $40m without it being a step to something further, Grieve added and he believed the hotel would be a catalyst for more development.

Another 80 beds in the city would mean another 80 people roaming the central business district when a large event was on, as well as providing more employment opportunities for Southlanders in the hospitality industry, he said.

“It’s a major economic boost for the city that’s been long-awaited.”

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