Events' economic benefits over-hyped by $110m
Event organisers and consultants have over-hyped the economic boost from major events by as much as $110 million, according to a new report.
A government analysis of 18 big events hosted by New Zealand between 2010 and 2012 valued their economic benefit at a net $32.1m.
This figure was well short of the $143.8m net the organisers and consultants said these events provided to the country.
Among the events analysed were the Winter Games in 2011, the New Zealand International Festival of the Arts in 2010, and the World Rowing Championships in 2010.
The Rugby World Cup in 2011 was, however, not included in the findings, because of its status as a "mega" rather than "major" event.
The report says there were many reasons for the disparity in figures on the economic impact of the events.
They included counting domestic visitor expenditure when it would have been spent in New Zealand anyway, and including the net spend of overseas visitors who had coincidentally arrived during a major event.
The biggest economic impact of an event was a $6.1m net gain, while the least was a $324,000 loss.
Specific events were not identified within the Economic Evaluation Outcomes Meta-evaluation Report, to protect the commercial nature of each event.
The Government's $32.1m return figure, however, still represented a gain on its own combined $7.2m investment in the same events. Economic Development Minister Steven Joyce said he welcomed the immediate economic gain and long-term benefits of hosting such events.
"Nearly all events that delivered high returns also attracted a high number of international visitors. Besides increasing our tourism revenue, this leads to increased trade and business opportunities."
The report was used to evaluate the Government's investment in events through its Major Events Development Fund.
Each year $10m of funds can be allocated to potential events, often years in advance.
Joyce said the fund had invested $5m towards New Zealand co-hosting the Cricket World Cup in 2015.
On Tuesday it was announced Wellington would host three group games and a quarterfinal, bettered only by Auckland, which would host a semifinal as well.
Economic windfalls gained from hosting major events is oft-debated and the book Soccernomics says hosting an Olympics or World Cup is an inefficient way of boosting a country's economy.
The Rugby World Cup's short-term economic impact in New Zealand was estimated to be $1.7 billion between 2006 and 2012, according to the Stadium of Four Million report.
It said the economy would only grow by about $573m during the medium term, however, or about 0.34 per cent of GDP, once aspects such as the repayment of loans used to fund stadiums and other projects were considered.
- © Fairfax NZ News