With the Rugby World Cup over next week, how reliant can Auckland’s economic recovery be on a steady schedule of international events?
The uncertain future of a post-Covid tourism sector and strong global competition are driving Auckland Council economic and cultural organisation Tātaki Auckland Unlimited to try and grow a healthy stable of consistent events for Auckland.
The past few months have been a busy time for the council-controlled organisation, with $4.8 million invested into 10 events between July and October that saw record-breaking crowds and brought almost $20 million back into the regional economy.
Events like the opening of the Rugby World Cup set a new world record for women’s rugby attendance and saw the largest ever crowd at a women’s sporting event in New Zealand. Meanwhile, the Auckland Diwali Festival drew a crowd of 100,000 – the largest in the event’s history.
But as the dust settles following Covid cancellations and postponements of major international events in the city, there’s only a few big items left on the docket.
There’s the FIFA Women’s World Cup, jointly hosted by New Zealand and Australia, which gets going next July. Then the following March is the New Zealand Sail Grand Prix.
There are plenty of other events going on in the city over the next few years, from concerts to festivals and sporting events - but only a handful reach the scale of what Auckland Council labels ‘major events’.
These are events the city’s decision-makers might bank on to catalyse economic recovery in the city, especially in the CBD, after years of stagnation due to shut borders and pandemic restrictions.
But while the next couple of years sees the city well-furnished with economy-spurring spectacle, things get a little more uncertain after that.
Once through the back-up of events cancelled and postponed during the early Covid years, Auckland may have less to look forward to. And with cities in Australia and the United States opening deeper pockets to attract events again, it’s a more competitive field than ever for the relatively small and humble City of Sails.
Head of major events for Tātaki Auckland Unlimited Chris Simpson said it was important that Auckland could establish its own calendar of events that draw in the overseas punters while giving the city a publicity boost.
“The competition across the ditch has increased massively,” he said. “So we’ve got to really start looking at long-term financially sustainable models to build a major events portfolio without necessarily having the same sort of budget that our competitors have.”
Simpson pointed to Melbourne as an example of a city with a reliable stream of income due to events that will not and cannot happen elsewhere - all bolstered by over $100 million in funding in recent times from the Victorian government.
Events like this week's Melbourne Cup or the Australian Open were part of the city’s DNA, and as it comes off the back of years of harsh pandemic restrictions, they also helped get the money flowing anew, he said.
“Australian cities have really seen the importance of major events for economic and social recovery,” Simpson said. “It’s not just cost - it’s about being able to control your destiny.”
Simpson said owning events that become synonymous with Tāmaki Makaurau was a more sensible long-term plan than throwing everything into the big one-offs, although he said there was still space to go for those as well.
Increased hosting fees from sports federations has also made the big one-off events an even more expensive proposition than usual.
“The competition has increased drastically but the likes of the international sporting federations have increased their fees. Because of that everything has become more difficult,” Simpson said.
But what sort of events does the council-controlled organisation envision?
Simpson said a combination of arts, culture and sporting events would be a good move, and suggested an expansion to Pasifika Festival as a potential avenue for funding given Auckland was the biggest Pasifika city in the world.
But how important is it for Auckland to play host?
Simpson said there were significant economic and social benefits that could help beat back the Covid doldrums.
“There's no question that major events can help turn around city recovery."
According to Simpson, the last 10 events hosted in Auckland over the past three months generated $19 million from an investment of $4.1 million. Eight of these events were sold out.
“We can almost guarantee that for $1 invested into a major event, it will bring over $4 return for the region in new money,” he said. “And that doesn't include all of the social benefits, the leverage of legacy opportunities for the community and the global profile exposure.”
But with funding streams from central government set to run out in 2024, Tātaki may have to scramble to figure out what the future looks like.
Simpson said an accomodation provider targeted rate provided a funding model up until 2019, which was then replaced by regional events funding from the Government due to Covid.
That was a programme set to last until 2024, so the end is near.
“We're at this really precarious time in our history where we are needing to look at how we build a funding model to create the long-term funding for major events at the moment,” Simpson said. “We are seeing sold-out crowds every week at the moment, but what we don't want to do is have that stopping and if we are not careful, if we don’t look at this new funding model and get it going soon, then we will potentially be in jeopardy in 2024 and beyond.”
Part of the shift is to try and decrease Tātaki’s reliance on the ratepayer.
New mayor Wayne Brown levelled criticism at the organisation during his campaign, calling it a “sprawling empire” that needed to refocus its priorities.
However, last week he said he had been “pleasantly surprised” by Tātaki Auckland Unlimited, saying the team had responded positively to the idea of change and were “committed to doing more with less”.
“They get that you can’t artificially buy economic growth with ratepayers’ money,” he said.
Simpson said minimising dependency on the Auckland ratepayer was one of the organisation’s goals. To achieve this he said the team was exploring international best practice funding models, including with the private sector.
“There is no one solution to the financial challenges that the events sector is facing,” he said. “It will take support from a range of industry partners and local and central government to ensure Auckland remains competitive in the international market and secures and develops world-class events for our region and New Zealand.”
