It’s about Hawke’s Bay Tourism.

In recent submissions to the HB Regional Council on the matter of proposed de-funding of the marketing agency called Hawke’s Bay Tourism (HBT), many of the lions of the tourism industry missed the mark.

They remonstrated on the value of tourism to our region’s economy and vilified the dunderheads who supposedly didn’t appreciate that value. But no one, including HB Regional Councillors, doubts that value or wishes to see it vanish.

What is at issue is simply this: Who should pay the tab for the sector’s marketing agency?

If this is indeed a $1.3 billion industry, why can’t the sector itself support the – relatively speaking – puny $1.52 million (maybe $2m) cost of its marketing group? Why should ratepayers pick up the tab?

Many in the sector appear to be insulted that they should even be asked this question. And/or complain that it was unfairly and unexpectedly thrust upon them.

That’s nonsense. 

HBT was put on notice eight years ago that perpetuation of Regional Council funding should not be expected. HBRC funding was reduced in 2016 and HBT was put on notice explicitly that it needed to develop alternative funding.

Ever since, HBT has simply put this challenge in the ‘too hard’ basket and gone about living almost entirely off the ratepayer handout. That’s a failure of HBT and wider sector leadership … full stop.

Somehow the industry can determine that it is worth $1.3 billion to the region. Somehow the sector can claim that cutting HBT’s funding will contract the HB visitor economy by $260 million over three years. But they can’t seem to figure out how to charge the most direct 20% of beneficiaries a mere $1.52 million.

HBRC is being pressed to appease the tourism lobby by continuing the funding another year, giving HBT time (once again) to finally develop a Plan B. But what is the Plan B currently mooted by the sector? A ratepayer shell game. Have the territorial councils – i.e., still ratepayers by my reckoning – pick up the tab in the future.

If any ratepayers, should bear any cost of HB Tourism, they should be commercial ratepayers. That might build more pressure to determine who really benefits most from the tourist spend and therefore who should be tithed for tourism marketing.

And to add a bit more of that pressure, not a penny (if any) should be spent by HBRC on HB Tourism that is not matched by cash contributions from the sector. Presently members contribute a mere $161,848 to HB Tourism (on another day I’m told 248 members pay $311k … whatever, point stands).

Let’s at least get the issue clarified. HBRC has not proposed writing off tourism’s value to the region’s economy. It has proposed that the sector – huge by its own accounting – pay for its own marketing effort … like other HB businesses do. 

Every HBRC ratepayer upset over a 19.6% rate increase should be equally alarmed over adding another 2.4%, which would be the effect of HBRC continuing to pay for the sector’s marketing.

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11 Comments

  1. I could not agree more. Should the HBRC or any other ratepayers subsidise other businesses? Of course not. Corner dairies, retail shops, farmers. Time people stopped thinking this is Regional Council money and realised this is ratepayers money, levied off other businesses and in any cases struggling pensioners.

  2. It is important to remember that via the Multiplier Effect everybody in Hawke’s Bay benefits from Tourism.
    It is the tourist spending money in the Cafes, restaurants, and wineries that pay the staff who in turn shop for food and clothing and other things that help the economy.
    It is unfortunate that many people do not understand that some of these places that residents enjoy would not be open if not for Tourism spending.
    Perhaps a more open-minded approach is needed.

    1. Do you mean to say Hamish that if the HBRC doesn’t fund HBT the tourists won’t come? I don’t think so. Like all businesses they need to self-fund their own advertising and promotions.

    2. Totally missed the point and come out with some spin of “multiplier effect” nonsense for by that rational, every business owner who has staff that shop for food, spend money in cafes (Locals probably have a higher spend in local cafes than tourists) buy food, clothing, fuel, Tyres, cars, trucks etc etc should all be subsidised as they “are” the local economy. It is patently obvious HB Tourism is effectively a parasite on local ratepayers and one might well ask how it is that 2 of the 5 directors of HB Tourism reside outside HB with one in Kelburn Wellington and the other in Kohimarama Auckland. Perhaps they should be living here, spending here and supporting their own interests rather than expecting the ever-suffering ratepayer to do so. The approach that is needed is one of “user pays”

  3. 200% Tom. Excellent article. Tells it exactly as it is. Similiar to the Napier Art Deco Trust.
    Surely it’s the Overdue time…. these hugely succrssful businesses stood on their own two feet! Give them some sort of token award, a shield? thanks very much?
    Time for a change most definitely. End of

  4. Totally agree. Plus not a word of consideration of the huge contribution of volunteers for tourism ventures, the cut from outside tour planners, and the quite low incomes that tourism provides for employees.

  5. I think it is time for some perspective. I do believe a rethink of the way Hawkes Bay Tourism works is necessary and what does the region get for its investment compared to not making the investment. I expect it may paint a favourable picture but every ratepayer needs visibility of the value it gets from their rates. The same should be applied to the multi million plus investment proposed to improve bus services! This is a subsidy for a very small sector of our community…..for what benefit. HBT has done an incredible job or raising the profile of the Hawkes Bay region collectively with iconic events such as FAWC and being instrumental in the Great Wine Capitals of the World designation, alongside very good PR and communications across all media channels. This is supported by businesses with their own significant investment in this area. People visiting the region support a thriving small business network across the Bay. Without them many small business and workers would simply be out of business. Collective regional promotions happen in every region in this manner and drive tourism activity and a strong regional economy. Everyone benefits and it’s not a subsidy. Let’s give HBT a chance to paint a very clear picture of the future and the returns we expect from our investment. But do not cut them off at their needs, we need people here spending money to provide a robust economy and recovery where everyone can benefit.

    1. Well said Steve! I dont think Tom’s article told the whole story at all!
      – Direct tourism businesses do not make 1.3b per year – that is the value of tourism directly and indirectly to the region’s economy. Visitor spend contributes $775m directly to our regional economy, across ALL businesses who serve and support them. Yes, that includes hotels, motels, tour operators etc. but also Air BnB hosts, supermarkets, laundromats, mechanics, chemists, clothing retailers, artists, cafes, restaurants, butchers, food producers …
      – Industry research shows that 20% of visitor spend in a region goes directly to tourism businesses and 80% to the wider regional economy.
      On that basis, if you take the $422,000 ($188k cash+$234k in-kind hosting activity in 2023-24) currently invested directly by Hawkes Bay Tourism’s members, in the promotional and support activities of Hawke’s Bay Tourism over the course of a year, our local member businesses are already paying slightly more than their 20% share (in fact 27%) of the economic benefit visitors bring to the region. i.e. 20% of $1.52m = $304k. This 27% seems like a pretty fair contribution to me.
      In my case, as a household ratepayer my contribution to the $1.52m currrently equates to a mere $11.58 per year or 22c per week. Personally, I would be happy to pay a 20% increase on that!
      – New Zealand and many other countries use tax-payer and rate-payer funds to pay for country and regional destination marketing and promotion. This is because it is widely acknowledged and celebrated that well managed tourism activity is a positive for communities. Ultimately our residents are all beneficiaries of a stronger more vibrant community and economy.
      – Sometime these tax and rate-payer funds are supported by more direct visitor taxes and sometimes they are not. Additional isitor taxes are not currently on the table in New Zealand, so that is a discussion for another time and place.

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