Why luxury lodges are leading the hotel pack in New Zealand and Australia

CBRE research reveals New Zealand luxury lodges are outperforming the broader hotel market, driven by affluent travellers and unique experiences. Luxury lodges have emerged as the strongest performing sector of the New Zealand and Australian hotel market, buoyed by robust demand from affluent domestic and international visitors, new CBRE research has shown.

A CBRE analysis of seven lodges across both countries shows that total revenue per occupied room has risen 59% since 2018 (pre-COVID), with margins up 54%, supported by a global rise in the number of high-net-worth individuals (HNWIs) and an increased desire for unique experiences.

Luxury lodges offer curated, holistic experiences, exceptional dining and wellbeing offerings. Prominent New Zealand examples include Huka Lodge in Taupō, The Lindis in the Ahuriri Valley, and Matakauri Lodge near Queenstown—each offering immersive access to the country’s dramatic natural landscapes and cultural richness.

CBRE Hotels Director New Zealand, Peter Hamilton, said: “New Zealand is highly regarded globally for the quality of our Luxury Lodges. Properties such as Huka Lodge, Blanket Bay, Kauri Cliffs and Wharekauhau are regularly ranked amongst the world’s best lodges with renowned scenic beauty matched by high quality properties and service. The growth in demand for lodge stays has driven strong income growth in these properties in recent years.”

The expansion of luxury tourism has propelled the luxury lodge sector and underpinned a rapid post-pandemic rebound following years of pent-up demand.

CBRE Research Analyst Katya Ezhova said, “While luxury travel demand is strongest in the 40 to 50-year-old age bracket, there is also a broadening demographic of aspirational luxury travelers, many of whom are Millennials or Gen Z. This cohort is increasingly willing to allocate a considerable portion of their financial resources toward premium travel experiences.”

“The strength of traveller demand has elevated luxury lodges to be the most profitable hotel sub-sector, with steadily rising global wealth, increased disposable incomes and a growing demand for unique and personalised experiences creating a fertile environment for the luxury tourism sector to flourish,” Ms Ezhova added.

CBRE Hotels’ Senior Director Tom Gibson said luxury lodges offered world-class hospitality and were typically defined by their exclusive settings in unique, awe-inspiring destinations. In New Zealand, this includes alpine retreats, remote coastal sanctuaries, and wilderness lodges nestled in national parks. As such, the barriers to entry were exceptionally high, with only a handful of transactions occurring over the past decade throughout New Zealand and Australia.

The lodges analysed by CBRE have an average room count of only 21 rooms, highlighting the importance of striking a balance between restricting guest numbers for genuine exclusivity and maintaining enough capacity for streamlined operations.

With bookings generally occurring three to six months in advance of stays, Mr Gibson said luxury lodges were significantly de-risked and had proven to be more attractive operationally than traditional hotels and resorts, enabling owners to exercise careful cost management—supporting higher profit margins.

“Lodges that deliver a luxurious product, exceptional hospitality and offer exclusive access to world-class, curated experiences, have the ability to command room rates without resistance from guests,” Mr Gibson said.

From an investment perspective, CBRE’s report highlights that offshore capital currently prevails in New Zealand’s luxury lodge market.

Ownership remains largely in the hands of private investors, and there is growing pool of capital from international buyers, particularly from the USA and Asia. This reflects the country’s appeal as a safe, stable, and high-quality tourism destination.

Mr Hamilton noted that New Zealand’s dynamic tourism sector, stable and transparent market, and conducive investment conditions were drawing more foreign capital to luxury lodges.

“There has also been a notable transition over recent years from traditional ownership models dominated by private HNWIs, to a more diverse array of investment structures,” Mr Hamilton said.

“We’re also seeing luxury lodges being increasingly viewed as alternative assets rather than purely lifestyle-driven investments, which is expected to drive heightened interest from impact funds, ESG investors and real asset portfolios.”