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Home / Hawkes Bay Today

Winery boss fears Hawke's Bay could gift tourism to other regions

By Roger Moroney
Reporter·Hawkes Bay Today·
6 Apr, 2018 11:00 PM7 mins to read

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Craggy Range CEO Mike Wilding fears the Bay will gift tourism to other regions if funding cuts are made. Photo / File

Craggy Range CEO Mike Wilding fears the Bay will gift tourism to other regions if funding cuts are made. Photo / File

Craggy Range winery in Havelock North is an award-winning tourism venue, so CEO Mike Wilding cuts to the chase when the subject of the Hawke's Bay Regional Council's pursuit of cutting back funding to Hawke's Bay Tourism comes up.

"Hawke's Bay tourism has great momentum….why gift that to other regions?"

He was also quick to praise the work of the tourism crew, describing them "a world class team, with a clear strategy, delivering tangible results across the board".

Mr Wilding said the industry was "extremely fortunate" to have an experienced regional chairman and general manager leading HB Tourism.

"To have both the former CEO and a senior country manager of Tourism NZ is a dream come true for any tourism region," he said.

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"Between them, they have created a clear strategy, built enviable relationships and consistently delivered on all their targets."

He believed ratepayers were getting an "outstanding return" on their investment, and dropped in a warning.

"Without sustaining appropriate funding, we will likely be gifting our talent, market share and years of hard work to other regions."

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Mr Wilding said tourism was New Zealand's biggest export and Hawke's Bay needed to continue to invest in order to get its share of the pie.

He said before derailing the momentum the Hawke's Bay Regional Council and Hawke's Bay Tourism had created over the past few years it was important to understand the full impact and opportunity cost of halving the region's investment in growing its tourism income.

He posed several questions and points he said people needed to know the answers to.

● 1: Why should the community contribute to regional tourism funding?

"Simply put, tourism touches the whole community — throughout New Zealand and abroad, the only sustainable tourism funding model is a council-led approach.

"Our visitor economy in Hawke's Bay is made up of multiple layers and contributes to thousands of businesses within the community in the form of direct spending of $630m [on accommodation, attractions, cafes etc] and indirect spend [on fuel, supermarkets, pharmacy, doctors, retail etc].

"In fact indirect spend is estimated to account for 67 per cent of all tourism spending, which is why it is typical for the lion's share of tourism promotion to be council [ratepayer] funded."

Mr Wilding said the Hawke's Bay Regional Council's increased tourism investment had created 880 new jobs over the past two years, many of which were taken up by school leavers and young people.

● 2: If we take the investment away what will happen?

"Basically, we will lose visitors. Why? Because no other region in New Zealand is intending to reduce their spend — in fact many are increasing theirs," he said.

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"Take our biggest regional competitor, Queenstown. They spend $3.5 million compared to our $1.8m per annum."

Mr Wilding said if Wanaka was added to Queenstown their spend increased to $4.4m.

"While this is already a significant investment, they plan to increase this number by a further $112,000 next year"

He described it as a proven model.

"Tourism investment stimulates growth, while cutting investment in regional promotion leads to contraction in international and domestic visitor numbers, lower regional GDP through reduced spending and loss of jobs."

Mr Wilding said for Hawke's Bay, it should not be forgotten that there was also a positive spin-off from attracting domestic visitors.

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"I personally know of a handful of people who have moved their businesses to Hawkes Bay over the last few years.

"This was because they attended events like F.A.W.C. and the Art Deco Festival and fell in love with our region — not just because they ate a Hawke's Bay apple or potato, or drank a bottle of Hawke's Bay wine!

He said the bigger businesses like Craggy Range would feel much less impact from any reduction in tourism funding, as in its case over 80 per cent of its revenue actually came from its wine exports.

"But sadly, it is the hundreds of smaller businesses who get a higher proportion of their revenue from tourism either directly or indirectly, that will suffer the most.

"It is unreasonable to expect them to fund the effort to attract visitors to Hawke's Bay when their focus is quite rightly on investing in wowing visitors with great experience once they're here."

● 3: Partnerships and sponsorship would diminish because they are based on co-investment.

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"Without regional leadership, partners like Air New Zealand may shift their investments to regions that are funding tourism events and activities alongside them.

"Make no mistake, all investment partners look for 'win/win' funding as with events like the Air NZ Marathon, Art Deco and F.A.W.C.

But without significant regional investment, those partners will shift their funding to other regions who will invest alongside them."

Mr Wilding pondered whether or not the Hawke's Bay Regional Council had spoken to Air NZ, Tourism NZ other key partners to quantify the "ripple" effect of a reduction in partner funding.

"Due to a simple compounding impact, Hawke's Bay's reduction in tourism investment could end up being far greater than HBRC's reduction.

"With the regional council's goal in their long term plan to invest $30m in tree replanting over the next 10 years, do we think Air New Zealand will prioritise Hawke's Bay for investing through their new private afforestation fund, if the regional council cuts tourism spending?

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"What is the opportunity cost of that? I would hazard a guess it could be more than the tourism spend cut."

● 4: Media, international tour agents, and tourism influencers want a single point of contact for the region.

"Media, tour agents, feeders and influencers are looking for a single contact point to engage with for the region.

"They expect the regional tourism office to co-ordinate and plan their famils and co-ordinate with local tour operators and regional heroes to fund the majority of their stay in exchange for lucrative exposure."

He believed that in the absence of a "well-resourced" Hawke's Bay Tourism they would likely have no interest in or time to contact individual tourism operators and many would simply move on to the next tourism region in NZ who would "welcome them with open arms".

Mr Wilding also posed the question that would creating a progressive saving, which he said the ratepayer would not see, of between 8c and 25c a week really be "worth the risk?"

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He believed very few people "if any" would deny that Hawke's Bay has ever had a better tourism organisation than it had today.

"The evolution from a plethora of fragmented and unproductive interest groups, to a focused and results-driven industry body has been monumental for Hawkes Bay," he said.

"I and many others have no interest in throwing that away and explaining to our next generation that we 'killed the golden goose' in order to reallocate between 8c and 25c a week to another cause."

He said the path should instead be to consider taking an extra 8c to 25c a week from this ratepayer and invest it into becoming one of New Zealand's leading tourism regions.

"Delivering the region a tangible, sustainable return on that money along the way.

"I support the other investments being made by the regional council in their long term plan and I especially applaud the leadership they are showing in our environment," he said.

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"However, why does restoring our environment need to come at the expense of the economic benefits of tourism growth?

"This doesn't need to be an 'either, or' choice, especially without first quantifying and communicating the full impact and opportunity cost of a 50 per cent funding cut to tourism."

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