With the high cost of land, construction and operating costs of a new builld hotel of this size are too expensive now. This would explain why other large projects have not got off the ground. Lucky that the Distinction is being repaired as well. Still no news on the old Noahs Hotel still stuck in insurance disputes.
I'm just speculating, but I took it to mean that because of the low demand for hotel nights during the winter months in Christchurch, it's currently not financially viable to build a hotel from scratch due to the immense investment required not really paying off with that few level of demand for many months of the year - not so much the high construction/land costs being too expensive. However, with the Convention Centre alone, the demand during winter will increase substantially. When this opens and more events come to Christchurch during winter months (with the stadium/arena), then building big hotels will be financially viable. Thats whats happening currently, with sites being snapped up for big hotels (e.g. Old Press site) with construction and opening being timed with when the Convention Centre opens.
