All you need to know about the LTP 2018 for HBRC
Funding Tourism is not a cost, it’s an investment in the regions future!
Hawke’s Bay Tourism is coming to the end of its three-year funding agreement with the Hawke’s Bay Regional Council and we need to ensure we maintain our current budget.
We have achieved incredible results over and above what we were asked to do and we believe we can deliver another $200m into Hawke’s Bays economy if HBRC continues to invest in funding tourism.
- Direct spending by visitors hit $630m year-end December 2017, tracking at 6% annual growth
- 8% of regional GDP is derived from tourism
- An additional 470,000 visitor nights have been spent in Hawke’s Bay in the last three years.
- Tourism employs over 6,200 people in Hawke’s Bay
- An additional 880 new jobs have been generated in the last 2 years which supports the key goal of Matariki Regional Economic Development Strategy.
- Jetstar flying to Hawke’s Bay has led to increased air capacity from Air New Zealand and lower fares resulting in a 37% increase in passenger movements through our airport.
- 550 new employees across the hospitality sector have been created – these are entry level jobs supporting school leavers and our young people.
- International visitors spent $173 million +14% year on year
- An average 7.9% annual growth was achieved and market share has been protected, resulting in a total of $87M new tourism spend over the last two years
- If we continue to grow as we have and with continued investment in promotion – in three years visitor spend will be $835m per annum (based on a 5.5% growth rate).
- HBRC is the only entity that can rate on behalf of the entire region, therefore all who benefit contribute – tourism touches the whole community.
Tourism Touches the Whole Community
Our visitor economy in Hawke’s Bay is made-up of multiple layers and thousands of businesses that represent both the private and public sector. These include accommodation providers, tour companies, bus operators, information centres, attractions like aquariums and water parks, holiday parks, bike hire, cafes, wineries and event venues but all the businesses that service and do well from increased visitors to Hawke’s Bay.
Hawke’s Bay Tourism is the official Regional Tourism Organisation and is the only entity responsible for the destination marketing of Hawke’s Bay, its cities, districts and experiences.
What is proposed?
Option 1: Hold Tourism funding at the current level to collectively fund tourism promotion for operators of all sizes, with associated economic benefits for everyone.
- $0 No impact.
- Funded through existing Economic Development Rate
- Residential, e.g. Napier $29.05
- Commercial, e.g. Hastings $18.68
Option 2: Reduce annual funding and adjust the rating basis to reflect the benefits to businesses. This equates to -$300,000 year 1, -$600,000 year 2, -$900,000 year 3.
- $1.8m cumulative savings over 3 years
- 1.6% rate reduction in year 1. Change to rating split in years 1 & 2.
- Residential ie $15.86
- Commercial ie Hastings $25.64
Year 1 – per 100k of CV
Why this proposal by HBRC?
HBRC are very happy with the results that tourism is delivering for the region but they believe the industry should pay for a larger share of the promotion. There is also a belief that the growth would have happened without the work of the RTO as tourism is in an up-swing overall.
What we want?
Hawke’s Bay Tourism wants to maintain the current levels of funding and confirm a three-year funding agreement with the Hawke’s Bay Regional Council for $1.82m. This is Option 1.
HBRC’s existing rating model follows good practice:
• It is relatively simple to understand and the amount for residential ratepayers is modest. (Currently $26 per household per year across Hawke’s Bay)
• It covers the whole region with a consistent formula, thereby avoiding debate over how much individual TLAs should invest.
It is also the preferred tourism funding model for the Territorial Authorities – Napier City Council, Hastings District Council, Wairoa District Council and Central Hawke’s Bay District Council.
“Central Hawke’s Bay has seen an incredible lift in visitor spend +14%, that’s over $33m into our local economy. It gives our community confidence and that would not have happened without the help and professionalism of Hawke’s Bay Tourism”. Alex Walker – Mayor of Central Hawke’s Bay.
What can you do?
Express your views in the Long-Term Plan submissions to the Hawke’s Bay Regional Council. This process opens March 19 and closes April 23rd.
The Hawke’s Bay Tourism Industry Association will be submitting to ask that current funding levels are maintained – We are selecting Option 1.
“The tourism industry is extremely grateful to HBRC for their funding support to date, however the proposed reduction in tourism funding equates to a 50% reduction in overall funding over three years. What can be the rationale for this in the face of the enviable results achieved by Hawke’s Bay Tourism? If you support tourism you need to act!” Chair Hawke’s Bay Tourism Industry Association Neil Barber
Submissions can be:
• Delivered to 159 Dalton Street
• Posted to Freepost 515, Private Bag 6006, Napier 4142
• Emailed to; email@example.com
• Completed online at http://www.hbrc.govt.nz