Tourism’s missing millions: Operator says cuts have cost Auckland

Sunday, 14 September 2025

Auckland’s events and marketing agency has spent the last six years battered by change and budget cuts, and now the city is struggling to pull itself out of the recession. One tourism operator says the two are connected. Amelia Wade reports.

It was a bit like speed dating for the North Island tourism businesses selling their appeal to Australian buyers. They each had seven minutes to make their pitch before the buyer moved on and another took their place for the seller to repeat the same sell again. And again. And again. All day.

More than 70 operators banded together as Kiwi North and travelled to Sydney and Melbourne last week to attend back-to-back events in the hope of lifting visitor numbers to the North Island by 1-2%.

And there’s cautious optimism the effort was worth it with some buyers asking EcoZip, which has a site on Waiheke Island, how soon they could visit.

“We could literally see customers for this summer,” says managing director Gavin Oliver.

Very welcome news, because Auckland’s been struggling to shake off a case of long Covid. Oliver says more major events are part of the answer because of the halo effect they have on businesses.

Oliver gives the example of the Fifa Women’s World Cup in July 2023 which helped EcoZip turn a profit in the middle of winter, which is unheard of.

“You don't normally make a profit in July in tourism because even with the school holidays, it's too flat.”

That hasn’t happened over winter since.

Oliver in part blames the cost-cutting made at the agency responsible for Auckland’s events, Tātaki Auckland Unlimited (TAU). Attracting tourists is a long game - people plan trips a long way out and major events play a major part in attracting visitors but the city’s calendar has been depleted.

“Without a shadow of a doubt, we haven't been out there prospecting,” says Oliver.

But our competitors are - Australia is outgunning us. The tourism budget for South Australia alone is about $140m a year where as TAU has just a fraction of that to work with.

“Defunding the regional tourism organisation to the degree that it was defunded was a colossal disaster.”

Over the past six years TAU has been battered by change, Covid and budget cuts while a legal battle and fight with the Government strangles one of its revenue streams.

Major events, tourism and growth used to be handled by the Auckland Tourism, Events and Economic Development (ATEED) agency. It used to have a budget of about $28m.

In today’s dollars that would be the equivalent of about $36m.

Then, following a review of council-controlled organisations, in 2020 it was merged with Regional Facilities Auckland to become Tātaki Auckland Unlimited, a Council Controlled Organisation (CCO).

After Auckland Mayor Wayne Brown was elected, he looked to scrap the agency altogether to enact his masterplan to ‘take control’ of the CCOs. Brown eventually settled on TAU keeping its events, destination, performing arts and responsibilities for organisations like Auckland Zoo, the Maritime Museum, Auckland Art Gallery, and Auckland Stadiums.

But it was stripped of its responsibility for economic development, which was rolled into council operations.

The uncertainty and disruption of the reform inevitably had an impact, TAU’s acting chief executive Justine White said.

“As any organisation, when you're going through any kind of restructure or review, there's always a bit of uncertainty. There's always a little bit of angst amongst your teams.

“I think realistically, it does create a little bit of a distraction, but I think our kaimahi [staff] has done really well in terms of still continuing to deliver lots of activity over the period that we've been going through.”

At the same time, councillors cut its budget amid a savings drive.

The agency now believes it is about $20m short because its funding pre-Covid was the equivalent of $36m [adjusted to today’s dollars] and its general ratepayer funding portion is now approximately $16m.

In response, Brown pointed to TAU’s Statement of Intent forecasting a $34.3m spend on destination marketing and events in this financial year.

However, this figure includes a range of activity, of this the direct spend on destination and events activity is approximately $24m for the 2025- 2026 financial year. Excluding cultural festivals this then drops to $20m.

TAU’s director destination Annie Dundas said reduced funding - through cuts and lost revenue streams - has had a direct impact on Auckland’s events calendar.

“When there’s lots of money in the pot we’re able to do and achieve our objectives. Whereas obviously when that's reduced, it makes our job a little harder, and we can't attract the things that perhaps we once could have.”

“So in the space of major events and business events, there's a very long lead time for winning those things. So that's why our pipeline looks a little slim, because we haven't had the funds to be able to commit to major events in the future.”

And all the while TAU’s bottom lines were tightened, uncertainty hangs over one of its key funding streams.

ATEED was previously in part funded by the contentious Accommodation Provider Targeted Rate (APTR) which was charged to hotels, motels, and serviced apartments.

It was introduced in 2017 but faced a five year legal battle by accommodation providers and was challenged all the way up to the Supreme Court which ultimately ruled the council could charge the rate, with some modifications.

The council suspended the APTR in 2020 due to Covid-19 and was never reinstated because instead a plan was developed to charge tourists a bed levy. This was written into the long term plan and was expected to plug the funding gap.

But the Government has kiboshed the bed tax and left the council scrambling last month to fill a $7m shortfall.

In response, councillors agreed to underwrite up to $30m over the next three years so TAU can bid for events. It’s given it some breathing room for now, but it still leaves uncertainty - a blow to the long-term planning for events - and the council with a deadline to find $30m.

There’s also a risk if Auckland and the Government are unable to resolve the bed tax stalemate, it could mean a 0.4% rates rise for Aucklanders.

Brown is convinced the Government will eventually change its mind and said it will happen at “an appropriate time in the dead of night”.

“I’ve been pretty direct with the Government, as has industry,” said Brown at the governing body meeting last month.

“[The underwrite facility] gets us through the short term while we wait for the Government, who are showing signs of weakening … so watch for the carefully selected words as they crumble.”

He’s even attempted to give the concept a facelift to curry favour with a coalition which has promised “no new taxes” this term.

“We’re now decided we’re going to call it the ‘big events incentive’ because it’s another name that ACT can’t say it’s another tax. It’s not another tax.”

Brown has pointed his finger at ACT for being the cause of the road block.

“They’ve worked themselves into a bit of a corner there and [Luxon] is trying to manage recalcitrant ACT MPs and he’s digging himself out of it as best he can.”

ACT leader David Seymour, however, isn’t buying the “big events incentive” and pointed his finger back at Brown.

“I think Wayne Brown, frankly, needs to be a bit more constructive in his relationship with central government.”

And Seymour shot down Brown’s suggestion there could soon be a U-turn, saying “new taxes are bad”.

“If you take the central government and the councils, they're taking about 40%of the economy, and then we're told that we can't put on a concert unless there's a new tax.

“I just don't buy that.”

Oliver believes policy-makers are only just learning the importance of major events and tourism marketing.

“I think there was a systemic lack of understanding of how the tourism ecosystem worked.'

He wants to see more engagement with grassroots tourism operators so they can learn about how that ecosystem works.

He’s even invited Brown for a ride on one of his ziplines.

“He’s welcome on a zip line anytime soon. He’d be extremely welcome.”