Analyst: RWC was economic disaster

00:56, May 22 2012

Hosting Rugby World Cup matches hurt Palmerston North's economy and questions are being raised about whether the city should even host more big international events.

Far from producing a windfall, predicted to be worth between $750,000 and $2.2 million to the city, economic growth actually slowed during last year's tournament.

Proponents of the city's involvement, which included two matches, were "overly optimistic", said economic policy analyst Peter Crawford, and some city councillors are asking whether hosting large events is worth it.

The estimates process got it so wrong because it did not balance the likely benefits against the costs, he said.

One of the costs was the extent to which such a major event crowded out other activities.

Predictions were also based on expectations of hosting more high profile teams for longer.

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In particular, it was hoped a European team would stay for several weeks, providing a $188,500 boost to household income.

Instead, Argentina stayed five nights, and the low profile Georgian and Romanian teams stayed a total of 10 nights – worth about $40,000 to household incomes.

Mr Crawford has recommended more rigorous assessments in future.

His report stopped short of putting a dollar value on how much the city lost.

International travel dipped before and after the event, while domestic travel was down during it.

The peak in international visitor stays for the matches did not make up for slumps before and after, or the loss of domestic visitors who stayed away during the event.

New Zealand visitors staying in Palmerston North in September dropped 30 per cent.

International spending on bank cards was up $531,000 from July to October, over the same four months the previous year, but locals buying tickets to the matches hurt retailing in the city.

Mr Crawford's report went to the city council's finance and performance committee yesterday.

"I wonder if we can ever afford, in future, to host an international event," Cr Annette Nixon said.

Cr Pat Kelly said the council had to be much more disciplined.

"We must learn a lot of lessons, about just how much we make decisions based on assumptions and aspirations that must be more robust."

But Cr Adrian Broad said "the feel-good factor" of hosting RWC matches should not be under-estimated.

"The activities in The Square and at Arena Manawatu were outstanding."

Mr Crawford agreed that not hosting any matches would have dented civic pride, and the promotion of the city could have long-term benefits.

The bright spot following the event was that international visitor numbers to the region had stayed up, which Mr Crawford said could be attributed to the opening of the New Zealand Rugby Museum.

Manawatu Standard