Tough targets set for Auckland events

By Ben Chapman-Smith

Major events like the Auckland Marathon will be expected to deliver bigger economic returns for the city over the next decade. Photo / Steven McNicholl
Major events like the Auckland Marathon will be expected to deliver bigger economic returns for the city over the next decade. Photo / Steven McNicholl

Major Auckland events like the V8 Superseries will need to grow considerably in the coming years in order to meet ambitious economic targets set by Auckland Tourism.

Auckland Tourism, Events and Economic Development (Ateed) expected its major events portfolio to return $30 million to the local economy in the next year and that target figure would push out to $80 million by 2021.

Event organisers were being constantly pushed by Ateed to stretch their boundaries and come up with new big ideas that would attract better crowds and sponsorship deals, said Jennah Wootten, Ateed's head of major events.

"Obviously our targets do increase so we need to be finding events that are either bigger and performing more significantly, or we need to see events within our current portfolio continuing to grow.

"Any city that's delivering major events wants to see things improve and change, and I'd put us in that category."

Wootten said the annual targets Ateed expected events to meet were "really ambitious".

As well as the economic benefits, it wanted to see the numbers of visitor nights hit 95,000 in the 2012/13 year, that number growing to 250,000 in 2021.

Auckland had a total of 55,000 visitor nights in the 2010/11 year.

Reaching those targets would require Ateed to get the right mix between its baseline portfolio of events and bigger one-off events, Wootten said.

"We need to invest into events and properties to get the right returns, but our investment needs to be far smarter.

"We're going to have to work really carefully as the years move forward around how many events we need to meet those targets and we may end up needing to invest more in fewer to get those return levels right."

Each event granted Ateed funding had tight key performance indicators to meet in the contracts.

"We're saying, 'for this level of investment, we need to be seeing you delivering this amount of regional return on investment, this many visitor nights, this much international exposure'.

"And each year, we will need to see that continually improve."

For the 2012/13 financial year, Ateed received 86 applications from major event organisers for a total of more than $19 million in sponsorship funding

"When we are going through these processes, we do have to be really strict around what criteria we're using and how many events we can and can't support," Wooten said.

Ateed's major events baseline sponsorship fund was $2.25 million and it chose to allocate this across a total of 22 events from the 86.

These included the International Film Festival, Auckland Marathon, Contact Tri-Series and next year's International Comedy Festival.

The magic number of around 20 to 25 baseline portfolio events "seems about right", Wootten said.

Although the window for applicantions had closed, Ateed could also consider securing other "one-off" events, she said.

Ateed had upped the ante since 2007, bidding more aggressively for and securing major one-off events such as the Rugby World Cup and the Volvo Ocean Race Stopover in March this year.

Last year the city hosted the ITU Triathlon World Cup for the first time, an event set to run annually.

Amid controversy, Auckland Council voted in favour on July 4 of hosting the return of the V8 Supercars to Pukekohe raceway. That will cost ratepayers $10.6m over five years, with another $2.2m to come from Government taxpayer money.

Ateed announced last week that Auckland would host a new annual Ironman 70.3 championship from January 20.

The Council had produced a ten-year Major Events Strategy outlining exactly how it planned to enhance the city's brand through tourism.

Part of that involved coming up with a benchmark method for measuring the economic benefits an event would have for Auckland, called the Regional Return on Investment.

"We worked with Covec to develop this measure, which essentially tells us the new money coming into the Auckland economy which wouldn't be happening if the event wasn't taking place," Wootten said.

She said these types of measures could be "very complicated" but she was confident in the Regional Return on Investment's accuracy.

Ateed looked at whether an event would help develop local industries, such as the marine industry on the back of a yachting regatta.

It also considered whether the event would generate long-term legacy benefits to the city, like increasing and improving public transport usage or infrastructure.

Massey University economics lecturer Sam Richardson said the main question that should be asked when councils or the government look at funding major events is whether it is good use of taxpayer money.

Richardson suggested that public spending on major sporting events is too often justified by projected short-term economic impacts, rather than long-term benefits.

"Economic impacts are often overstated and costs tend to be understated," he said.

"There are so many cases where you don't see increases in local GDP, employment or wages.

"What we should be looking at is whether the event is benefiting the host economy and how. I'd rather look at what happens after the event is over."

Richardson also said it might even be helpful to look at the non-economic benefits of an event.

"Rather than looking at the economic impacts, there's probably more sound rationale to looking at what other benefits there are like the enjoyment they bring."

Alongside economic returns and visitor nights, Ateed's strategy also looked at achieving a number of softer measures around attendance, livability, and enjoyability of events, Wootten said.

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