However, hotel investment around the country has nose-dived, from $450 million in 2010-11 to just $75 million during the past 18 months.
Unsurprisingly, with Christchurch's housing and accommodation shortage, its hotel occupancy rates are the highest, as are its average nightly rates, at $160.
Data released by the New Zealand Hotel Council for the five months to May showed hotel occupancy was up 4% at 75.5% across all major regions, compared to the corresponding time a year ago, and revenue was up almost 10%.
Colliers International national director of hotels Dean Humphries said Christchurch retained the top spot with more than 84% occupancy, Auckland was a ''standout'' with 81.5%, while ''stagnation'' in Queenstown and Rotorua was turning around, largely due to visitors from China.
''For the first time in many years, hotel performance in all major New Zealand cities is now growing faster than in Australia.
''This is a reflection of a slowing down in the Australian economy against a recovery in ours,'' Mr Humphries said.
Queenstown and Rotorua were showing encouraging signs of improvement after a period of stagnation, as the inbound tour markets, particularly China, recovered and started to absorb the business lost from the traditional markets of Europe, the US and Japan.
''Chinese visitor numbers were up 38% in 2012,'' he said.
Hotel investment was well below the volumes during 2010-11, when $450 million of hotel assets changed hands.
''The hotel investment cycle has tapered back in the past 18 months, with only $75 million in assets having changed hands, most notably the Hilton Auckland.
''There have been no major sales in 2013, as investors retain assets on the back of strong forecast earnings across the country,'' Mr Humphries said.
However, there remained strong investor appetite for New Zealand hotels, when comparing international prices.
Mr Humphries said Asian hotels were now reaching prices of more $1 million per room, on yields of just 3%-4%, while five-star Sydney hotels were fetching $550,000 per room, on yields of 6% to 7%.
''Compare this with New Zealand where hotel investments are more affordable, selling at between $150,000 to $300,000 per room and yields of around 8% to 10%,'' he said.
''With hotel values on the rise, we may see investors reviewing their options.''
While some would look to take advantage of the capital gains which would inevitably occur during the short to medium term, others might contemplate hotel divestment.
''This has certainly been the case in Australia, where funds and other investors in key cities continue to sell off assets at significant premiums to the values seen two to three years ago.''
There had to be ''significantly more growth'' in average New Zealand room rates, one of the lowest in the Asia Pacific region, before new hotels became financially viable in most New Zealand cities, he said.
He noted the average room rate in most Australian cites was about $200. New Zealand's average rate was less than $140.
The planning of integrated convention, exhibition and leisure centres in Auckland, Christchurch and Queenstown could be the catalyst for a new wave of hotel accommodation in those centres, Mr Humphries said.
Christchurch had not only retained the top spot in the country with occupancy at 84.4%, its average room rates across all its three-star to five-star hotels hit the highest ever achieved in any region, $160.
Later this year in Christchurch, more than 500 rooms will re-enter the market, including the new 138-room Rydges Latimer Hotel and the 155-room Novotel Christchurch. In Wellington, a new 140-room Sofitel is under construction.
Mr Humphries said in Auckland, which had 81.5% occupancy and 10% revenue increases, demand and growth had strengthened across most sectors. That included meetings, incentives, conferencing and events, free independent travellers, corporate and tours.
