Centre should be funded by rates - TIA
Household ratepayers - instead of central city businesses - should bear the brunt of Wellington's contribution to the proposed Hilton convention centre, the Tourism Industry Association says.
The association also says the Hilton name should not be associated with the convention centre, but that Wellington would become the forgotten city in the convention and events sectors if the centre was not built.
The $100 million-plus convention centre would form part of a 165-room Hilton Hotel on the vacant site opposite Te Papa in Cable St and could be open by 2017. It would be able to host up to 1200 conference delegates and banqueting for 1400 people.
Local developer Mark Dunajtschik would finance the overall project and the council would lease the convention centre from the developer for 20 years.
The council said the average net cost to the city would be about $2m each year for the term of the lease. However, The Dominion Post revealed last month that the annual lease price Hilton expects from the council is $3.5m a year. When rates and insurance are factored in, that figure balloons to $4.6m a year.
The lease would include a profit-share deal, which the council says will reduce the average annual fee to $2m, although details of how this arrangement would work have not been made public.
The entire venue would be marketed and managed by Hilton.
TIA chief executive Chris Roberts said in its submission that the proposed funding for the convention centre would see businesses active within the downtown levy catchment area contributing twice, through both the downtown levy and general rates.
It said the convention centre should be funded from general rates, or limit the downtown levy contribution to the first three years.
Roberts said the proposed convention centre would appeal to the Australian and local markets for conferences of 600 to 800 delegates.
"Without investment in the convention centre, Wellington runs a significant risk of falling off the convention and events radar."
TIA recommended the centre be called something like "Wellington Convention Centre".
"TIA believes it is important that any name clearly indicates the city in which the convention centre is located.
"TIA does not support the Hilton having naming rights for the convention centre."
According to TIA, visitors to New Zealand for business events are high value, spending an average of $318 per night against an average international visitor spend of $208 nightly.
TIA represents the interests of 22 hotels in the Wellington region. Last year, Wellington hotels operated at about 74 per cent occupancy or about 800,000 room nights sold. More than 70,000 of these room nights were sold to convention and incentive delegates, representing $10 million in accommodation revenue.
In addition, Wellington hotels earned another $15m in on-site residential conference revenue such as room hire and provision of food and beverages.