The performance of the New Zealand hotel industry is improving strongly, with record occupancies and room rates
currently being achieved. The outlook for continuing growth in hotel demand is strong, especially in New Zealand's
main visitor destinations. There is a need for new hotel investment, especially in Auckland and Queenstown, and the
various hotel projects which are under development and currently planned will not provide sufficient new rooms to
meet expected demand. But, although room rates are rising reasonably strongly, New Zealand room rates are
generally cheap by international standards, and not yet high enough to make most new hotel projects financially
viable.