Heather Shotter: We cannot afford to delay centre

An artist's impression of the SkyCity convention centre, as seen from Wellesley St.

Opinion

Economic benefits of convention facility should outweigh arguments about funding, writes Heather Shotter.

It is widely acknowledged that international convention centres are essential elements that contribute to the growth and development of big cities. Not only do they bring substantial economic benefits, encouraging international business delegate expenditure during the tourism off-season, but if done well, they are pivotal to promoting the unique character or brand of a city to a wide range of international audiences.

But like any large pieces of infrastructure, convention centres come at a considerable cost.

All over the world, other large cities have acknowledged this and their governments see value in funding convention centres, either fully or with partial cash injections, because of the other economic benefit that they drive.

Centres in Sydney, Melbourne, Singapore, Kuala Lumpur and Hong Kong were all constructed as part of comprehensive developments where the government and private sector have worked together to develop world-class conference and exhbition facilities.

The private sector partners were given opportunities to develop and sell commercial properties such as retail, office, residential and hotels around the centre for private gain.

The Sydney, Kuala Lumpur and Hong Kong building facilities are fully owned by the government while Melbourne's marketing and events management operations are run by the state.

To keep pace with progressively increasing population and modern demands, the costs associated with convention centres keep advancing. That's to be expected. Which is why in Australia, state governments are re-investing heavily in updating and expanding their convention centres to continue to reap the considerable benefits of the lucrative international convention centre circuit.

Adelaide is spending nearly $400 million to upgrade the Adelaide Convention Centre to "re-establish Adelaide as one of the premier conference destinations in the world", according to Infrastructure Minister Stephen Mullighan, and bring $4.3 billion worth of tourism and related economic activity to the state over the next two decades.

Currently closed, the Sydney Convention Centre at Darling Harbour will have a major transformation, due for completion next year. Business Events Sydney says an updated venue has become an imperative to ensure Sydney can compete with other destinations, particularly those in the neighbouring Asia Pacific region.

It says business events deliver enormous benefits to Sydney, attracting visitors and fuelling the visitor economy. "They also help to drive our knowledge economy, creating international networking opportunities, encouraging trade, investment and skilled migration, and enhancing our local education offerings, benefits that are long-lasting and far-reaching."

In October last year, the Victorian State Government and the Melbourne Convention Centre Bureau announced plans to expand the Melbourne Convention & Exhibition Centre (MCEC).

The MCEC hosts many events the bureau secures and in 2013-2014 alone hosted three major international association conferences generating around $185 million in economic contribution to the state.

According to the bureau's research, the average amount spent every day by each convention delegate is $A1019 ($1092). And for every taxpayer dollar, it provides an additional $A25 for the state.

With all the development occurring on Auckland's doorstep, the time for debate about Auckland's convention centre is over. Let's not go backwards. We must move on and keep our eye on the prize. Auckland needs an international conference centre now. We cannot afford to delay.

Standing still while we argue where funding is coming from means turning our back on a huge opportunity.

Nor can we compromise on size. Reducing the scale of this development will only mean turning business away.

It is not unreasonable to expect central and local government to contribute to the construction or operation of an asset that provides benefits to the whole economy, as other countries have long recognised.

10 reasons why centre must go ahead now

• Auckland needs an internationally competitive national convention centre to support the growth of the business events industry and tourism-related activity.

• In 2013, the business events sector contributed $236 million of direct spend to the Auckland economy. According to Auckland Tourism, Events and Economic Development, the figure is forecast to reach $430 million by 2023, underpinned by the convention centre development.

• According to a study by the New Zealand Institute of Economic Research in June 2011 the convention Centre is expected to generate $90 million of economic value
annually.

• It will create 1000 construction jobs during building and up to 800 jobs ongoing.

• Business event delegates are high-value visitors who deliver strong economic returns; they have a long length of stay, often visiting during the tourism low season.

• An international convention delegate spends about $343 a night, more than double the average spend a night for all international
visitors.

• An internationally competitive convention centre will ensure Auckland gets on the lucrative convention rotation circuit to generate repeat business. At present Auckland misses all convention opportunities in excess of 1000 delegates.

• It will attract incremental business to generate economic benefits beyond the centre - global expertise, knowledge transfer, creation of educational opportunities. It will enable Auckland and New Zealand to profile its innovative people and products to the world.

• The additional tax will help support Auckland's community facilities like hospitals, schools and recreation facilities. The NZICC will have a catalytic effect on other new visitor infrastructure developments in Auckland.

• It will help build a strong New Zealand economy. The international investment community is attracted to strong economies.

Heather Shotter is the executive director of the Committee for Auckland and a former executive of SkyCity Entertainment.