Callam Mitchell examines the proposed convention centre and asks whether there are smarter ways to attract visitors.
The current debate about the convention centre has divided opinion. You're in one of two camps - either for or against.
Tourism has long been proven to generate benefits to a region, both tangible and intangible, so spending money to generate tourism shouldn't really be part of the debate. But if, as a city, we're looking to increase tourism to the region, perhaps we should look at whether there are any other ways an investment of $200 million-plus could achieve a better result than solely via the construction of a Convention Centre.
As an example, what if the Government and the Christchurch City Council decided to build a convention centre worth $100m - half of the currently proposed budget, and then put the other earmarked $100m into an investment fund, with interest being used to seed fund concerts and large events?
I'm not suggesting that the convention centre is a bad idea, but how about we don't put all of the funding earmarked for tourism generation into one bucket that we know from history is likely to be a wee bit leaky.
Putting $100m in a fund earning 5 per cent interest would generate enough money to assist promoters and event organisers with the funding of 10 large-scale international events each year to the tune of $500,000 each.
The original principal amount would remain untouched - only the interest earned on this fund, after an allowance for inflation, would be used towards this event development. This would be a massive incentive for promoters internationally, as it would significantly underwrite a large portion of the risk involved in touring these sorts of shows.
This concept doesn't even factor in any revenue from profit share arrangements that could potentially be entered into with tour promoters.
Hand in hand with financial benefits of this proposal are of course the social ones. A scheme such as this would, without question, be of greater public interest and relevance to ratepayers than what will occur inside an enlarged Convention Centre.
It would also make Christchurch a more desirable place to live - not only for those already here, but those contemplating moving here for study or to set up business.
I'm sure Canterbury University, and other tertiary providers would agree, given their dwindling numbers at the moment.
The next question that needs to be addressed is: How many conventions in Christchurch in recent years have attracted more than 500 people?
It's my understanding only about 10 to 15 conferences with more than 500 delegates are staged in Christchurch annually, while conferences with upwards of 1000 delegates are rare.
Regardless of the exact figures, large conferences are hardly a regular occurrence in our city, and this is unlikely to change.
The physical conferencing industry looks set to face extremely challenging conditions in the future.
An increase in digital conferencing solutions, an awareness by companies of the need to reduce corporate carbon emissions, pressure on companies to reduce costs, and the fact that virtual conferencing facilities actually improve productivity, all point to a stagnation at best, but most likely a gradual decline in the size of the market in years to come.
In contrast, concerts involving artists such as U2, and other large-scale events such as Cirque de Soleil would attract thousands more visitors to the city from around the South Island and further afield than the conference and conventions market ever would, even if the $200m facility was constructed.
Such events would also further justify the need for a large covered stadium.
The point here is that there are smarter ways to generate tourism, particularly considering the promoters of the convention centre have simply assumed the mantra "if we build it they will come".
Have they stopped to ask why companies would come to a broken city when there are other options around New Zealand and Australia that are more desirable, and that are perceived as safer and easier?
To boost tourism, the city needs to create experiences that aren't available elsewhere, and this proposal would do that.
While it could be funded in lieu of a portion (not at the expense) of the proposed funding for the Convention Centre, would a fund such as this then attract interest from other potential beneficiaries?
The fund would essentially be a non-interest-bearing deposit for the Christchurch City Council, and relevant businesses and stakeholders to enhance the vitality, wellbeing, and desirability of Christchurch as a destination.
These organisations could include tertiary providers, hotels, the Christchurch Casino, Air New Zealand and Christchurch International Airport.
In time there may even be a trickle-down effect where the concept becomes a key selling point that generates business for the convention market.
A vibrant city full of cutting-edge events not accessible elsewhere could be a bonus in the eyes of conference organisers. In any given month delegates could extend their stay and enjoy an international event, or have it built into their social programme.
So if the concept of a $100m convention centre linked to a $100m fund will generate more bed nights, and if the hospitality sector would also be significantly better off because of the tens of thousands more people filling up the central city on a regular basis, exactly what is the business case for building a much larger convention centre?
If the answer lies in the flow-on effects of international conference and convention delegates bringing more foreign exchange into the country, and delegates and their partners then spending money touring the rest of the South Island and New Zealand when they're here, that's all very well. But the financial responsibility for that should not fall on Christchurch's well and truly battered ratepayers.
By far the most important outcome is for Christchurch to become a more desirable and vibrant city, helping reverse the exodus of young people by providing them with the quality of life enjoyed by their counterparts in other major cities around New Zealand and in Australia.
This proposal would achieve that while also creating a convention centre that still allows for growth in the size of the pre-earthquake convention market.
Callam Mitchell is a Christchurch-based event manager and a director of several local event companies.
- © Fairfax NZ News
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