Rugby World Cup spending bonanza slow to take off

Irish pubs boomed when Ireland beat Australia, but not nearby businesses. Photo / Greg Bowker

The business spin-off from the Rugby World Cup is turning into a game where the bounce of the ball is crucial.

Those businesses such as bars, cafes, car rental outlets and hotels which are face-to-face with an ever-growing number of overseas fans are doing well, while those even slightly out of fans' focus are still waiting.

In New Plymouth, Peggy Gordon's bar was drunk dry by Irish fans before their first game while in downtown Auckland, metres away from the country's biggest fan zone, some businesses are surprised at the lack of turnover.

It's a case of being in the right place with the right products at the right time.

More than half the games have been played but the tournament is still to enter the business end, both on and off the field. The Auckland-focused finals fortnight is expected to bring in the bulk of the expected 95,000 rugby tourists, especially the big spenders.

Paymark card spending figures compiled to late Thursday night tell the story of how closely spending patterns follow the games geographically and by sector.

Spending in cup-related sectors - accommodation, car rental and hospitality - over the past week was up almost 11 per cent, or $9.6 million, on the same week last year. Spending in the category was up 9.9 per cent last week on the equivalent period last year.

The firm handles about 75 per cent of eftpos and credit card transactions, which in turn cover about 50 per cent of all transactions.

Paymark's head of sales and marketing, Paul Whiston, said much of the accommodation would have been paid for in advance.

Principal economist with the New Zealand Institute of Economic Research, Shamubeel Eaqub, said it would be hard to determine the true impact of the cup for up to a year, after all spending data were analysed.

Based on the rate of acceleration in card spending, he calculated during the first 10 days of the cup, retail spending edged up just 1 per cent.

"It's still very rough because you should try and separate out foreigners from New Zealanders. If it's just us spending money, it's just the same money that would've been spent anyway. You've got to try and figure out the net injection into the economy."

Gross domestic product figures released on Tuesday also showed service sector exports fell in the June quarter, suggesting deferral of travel to New Zealand before the cup, he said.

Many businesses in downtown Auckland are still waiting to see a big boost in sales as a result of the Rugby World Cup.

The Business Herald visited 10 stores on lower Queen St and in the Westfield Downtown shopping centre yesterday.

Of those, the only business that had seen a large lift in sales was Canterbury - an official sportswear retailer for the Rugby World Cup.

Ibrahim Eid, who manages a City Star Convenience Store on Queen St, said sales were up slightly - but not as much as he had expected.

"Opening night was crazy. Since then it's busier, but not so much ... I've talked to lots of people who are regular customers and they're a bit disappointed as well."

Suchi Pathari, owner of Mag Nation in Queen St, said she'd ordered more international newspapers and magazines in preparation for the arrival of fans from overseas, but sales had only risen about 3 per cent since the World Cup began.

"If anything [the RWC] has hampered us a little bit," said Glenn Peachey, co-owner of Pathridge Jewellers. "It's scared off some of our local customers - they've gone away."

He said his store targeted the top end of the market and the bulk of wealthy World Cup visitors were expected to arrive during the final 10 days of the tournament.

Canterbury store manager Scott Lambert-Vickers said business was booming, Japan team jerseys proving very popular with Japanese fans.

At Nina's takeaway on Ponsonby Rd, game days are busy and the already long hours have been extended through to breakfast time for fans hungry for fish and chips after a big night. Owner Nina Mihaljevich hired extra staff and got in a big-screen TV but was hoping for more customers.

"I thought it'd be busier. People are going where the games are."

But those playing the longer game say early signs are good. A multi-million-dollar Government effort has been put in place to leverage long-term business benefits and forge long-term relationships through hosting visiting executives.

There are scores of exhibitions and trade shows around the country tied to festivals but the business focus is on the $10-million Cloud on Queens Wharf in Auckland, which can be transformed into a super-size rugby watching venue for big games.

Midweek, a steady stream of overseas tourists and locals sauntered through the distinctive building, some killing time, others interested in the Cloud and what was on display. Thousands have already gravitated to "Taste at the Cloud" where they pay between $17 and $54 to sample New Zealand food and wine.

Most were still New Zealanders curious about the hype surrounding the building and many were surprised at the products being promoted, said Michael Barnett of the Auckland Chamber of Commerce.

Christchurch woman Margaret Gatehouse has been house-sitting in Auckland for the past five weeks. While inquisitive about what was inside, she really wanted to see the building itself.

"It's really the building we wanted to see. We'd be happy to have this in Christchurch."

Arno Oosthuizen from Pretoria is touring New Zealand for a fortnight.

"The gadgets are nice if you're into those things. We were interested in seeing [the Cloud]."

Twenty-two companies are represented in static displays, including Martin Jetpack, Sealegs and Yike Bike, complementing the big-screen presentation.

The emphasis is on innovative New Zealand, aiming to surprise with what can be done with food, wood and fibre and not reinforce the traditional primary produce message.

This is soft-sell rather than earnest company representatives hovering over potential buyers. New Zealand Trade and Enterprise representatives in the Cloud have put about 100 serious inquiries through to exhibiting companies already.

The prototype of the Martin Jetpack is attracting a steady stream. Founder Glenn Martin said he'd underestimated the response and would post someone at the display.

"We underestimated the impact of the Cloud so we're scrambling a wee bit, but we haven't had anything tangible out of it."

Ian Williams of WilliamsWarn has personal breweries selling for $6500 on display and reckons he'd sold up to three as a result of being at the Cloud. He too was going to put staff on the ground.

Aircraft engine maker Duke Engines was also displaying but chief executive Ralf Muller said there had been no serious leads.

"To be honest we wanted to support New Zealand, we didn't do it in the expectation that we wanted to get business out of this. We get our business in different ways."

New Zealand Trade and Enterprise (NZTE) project director for the cup, Bruce Gadd, said the aim was for visiting business people to consider what else New Zealand had to offer.

Through the NZ2011 Business Club, about 1650 business connections had already been made between visiting executives and their New Zealand peers.

"We understand totally that people are here on holiday enjoying a rugby tournament but when they have opportunities while they're here, then we grab a hold of them."

Last Saturday, a group of Australian aviation industry leaders jetted in on a chartered flight and met counterparts here. They left early the following morning not quite so happy after watching Ireland beat the Wallabies.

On Tuesday, more than 50 Harvard alumni were hosted at the lounge before many of them pulled on their boots the following day for a game against a Carlton Grammar side. Earlier in the week during a trip to Taupo, many had visited a clean energy centre in the town.

High-level meetings with Australian, Russian and South African politicians had also taken place throughout the country.

"Some of the most important people coming in just arrive," Gadd said. "You don't know who's coming. You have to be sensitive that most are here for a rugby tournament ... but a lot of top business leaders around the world never totally switch off."

There's been a French flavour at the Cloud over the past two nights, a large business gathering held last night.

Ariane Gonzalez, NZTE's trade commissioner in France, said an estimated 10,000 French rugby visitors were expected and business interest in the World Cup here started four years ago.

"We've had business people approach us at NZTE in Paris since the last World Cup in anticipation of the one in New Zealand," she said.

"I see the World Cup as a start to build a platform of relationships - it's just the beginning."

- Additional reporting: Christopher Adams