ChristchurchNZ setting up 'war chest' to attract lucrative events to Garden City
Tuesday, 2 August 2022
Paying incentives to significant business events is becoming more common.
Economic development agency ChristchurchNZ will set up an incentives fund, so its event bids remain competitive.
Business events offer a significant financial boost to the local economy.
Christchurch’s economic development agency is setting up a “war chest” to pay incentives to lucrative business conferences and major events that come to the Garden City.
ChristchurchNZ, which is owned and partially funded by ratepayers, currently has no money to make incentive payments.
It says topping up a new fund is required as soon as possible to stay competitive at winning “opportunities for the city”.
Tracey Wilson, the general manager of destination and attraction at ChristchurchNZ, said some events have always been paid incentives, but the practice has become “a more mainstream requirement” post-Covid for significant business events.
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This was because of the “intense competition” driven by their strong return on investment.
ChristchurchNZ says it is planning out the fund, described in one document as a “war chest”, as part of its annual business planning process.
Wilson would not say exactly how much the new fund would need, but she said Eden Park had a $10m bidding fund when it first opened, while an Australian competitor recently paid a conference $180,000 in incentives.
“Ultimately what is expended is only what we win, but we need a fund ‘pot’ to enable us to bid in the first place.”
Incentives were not offered blindly, she added.
The pot will need more money than ever before.
ChristchurchNZ is already starting to work on “mega event” bids for the city’s new $683-million dollar stadium, Te Kaha.
While the stadium is not due to open until 2026, the process of winning events can take years.
“As an analogy, building Te Kaha but then not having the budget to bid for mega events to help fill it would be like buying a new car and not being able to put fuel in it,” Wilson said.
She said business events offer a significant return on investment.
During the 2021-22 financial year, ChristchurchNZ paid $345,000 worth of incentives to 16 business events – and they generated nearly $16 million of visitor spending in Christchurch, she said.
Local hospitality operators near Te Pae, the city’s new convention centre, say business has been boosted since it opened.
Ken Pereira, Auckland Convention Bureau manager at economic development agency Tātaki Auckland Unlimited, said they spent $1.1m on 45 events in the last financial year, which delivered an estimated $25.5m of economic impact.
But, benefits extend beyond a direct GDP injection, he said. Events connect the city with the world, strengthen international networks, and puts the region “at the forefront as a destination that can host global business events”.
A 2019 report by the Ministry of Business, Innovation and Employment found international delegates spend an average of $2400 while attending a conference in New Zealand.
About 1300 to 1500 delegates will visit Christchurch in May 2024 for the five-day Royal Australian College of Surgeons conference.
Wilson would not say how much was paid to secure this conference, “because that would undermine our ability to negotiate with other event organisers”.
Still, each dollar spent would return $112 in projected visitor spending, she said. “We try to pay as little [incentives] as possible.”
Lisa Hopkins, chief executive of Business Events Industry Aotearoa, said incentive payments were there to help offset costs so that an organisation hosting an event does not lose money.
“It’s now become something that is utilised across the globe,” she said.
ChristchurchNZ has a yearly target of bidding for at least 30 business events with a 35% success rate.
In March, two ChristchurchNZ staff travelled to Melbourne, Australia for the meetings and events industry trade event AIME.
“It was a significant opportunity to showcase Christchurch and its new infrastructure and to attract business events from Australia,” Wilson said.
She said from that, an “incredibly high” number of event organisers wanted to visit Christchurch to plan events.