From Full to Empty: What the Emergency Housing Drop Means for Hamilton’s Accommodation Scene
By Scott Mears - Aspire PRO Enterprises
Hamilton used to be the epicentre of emergency housing in New Zealand. Motels were packed, funded by government grants, with Ulster Street earning the nickname “Motel Mile.” But in just 12 months, the number of households in emergency accommodation has dropped a staggering 84% nationwide and even more dramatically in Hamilton.
This shift, driven by tighter government criteria and a clear policy push to reduce reliance on emergency housing motels, is having a big impact - not just on the people being rehoused, but also on Hamilton’s entire accommodation sector.
Motels Are Feeling the Pinch
Motels that once charged $250 per night are now struggling to fill rooms at $100 to $150. Occupancy rates have plummeted, with many operators facing empty rooms, rising costs and the lingering reputation damage of having been linked to emergency housing.
Some have spent over $100k on renovations to shake off the stigma - including deep cleaning and even meth decontamination. But with corporate travel slowing and tourism still on the mend, it’s a tough climb back.
So What About STRs?
Short-term rentals (STRs) in Hamilton are now competing in a market that suddenly has a flood of vacant motel and hotel rooms, some offering rates well below pre-Covid levels.
But here's the silver lining: the STR model is still better placed to adapt.
Flexibility wins – STRs aren’t locked into fixed nightly pricing. You can adjust for market demand, target niche audiences and optimise for long stays or weekend getaways.
Guest experience matters – Unlike motels struggling with reputation hangovers, well-managed STRs with strong reviews and consistent quality can still command a premium.
Diversification is key – STR investors with properties in areas not previously dominated by emergency housing (like lifestyle suburbs or near event venues) are likely to see more stability.
What Comes Next?
The days of guaranteed government occupancy for motels are over. That means a more competitive market, but also an opportunity for STR owners to claim market share by offering a better, more personalised experience.
With demand shifting back to quality and flexibility, now’s the time for STR operators to:
Polish up listings and reviews
Reinvest in standout guest amenities
Target corporate stays, families, and relocators
While Hamilton's motel sector is in recovery mode, STRs are in growth mode with studies showing Hamilton needed another 595 extra hotel rooms and serviced apartments by 2033, and that’s a far stronger position to be in.