Submission to Auckland Council’s Annual Budget 2024/2025
Introduction:
Heart of the City (HOTC) is the business association for Auckland’s city centre, operating a Business Improvement District (BID). We represent the interests of businesses and property owners. Our purpose is to champion a successful city centre, working for the economic benefit of city centre businesses.
Our submission focuses solely on the question of funding to support Destination Management and Major Events.
Council is seeking feedback on whether Aucklanders support introducing a ‘bed night’ visitor levy paid by visitors who stay in short-stay commercial accommodation to fund major events and destination management and marketing activity.
Background:
Auckland’s city centre sees a direct benefit from events and destination management and marketing activity, driving increased foot traffic, consumer spending, and vibrancy. Most recently, over the weekend of Sail GP and Luke Combs in January 2024, additional revenue for hotel operators was gained, highlighting the significance of major events. The city centre was buzzing, and businesses in Wynyard Quarter, where Sail GP was held, reported it to be an overwhelming success for them.
The Coldplay events at Eden Park in November brought a significant boost in city centre spending from out-of-Auckland domestic visitors compared with the previous week. Overall consumer spending on the Saturday of that week was the second highest day of spending next to Black Friday for the month of November.
However, these weekends are few and far between. The lack of certainty of funding to support existing events over the next 12 months (a similar programme was estimated to deliver $114M GDP last year) and the absence of a sustainable funding mechanism to secure a major events pipeline to support growth poses a significant economic risk for the city centre and its businesses.
This is in the context of a city centre that has endured a decade of large-scale, long-term construction, the worst covid impacts in the country, followed by the cost-of-living crisis. Whilst there is optimism for the future, the period ahead is critical to support recovery and ensure a strong platform for ongoing growth. While street trading businesses deliver a relatively small percentage of GDP, they are critical to ensuring a vibrant offering for tourists, students and other visitors.
Urgency is needed to ensure there is no shortfall in funding in the year starting 1 July 2025; and that funding is secured to ensure a sustainable pipeline of major events is in place as soon as possible. Furthermore, destination marketing is essential to attract people back to our city.
HOTC’s Response:
It is vital to ensure there is no shortfall in funding in the 2025/26 year, either by securing:
1. A share of funding from the International Visitor Levy (IVL);
2. Government support for a ‘Bed Night’ Visitor Levy with urgency, ideally to be in place during the 2025/2026 year. We acknowledge the preference expressed by sector representatives to have a national scheme in place to ensure an equal playing field across the regions and ensure appropriate technology is in place to support such a scheme; or
3. Agreement to allocate a share of the GST earned on related spending.
If either of these options are not able to be secured in time, we believe that major events and destination marketing funding must be prioritised by Auckland Council in its 2025/26 budget to ‘plug’ the $7M funding gap.
Council’s own analysis indicates that the $7M investment in the 2024/2025 year delivered $114M of regional GDP (as outlined in Section Four: Funding destination management and major events of the Annual Budget document). This does not capture the wider benefits such as vibrancy, improved reputation and international publicity.
Conversely, if this programme was not delivered, the loss would be far greater than lost GDP alone – it would have a detrimental impact on reputation, vibrancy and business sustainability. For a relatively small outlay, this is a compelling ROI.
-ENDS-
