Wellington Chamber of Commerce
Media Statement
Monday 21st March 2016

Can Wellington afford to not build convention centre and movie museum, asks Chamber

Can Wellington afford to not build the proposed convention centre and movie museum? That was the question Chamber of Commerce Chief Executive John Milford posed to city councillors today during his oral submission on the project.

“If the city wants to remain competitive and get its share of the Australasian convention and tourism market then we have to ask if we afford to not go ahead with this project.

“We are not talking about just the New Zealand market, we are also talking about a market that includes the eastern seaboard of Australia. That means it’s not a market of 4.5 million, but one closer to 16 million.

“Is that a market Wellington can afford to not be chasing?”

He told councillors that the success of the convention centre should be a key priority for the Wellington Regional Economic Development Agency (WREDA).

He said the main issue ensuring the convention centre’s viability was attracting its share of the convention market.

“Once a facility is built, the next issue will be to recoup, retain and grow market share when faced with the competition of other centres. New facilities in Auckland, Christchurch and Queenstown are due to be open at a similar time to Wellington.

“KPMG has warned of under-utilisation of facilities, and questions whether the market is big enough for four major convention centres.

“This is also a concern for the Chamber. Relevant parties have reassured us that Wellington has been successful in managing its market share through a strong working relationship between Wellington and Tourism NZ, and we trust that WREDA will maintain this relationship going forward.

“Wellington businesses expect a return on investment for the convention centre, which is wholly reliant on Wellington’s ability to secure business events. We expect its success will be a priority Key Performance Indicator for WREDA.

“We would urge WREDA and the council to be particularly vigilant in managing Wellington’s business events market share as the NZ International Convention Centre project in Auckland begins operation.

“The council’s business case emphasises the market share Wellington holds, and the risk of losing this. This information is a concern to the Chamber and its members and, provided the numbers stack up, fronting the infrastructure to recoup, retain and grow market share seems like a valuable investment.”

He also said in the submission that the Chamber expected the leasing arrangement between the movie museum and the council to adhere to independently valuated commercial market standards.

“Based on the council’s business case it’s a positive project.

“Wellington is already seen as the film capital of the world, and the Chamber is proud of the industry’s impacts on our economic and cultural well-being.

“The Chamber was initially concerned, based on the information in the consultation documents, that the market may have been exaggerated for the Movie Museum.

“We have discussed this matter with Positively Wellington Tourism and are reassured that … there is a strong demand for pop culture attractions which have been market tested and are more popular than other themes.

“The confidence of Wellington’s tourism bureau is reassuring, and we trust the information available to those in charge of this project paints a positive picture and is used responsibly.

“A commercial leasing arrangement will exist between The Movie Museum Ltd and Wellington City Council. The commercially sensitive figures of this arrangement have been redacted from the consultation, but we trust this leasing arrangement will adhere to independently valuated commercial market standards.”

Mr Milford said the Chamber was pleased the council had undertaken independent analysis to prepare the business case documents of both proposals.

“Based on the information provided, the Chamber recognises the need for a convention centre, and the opportunity for a movie museum to succeed.

“I can also report that according to the Chamber’s latest survey, the vast majority of our members support this project, believing it to return significant benefits to the city and the region.

“Some 81 per cent of respondents so far to our survey support the building of the convention centre, with 11 per cent undecided, while 91 per cent support the movie museum.

“While having undertaken some high-level research, the Chamber is ultimately reliant on Wellington City Council to prepare a sound business case.”

He said that if the project was approved the Chamber also expected to see:

• an updated an ongoing business case, with notification of any major changes

• accountability for the information provided in the business cases

• rational decision-making focusing on the needs and capacity of Wellington

• the council being accountable for managing the increased level of debt

Mr Milford also asked council to provide an update on how the convention centre and movie museum project would impact on the ‘fixed’ average rates increase of 3.8 per cent as outlined in the Long Term Plan.

ends

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