More beds needed to maintain appeal

Accommodation is in hot demand in Dunedin and one provider says it may be time for more motels to open in the city.

A triple whammy of Valentine’s Day, a Super Rugby Pacific match at Forsyth Barr Stadium and students returning to the city into flats and residential colleges led to a sell-out of motels in the city. Chinese New Year also started on Sunday and more Chinese were travelling this year as the new year holiday was slightly longer.

Alexis Motor Lodge owner Cyril Coombe, who is also the president of the Otago Motels Association, said, though it was just his personal opinion, maybe the city needed another motel to stem the shortage of beds.

When asked when the last family-friendly motel was built in the city he thought it would be at least 20 years.

The Ebb Dunedin had been built more recently but that was a slightly different motel to the ones many people preferred. Other motels have also been built but not many of the owner-operated family-friendly type.

"But it just comes down to investor confidence, and is there investor confidence there, because someone’s got to put up a few million dollars. And it’s quite a big piece of money and it takes a while to get the return," he said.

"But certainly a lot of times of the year, the need is there. There is demand and it is strong demand at times. It probably is at a capacity, but in some cases, are we putting the cart before the horse?

"People are waiting to see what happens with Christchurch. I mean, if Christchurch, and its stadium, has an effect on Dunedin getting no tests that might erode confidence in doing some accommodation."

He said though there had only ever been one test a year in Dunedin which meant it was only one weekend of the year and no-one was going to build a motel for one busy weekend in a year.

The health system appeared to be sending more people around certain parts of the country for specialist surgery.

"A lot more people are coming for treatment. We usually have people from Christchurch coming down here, because they do specialist back surgery here, that they don’t do in Christchurch."

" If they’ve got a partner or someone coming they’re needing accommodation."

He also pointed to the closure of Oamaru House late last year which used to house families when people were having treatment in Dunedin Hospital. Those people now had to find accommodation and stay somewhere.

During a quick wander round Dunedin yesterday there were plenty of "no vacancy" signs.

Enterprise Dunedin destination manager Teresa Fogarty said as visitor numbers increased the city needed to have adequate accommodation for our visitors to ensure it held appeal as a city.

"We know that currently during large events, and over peak visitation times, visitors can struggle to find accommodation here, particularly at diverse price points," she said.

Anecdotally Enterprise Dunedin heard from accommodation providers that during peak summer there was often capacity in the city, with Dunedin’s peak occupancy coming in late summer and early autumn when bed nights were always high.

Accommodation data showed an average occupancy rate of 61% across 2025.

November, February and March were the busiest months with 70-77% occupancy.

Off-peak was always a challenge, in particular winter months, but she said it was ironic that was when the weather was more settled and wildlife was more active.

There had been some promising recent developments with the reopening and refurbishment of Dunedin House Boutique Hotel, and the forthcoming reopening of the holiday park in Kaikorai Valley. Negotiations to get hotels to Dunedin have come and gone over the years.

Direct flights between Dunedin and the Gold Coast have had an impact on visitor numbers, she said, with many Australians coming to the city.

Domestic flight costs are sometimes seen as a deterrent for the city but Dunedin Airport and Air New Zealand were discussing the issue, she said.