The decision to commit $50 million into a national cycleway and today's announcement to entertain the idea of a nationalised conference venue are two of the most recent examples of Key's pragmatic thinking.
Tourism commentators will be glowing with excitement and the Labour party will be wringing their hands with unease as Key takes another jump to the left.
It will be interesting to see what the feasibility study for a large convention centre will reveal. We know that this will operationally loose money, however this will undoubtedly be buried by the supposed economic multiplier effects that are more often based on spin than on substance.
Feasibility studies are often oblivious to the negative effects of the higher taxes needed to pay for these facilities, ongoing operational loses and the opportunity costs of existing privately owned convention providers.
What is disappointing, is that government ventures usually wind up being net economic losses in the long run and Key is well aware of this.
4:00AM Friday May 22, 2009
By Tamsyn Parker
Auckland could be a step closer to getting a large-scale convention centre but even if work was started on it tomorrow the facility would not be ready for at least three years.
Prime Minister John Key, who is also Tourism Minister, yesterday told Auckland tourism businesses the Government would put $250,000 towards scoping out a potential 4000-seat convention centre for Auckland.
The Auckland City Council is also putting in $20,000 towards a feasibility study and $30,000 towards a business case.
Key said New Zealand lacked a large-scale convention and exhibition centre that was capable of attracting big conferences.
"As a result, we may be missing out on thousands of high-value visitors that could be interested in coming to New Zealand."
Business visitors spend more money than leisure travellers and stay longer but have also been hit harder by the recession.
April visitor arrival statistics show business travel was down 10 per cent last month although Conventions and Incentives New Zealand said recently convention business was down just 1 per cent for the year to March.
Alan Trotter, chief executive of Conventions and Incentives New Zealand, which is in charge of marketing New Zealand to international conventions, welcomed the funding saying Auckland was long overdue to get a convention centre.
Tourism Auckland chief executive Graeme Osborne said a convention centre had the potential to bring $75 million to $100 million into New Zealand per annum in new visitor spend of which $60 million could go to Auckland.
The convention business presently attracts 70,000 people and a spend of $250 million a year but there are hopes to grow it to $500 million by 2015.
Ministry of Tourism managing director Ray Salter said the ministry had begun researching the convention centre and expected to present preliminary information to the minister and council members by October.
The feasibility study would look at the demand for a convention centre, how much it would cost to build and where the money should come from to build it.
"The Auckland Committee had already done a lot work on it in 2006. We are really keen to update the market situation."
Salter said his team would be looking at potential sites as well as the cost of building it in the current environment.
While the recent economic crisis had affected business travel Salter said the study would look at the long-term demand for a convention centre.
"Even if we started it tomorrow it would take three to four years to build," he said.
Initial estimates have put the cost at around $280 million to $300 million just to build the facility. If land needed to be bought that would be an additional cost.
THE NUMBERS
* $250m - Value of convention tourism to NZ economy.
* 70,000 - Number of people who come to New Zealand for conventions.
* $75m-$100m - What a new convention centre could be worth to the economy.
* $300m - Estimated cost of building a convention centre.
Source: Click HERE
