City fathers talk up viability of big event centre

ALAN WOOD
Last updated 08:50 02/08/2012

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City leaders are talking up the wider regional economic benefits of a large convention centre in the Christchurch CBD rebuild, though how much the ratepayers will have to front up for an estimated $200 million-plus project is unclear.

There is also acknowledgement that convention centres are usually uneconomic as a standalone business, but they bring business to the city for the benefit of other businesses.

The cost of a new Christchurch centre has been put at $200m in order to be able to host up to 2000 delegates, much more than it cost to build the quake-destroyed convention centre.

That centre cost just $21m including land when it was built in the late 1990s, but had the advantage of being tied in to the existing Town Hall to give organisers extra hosting capabilities.

It also injected between $60m and $100 each year into the Canterbury economy from the mid-2000s, according to estimates.

Tourism as an industry has received criticism as being a way towards poverty rather than prosperity, notably in comments made by 2011 New Zealander of the Year Sir Paul Callaghan, before he passed away.

"What does tourism earn? About $80,000 a job, about two- thirds of what we need. The more tourism, the poorer you get. Tourism is great for employing unskilled people; it is absolutely not a route to prosperity," Callaghan said in an interview with The Press.

Tourism leaders have countered saying tourism does offer good jobs and an entry point into higher paying work.

Canterbury Employers' Chamber of Commerce chief executive Peter Townsend said a convention centre as a centrepiece for the tourism industry was a must. The private sector could be involved with two hotels built in association with the centre, as well as a retail offering, to help the feasibility, he said.

"It would probably be a stretch to say you could make the whole thing profitable because I don't think there's a convention centre in isolation anywhere that makes money . . . they're just pieces of infrastructure that have to be big to do what they do but if you charged what you needed to, to make a profit, no-one would use them."

While large infrastructure projects did not make a commercial return, "the indirect benefits of having conventions and exhibitions in the city are enormous and I don't think there's any argument about that at all".

Christchurch & Canterbury Tourism chief executive Tim Hunter estimated that, all going well, a public-private partnership convention centre with two additional hotels could be built by 2016. Within 18 months of completion it could be winning significant business for the city.

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A CCT forecast was that the centre could attract at least 77 conventions a year generating $95m of visitor spend in the city. At the end of the scale, the centre could host 115 events a year, generating $140m of economic value for the city.

"It depends how successful you are in the sales," Hunter said adding that CCT already had a small sales team that could be expanded.

There are contrary views though. A January 2005 study by the US-based Brookings Institution said that in the United States some convention centres offer deep discounts to attract attendees, given competition in the sector.

"Localities, sometimes with state assistance, have continued a type of arms race with competing cities to host these events."

- The Press

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