New Zealand

Excessive cost cutting will likely slow sector recovery

A cut too far! Auckland Council warned that cutting event attraction and destination marketing will slow economic recovery

New Zealand’s hotel sector industry body has today given feedback to Auckland Council that its proposed cuts to destination marketing and event attraction are excessive, ill-timed and likely to slow the city’s economic recovery after COVID.

Hotel Council Aotearoa has formally advised Auckland Council to instead retain all relevant Tātaki Auckland Unlimited staff and provide reduced, but still adequate funding to “keep the lights on”.

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“New Zealanders often talk about how Melbourne has created a calendar of exciting events and attractions. In the year to June 2022, Visit Melbourne was provided with more than AU$130 million in funding for destination marketing and event attraction, or equivalent to $40 million when adjusted for Auckland’s population size.

“Auckland Council’s draft budget essentially proposes eliminating this work in Auckland and taking the spend down to zero,” said James Doolan, Strategic Director of Hotel Council Aotearoa.

Hotel Council Aotearoa Strategic Director, James Doolan

“Event attraction and destination marketing are an investment in a city’s future.

“Just this week, Melbourne saw the opening of a brand new 257-room Ritz-Carlton hotel, located on the highest floors of an 80-story building. Without destination marketing and event attraction work being funded by Auckland Council, it will be much harder in the future for Auckland to attract private investment into international standard tourism infrastructure.”

“Auckland Council is facing some tough choices, but Councillors shouldn’t abandon international best-practice.”

“Councillors should be reassured that the industry wants to help find a lasting solution to its funding squeeze. Hotel Council Aotearoa has been working on ways to reduce the burden of tourism on Auckland ratepayers.

“Industry knows that regional authorities throughout New Zealand do not receive a fair share of the taxes paid by tourists and tourism-connected businesses,” said Doolan.

“Hotel Council Aotearoa has repeatedly called on central and local government to start work on principles for fair, reasonable and nationally-endorsed solution to the tourism funding problem in New Zealand. Auckland ratepayers will benefit substantially once that problem is solved.”

Hotel Council Aotearoa anticipated the funding squeeze now facing Auckland Council and Tātaki Auckland Unlimited. In September 2021, before New Zealand’s borders reopened, Hotel Council Aotearoa wrote to the Minister of Tourism and Minister of Finance requesting that central government fund Auckland’s destination marketing and event attraction work for three years to assist the post-COVID recovery.

“We wish this was solved 18 months ago, but the industry was ignored at the time.

“The problem in Auckland grows increasingly urgent with each passing day,” said Doolan. “Since Auckland is the gateway city for seventy percent of international travellers to New Zealand, this is fast becoming an issue that could adversely affect tourism throughout the country.

“While we acknowledge that funds are limited and tough choices need to be made at all levels, Hotel Council Aotearoa calls on central government to provide urgent interim support so that Auckland and New Zealand do not fall further behind our international competitors.”

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