New Zealand cannot let the New Zealand International Convention Centre (NZICC) planned for Auckland slip away despite the potential for cost overruns, according to a leading industry body.
Sue Sullivan, chief executive of Conventions and Incentives New Zealand, says the proposed NZICC is worth a lot more to the country than the projected $90 million it will bring in annually.
"We will lose the chance to compete in a highly desirable and lucrative space," she says of the NZICC, capable of hosting 3500 people and which includes a public gallery entrance from Hobson Street, a dedicated 3000-seat theatre and an exhibition floor the size of Eden Park's rugby pitch. A pedestrian laneway between the centre and a new hotel also being built by Sky City will run from Hobson Street to Nelson Street, featuring bars, restaurants and boutique shops.
"Not only will it be a world-class facility, we believe it will enable New Zealand to compete for large conferences that have previously not been coming to this country - worth a lot of money to Auckland and New Zealand," says Sullivan.
The convention centre has been the subject of controversy, first because of the Government's decision to grant Sky City extra gambling concessions in return for building the NZICC; then again late last year when cost increases saw the budget rise, from the $402 million Sky City agreed to spend, to $470m or more. The suggestion that taxpayers or Auckland ratepayers should help bridge the funding gap was not a preferred option for the government nor Auckland Council.
However, Sullivan says most people do not realise the high stakes involved in the boosting of the conference industry here or that public funding of the MICE industry (Meetings, Incentives, Conferences and Exhibitions) is common overseas.
"Our biggest competition is Australia," she says. "They are able to host big conferences of 2000 and 3000 people that we can't because we don't have the right venue right now; we can't host any more than 1000 at the moment. And what is Australia doing? The venues there - Sydney, Melbourne, Brisbane, Adelaide - get subsidies of about A$5-$8 million every year from state governments; now some are expanding the size of some venues to 5000 people or even 8000."
New Zealand is trailing in attracting big conferences, hitting the ability to rake in more tourism dollars. Business event visitors spend, on average in New Zealand, twice as much as ordinary international visitors; they are the desired darlings of tourism bodies worldwide.
In the latest figures available (year to June 2014), New Zealand attracted 57,000 MICE visitors, drawing in almost $500m. Compare that to Australia (1 million such visitors, $2.7 billion in spend; 2012 figures), Thailand (1 million visitors, $3 billion spent there; 2013 figures) and the acknowledged conventions king of Asia-Pacific: Singapore (175 events, 3.5 million MICE visitors and $5.5 billion in receipts, 2013).
With the NZICC able to host 3500, official estimates (from the Ministry of Economic Development, which Sullivan says are conservative) suggest that, when the new convention centre is well-established (probably around 2020), it will attract new multi-day conferences, bringing in about 33,000 extra overseas visitors. It would then bring in an extra $90m from local and international visitors and an average annual increase of $49m in national GDP - of which $23m would be an increase in Auckland GDP.
Brett O'Riley, chief executive of ATEED (Auckland Tourism, Events & Economic Development), says: "New Zealand needs a national convention centre to support the growth of the business events industry for Auckland and New Zealand.
"The NZICC is pivotal to ATEED's Auckland Convention Bureau achieving the growth targets outlined in the Auckland Business Events Plan - which is focused on developing a world-class business events sector that delivers...growth in the visitor economy and Auckland's GDP, more jobs and higher productivity for local businesses and increasing Auckland's international, reputation and profile."
The plan is to significantly grow the sector from the current direct spend of $236 million to Auckland in 2013 to $430m by 2023.
"I don't think people see how much we stand to lose if we can't compete," says Sullivan. "Growth in Australia is significant; they are gearing up big time and Singapore are becoming more and more aggressive in terms of recognising the value of returning conferences, rotating conferences and business which comes back year on year.
"They are able to share in conferences which are rotated around different venues in Asia-Pacific. If we have the right venue, we can get involved in that and get them down here - New Zealand tourism is red hot right now but, if you don't have the right venue for big conventions, no one will come. The benefit isn't just to Auckland - Rotorua, Taupo, Christchurch and Queenstown and many other spots will all get a spin-off. There is new research showing that business events visitors come back as repeat visitors."
Sullivan also says most people don't realise that convention centres being built in Wellington, Christchurch and Queenstown as part of the New Zealand drive to capture more MICE trade were all partly or completely funded by national or local government.
Wellington's new 2500-delegate convention centre (completed by 2017) is being ratepayer-funded, Christchurch's 2000-person centre (also to be completed by 2017) is wholly taxpayer-funded and Queenstown's (1000 delegates) has local and national government footing most of the $50m bill.
"The NZICC design has been developed with a Crown team of experts to ensure it will meet objectives set by the Crown and can win international conventions business for New Zealand," says the general manager of NZICC, Simon Jamieson. "The designers, led by Warren and Mahoney, have done a magnificent job."
"It will also revitalise Auckland; there are a number of new hotel developments now under way as a result of the NZICC. It is one of many projects reinvigorating Auckland's CBD (Britomart, Wynyard Quarter, Federal Street) and the proposed Precinct development will stimulate further progress in the Victoria Quarter."
MICE WORTH MILLIONS
(Meetings, Incentives, Conventions and Exhibition visitors)
• Singapore (2013): 3.5 million visitors, S$5.5 billion in spending
• Australia (2012): 1 million visitors, A$3 billion
• Thailand (2012): 1 million visitors, US$3 billion
• New Zealand (year to June 2014): 57,500 visitors, almost $500m
• Singapore's largest convention venue - up to 45,000 delegates
• Australia's largest venue - up to 3,500 delegates (being upgraded to 8000)
• New Zealand's largest venue - up to 1,000 delegates
Link to NZICC fly-through