Eventful but is it Profitable?
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The Auckland City Council is well on their way to following this trend and is set to significantly increase its budget to enable Auckland to secure more events, particularly from the international marketplace.
However, whilst I have no doubt that the impact of events in terms of "community feel good" is absolutely proven, there are some question marks around the economic value of events and there are some unfortunate examples of events which have never yielded the economic benefits that they originally purported to deliver. The problem with evaluating the economic contribution of events to a community is that it is notoriously difficult to actually forecast with any precision the revenue streams that will accrue as a result of attendance at these events. One of the best or worst examples of this is the World Rowing Championships which were held recently in New Zealand, and which unfortunately, failed to reach their potential in terms of ticket sales resulting in a reasonably large bill for the New Zealand tax payer.
Now I know that events can offer far greater benefits than economic contributions, and the media attention that is often focussed on the region or country in which the event is being held also needs to be taken into account, but it is nevertheless a sad fact that there is some cynicism around the exact economic contribution of events given the challenges alluded to earlier in this column. The other challenge around events is that they are invariably owned by international organisations or individuals, and the fees charged to a city or country to hold these events can be considerable and make the whole exercise marginally economically viable at best. I would however, reiterate that I am a great fan of events and understand that they can add flavour, excitement and "a sense of being" to communities in which they are held, and if they are marketed and operated in a business-like manner can also deliver sound economic returns.
Conventions, of course, are "business events" and it is imperative that any events strategy recognises this and includes conventions as a component of their strategy. Whilst conventions undoubtedly cannot offer the "feel good factors" to the local community, they are far and away the best means of earning money for a community and are a lot easier to assess in terms of their economic impact for the community in which they are held.
There is a great deal of data available on international conventions that regularly rotate through various countries and CINZ is a member of an international organisation called International Congress and Convention Association (ICCA) which has an extensive database of conventions that are regularly rotated around the globe. When CINZ decides to bid for a particular convention, it firstly tracks the attendances at previous conventions that have been held, and in particular, those that have been held either in New Zealand or Australia. Coupled with the other research that CINZ is involved with around the daily spend of international and national convention delegates and their lengths of stay, it is a comparatively simple exercise to estimate with a great degree of accuracy the likely economic return to the community, city or country in which the convention will be held. I often say that events, particularly artistic and cultural events, feed the soul but business events including conventions feed the bank balance!
Once again, I fully concede that there is little, if any, community interest in attending conventions that are held in a particular region or city and can fully understand why the events sector is regarded as being far more "sexy" than the convention sector, but I must hammer home once again the point that apart from incentive participants, the most valuable form of international tourist that any country can attract is an international convention delegate attending a convention held in one's own city, region and country. The other great advantage of the international convention industry is the knowledge transfer that accrues to the country in which the convention is held, and the opportunity for the passing on of scientific, medical or other professional knowledge that is on display by hosting an international convention. There seems to have been a bit of a lapse in terms of the knowledge transfer aspect that New Zealand as a country needs to engage in but hosting an international gathering of scientists, medical specialists or other professional participants is a fantastic way to spread global knowledge into the host country.
I applaud fully Auckland's increased interest in the event industry but really hope that they recognise that a vital component of that strategy should include business events such as conventions, and hope that the requisite amount of funding is put aside for this vital element.
Unfortunately, the convention sector has been the poor relation of the events sector in terms of its profile but everybody should understand that nothing beats the economic contribution of either a national or international delegate attending a convention or meeting in New Zealand, and as the world becomes a far more competitive place in terms of attracting international conventions, New Zealand really needs to continue to invest in effective and dynamic international marketing strategies designed to attract more international professional conventions into the country. If New Zealand can do this, the entire country is a winner, not only the region or city in which the convention will be held, but all other parts of New Zealand will benefit from pre and post convention activities which inevitably take place either before or after the actual convention.
Alan Trotter
CINZ
