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Wednesday , October 18 2017
Sky City copy

Decision time is nigh!

Sky_City_copy Decision time is nigh!Steven Joyce is one of the most powerful National government ministers and recently let slip in an interview about employment that the proposed international convention centre in Auckland is about to become a reality which will result in 1,000 construction jobs being produced.

This is very good news for the convention industry as the process has dragged on far too long and the sooner some clarity around the decision-making is made, the better.

Readers will remember that due to a complaint by the Green Party of New Zealand, the Office of the Auditor General was requested to look at the expression of interest (EOI) process which resulted in SkyCity becoming the preferred developer and operator of the international convention centre. CINZ was peripherally involved in the process in terms of doing the initial work to establish the business case, and also the majority of contributors to the EOI process were CINZ members who during the course of their submissions consulted with CINZ.

The CINZ Chairman John Duncan and myself requested a meeting with the Office of the Auditor General early on in the process to make sure that an overarching background to the decision surrounding the need for the construction of an international convention centre was made, and also to give our opinion on the process insofar as CINZ was involved.

There is no doubt in my mind that the Office of the Auditor General will find that the process surrounding the decision to favour SkyCity was robust, ethical and equitable and it is to be hoped that this decision is released relatively quickly.

As I write this column there has been no definitive announcement from the Office of the Auditor General but it is hoped that a positive outcome will be released in the very near future, and once this has been released, I sincerely hope that the agreement between the Crown and SkyCity can be concluded successfully and the serious planning for the international convention centre can take place. Hopefully, once a positive decision has been announced, I cannot emphasise too strongly the importance of New Zealand ramping up its international convention marketing activities. The target market for the international convention centre is the relatively large international conventions of between 1,000 and 3,500 people, and international competition for this demographic is intense.

The other factor that should be borne in mind is that the lead time for this demographic is between three and seven years and marketing for the facility should start now.

A lot of people in the tourism sector do not understand the long lead times involved in securing medium to large international conventions but the logistics involved in terms of organising these events dictate that this is so.

Hotels in particular, often do not grasp the strategic marketing demands required to successfully fill an international convention centre and need to have a greater degree of understanding of how the bid process actually works. It should also be remembered that the biggest beneficiaries of increased convention business, be it international or domestic, are the hotels themselves as approximately 60 – 65 per cent of expenditure incurred by delegates accrue to hotels in terms of accommodation, F&B, and other ancillary spending.

At the very least, I hope that by Christmas 2012 a positive, definitive announcement is made around the international convention centre which obviously will include a construction timeline and a date for the completed facility to be up and running.

I will personally be very disappointed if this is not the case, but I must emphasise once more, that this announcement is only the beginning and the next challenge for New Zealand Inc is to institute an effective international marketing strategy to ensure that this facility, together with existing facilities, is sustainable in terms of its financial viability and that New Zealand becomes a serious player in terms of the international convention market.

Steven Joyce is one of the most powerful National government ministers and recently let slip in an interview about employment that the proposed international convention centre in Auckland is about to become a reality which will result in 1,000 construction jobs being produced.

This is very good news for the convention industry as the process has dragged on far too long and the sooner some clarity around the decision-making is made, the better.

Readers will remember that due to a complaint by the Green Party of New Zealand, the Office of the Auditor General was requested to look at the expression of interest (EOI) process which resulted in SkyCity becoming the preferred developer and operator of the international convention centre. CINZ was peripherally involved in the process in terms of doing the initial work to establish the business case, and also the majority of contributors to the EOI process were CINZ members who during the course of their submissions consulted with CINZ.

The CINZ Chairman John Duncan and myself requested a meeting with the Office of the Auditor General early on in the process to make sure that an overarching background to the decision surrounding the need for the construction of an international convention centre was made, and also to give our opinion on the process insofar as CINZ was involved.

There is no doubt in my mind that the Office of the Auditor General will find that the process surrounding the decision to favour SkyCity was robust, ethical and equitable and it is to be hoped that this decision is released relatively quickly.

As I write this column there has been no definitive announcement from the Office of the Auditor General but it is hoped that a positive outcome will be released in the very near future, and once this has been released, I sincerely hope that the agreement between the Crown and SkyCity can be concluded successfully and the serious planning for the international convention centre can take place. Hopefully, once a positive decision has been announced, I cannot emphasise too strongly the importance of New Zealand ramping up its international convention marketing activities. The target market for the international convention centre is the relatively large international conventions of between 1,000 and 3,500 people, and international competition for this demographic is intense.

The other factor that should be borne in mind is that the lead time for this demographic is between three and seven years and marketing for the facility should start now.

A lot of people in the tourism sector do not understand the long lead times involved in securing medium to large international conventions but the logistics involved in terms of organising these events dictate that this is so.

Hotels in particular, often do not grasp the strategic marketing demands required to successfully fill an international convention centre and need to have a greater degree of understanding of how the bid process actually works. It should also be remembered that the biggest beneficiaries of increased convention business, be it international or domestic, are the hotels themselves as approximately 60 – 65 per cent of expenditure incurred by delegates accrue to hotels in terms of accommodation, F&B, and other ancillary spending.

At the very least, I hope that by Christmas 2012 a positive, definitive announcement is made around the international convention centre which obviously will include a construction timeline and a date for the completed facility to be up and running.

I will personally be very disappointed if this is not the case, but I must emphasise once more, that this announcement is only the beginning and the next challenge for New Zealand Inc is to institute an effective international marketing strategy to ensure that this facility, together with existing facilities, is sustainable in terms of its financial viability and that New Zealand becomes a serious player in terms of the international convention market.

About Alan Trotter