Desley Simpson: Ateed beating drum for Auckland

The below column appeared in the New Zealand Herald on Friday 28th of April, 2017.


Just about everywhere I go, people ask me the same question: with huge infrastructure, transport and housing issues affecting the region, why does Auckland Council spend ratepayers' hard-earned money on its tourism, events and economic development agency Ateed?

As industry, commentators and the public debate who should pay the bill for promoting Auckland's visitor economy, the question has become "Do we even need an Ateed?"

I have spent time looking at why the agency exists, what it does, and - most importantly - what benefit it delivers to Auckland and its ratepayers.

It's become clear to me that regional economic growth is a complex dynamic. Every major international city has some form of tourism promotion and economic development agency.

Cities compete in a demanding global environment. It's cheaper and easier than ever before to visit different destinations, and for investors, skilled migrants, students and companies to cross borders.

Unless we make Auckland's voice heard and secure the best for our region, investment and ultimately jobs and prosperity will go elsewhere.

Before Auckland Council came about in 2010, promoting Auckland was piecemeal. Central government promoted destination New Zealand, but not specifically Auckland, which was only positioned as a gateway.

The legacy councils did their best, but a single agency was needed to deliver the crucial strands of regional economic development.

Since then, Auckland's visitor economy has grown from less than $5 billion to more than $7.4b and 2.5 million international visitors a year. In 2016, the tourism industry employed 55,670 people in Auckland, up 5.6 per cent on the previous year. The sector is now our 8th biggest employer.

The major events work, and tourism and business events promotion undertaken by Ateed has played a major part in that growth.

Ateed's major events portfolio investment on behalf of council adds enormously to the vibrancy and excitement of Auckland and has generated new GDP of about $250m and nearly 1.5 million visitor nights to date.

Independent research shows incremental spending by visitors attending Ateed-secured major events alone has averaged $50m a year.

For example, the 2017 Downer NRL Auckland Nines brought in more than $8m with new incremental accommodation spend of $2.7m. Last year's Pop-Up Globe yielded $1.6m with nearly half a million dollars spent on accommodation.

Ateed pitched for and won a second rugby test match at Eden Park during the upcoming DHL New Zealand Lions 2017 tour. This means that our region will benefit twice by hosting the estimated 17,000 travelling Lions fans.

The World Masters Games 2017 has attracted 25,000 competitors - more than double the number of athletes at an Olympic Games. The games will bring nearly 250,000 extra visitor nights.

From a tourism marketing perspective, Ateed's long-term collaboration with Flight Centre to promote Auckland in the Australian market has fuelled a $30m increase in accommodation, transport and attraction packages.

The 30 international conferences Ateed has helped to attract to Auckland will add more than $35m to the regional economy. The agency's work has seen Auckland's cruise ship economy grow from $100m in 2011 to more than $250m in 2016.

The agency also does some great work supporting the growth of selected industries where Auckland is globally competitive, and is helping the city become an Asia-Pacific innovation hub.

Ateed has supported the development of the new Kumeu Film Studios and plays an important role in bringing international productions worth tens of millions to Auckland.

A key target growth sector identified in Council's Economic Development Strategy, production activity alone generated more than $900m annual gross screen production revenue in 2015. One recently completed production generated more than 13,000 visitor nights alone.

Assessing the real added value of each dollar spent through Ateed initiatives is not easy.

The consultancy PWC estimates the return on such work to be on average $4.40 for each $1 spent.

This council term we have strengthened the accountability mechanisms for all council-controlled organisations.

I want to see Ateed put more effort into showing their worth to ratepayers and I'll be expecting to see more tangible measures and results when they next report.

Which brings me back to "do we need an Ateed?" I say yes. But more importantly, should it be funded by the residential ratepayer?' I say no.

Auckland is challenged by its own success with a great need for infrastructure to support the growing number of people visiting and doing business here.

My challenge to Ateed is for them to use ratepayer funds as a last resort not a first resort, and work towards becoming Auckland's first essentially self-funded CCO.

Auckland needs Ateed because it adds so much more to our city than it takes. Having it pay its own way would make it even more of an asset.