Flagship Wellington convention centre underperforming, after being seen as a success story by council

Wellington City Council commissioned a review to investigate what improvements can be made on the convention centre's fiscal sustainability. Photo / Mark Mitchell

A challenging economic environment, a “shrinking economy,” tighter fiscal restraint on government spending, and a reduction in business-related travel are all ingredients in the recipe to flagship Wellington convention centre Tākina’s underperformance.

The convention centre opened in June last year. At the time, it was described by the city council as the “most significant new building to open in Wellington since Sky Stadium was built two decades ago”.

The building cost about $180 million, and was estimated to contribute $44 million a year to the local economy.

Tākina’s net position was down $1.2 million compared with the budget.

Wellington City Council economic wellbeing manager Anna Calver said “much has changed” in the economic world since the business case for the centre was approved in 2018, and its operating model was agreed in 2021.

“A reduction in business-related travel, high inflation resulting in cost escalation and a drop in discretionary spending has impacted Tākina along with the broader venues market. With around 50% of all government events being held in Wellington, more constrained central government spending is also having an impact,” Calver said.

The convention centre opening was described as a game-changer by Mayor Tory Whanau.

At the time, Wellington Chamber of Commerce chief executive Simon Arcus was confident it would be a success story, and a win for businesses struggling out of the pandemic.

Arcus said the city would be busy, and “people will want to visit”, with a view hotels would see more interest, and shops, including high-end retailers, would pop up nearby as a result.

In an interview, Calver said the convention centre was built as an “economic enabler”.

The Wellington City Council said in its first year of operations, the convention centre held 127 events and two public exhibitions. It was said the convention centre was “not achieving” targets set out in its business case, with lower-than-forecast revenue across several years.

A review was commissioned, following conversations with event manager Te Papa, to see how the city council could improve the commercial viability of the convention centre.

Calver told NZME events had higher labour and food costs, and some exhibitions had not performed “as robustly as we’d hoped”.

She maintained the convention centre was positive, saying it was a “rare bit of fantastic news for Wellington”.

The city council will investigate how it can operate in a more affordable way. The council is planning on discussing “alternatives”, says Calver, on a potential restructure.

On the struggles of the convention centre, Arcus said it was “early days” for the site’s operations.

“It’s a superb building and people seem to really like it,” he said, adding people had worked hard to get the site going.

“We have encountered some pretty challenging economic times recently,” he told NZME.

Arcus suggested the marketing strategy of Tākina could improve, in a way similar to Christchurch’s Te Pae, which had been “very aggressively marketed”.

He said there was “no doubt” economic cutbacks and changes were having an impact, but he was confident the city would rise out of the rough.

“It’s a beautiful building and there are plenty of opportunities to use it. I do think that if we could market it better to the world, we’d be in a better place.”

Azaria Howell is a Wellington-based multimedia reporter with an eye across the region. She joined NZME in 2022, and has a keen interest in city council decisions, public service agency reform, and transport.