Auckland Council agency looking to plug $20m gap in marketing budget ahead of summer influx

Covid-19 restrictions have eased and the border is open to tourists - it is the summer Auckland has been waiting for, but there is a big hole in the promotions budget.

Auckland Council's economic development agency Tātaki Auckland Unlimited is short of nearly $20 million and is asking local businesses to contribute to a marketing fund.

The agency plans to raise at least half a million dollars, but that is a drop in the ocean compared to the hundreds of millions being spent across the Tasman.

Bookings were starting to trickle in for Waiheke Island's EcoZip Adventures but managing director Gavin Oliver was not expecting a return to pre-Covid-19 levels anytime soon.

Now was the time to promote the city and the shortfall was a blow, Oliver said.

"It's really concerning, visitors have got choices about where they go. We've got Australian states spending hundreds of millions of dollars on top of their existing budgets to market to the very same people that Auckland needs to be marketing to."

Oliver was among business owners asked to contribute to Tātaki Auckland Unlimited's plan to market the city as a summer destination to the rest of the country and to key overseas markets.

Even though his own business was still recovering, he was keen to get on board.

"We haven't had a chance to rebuild our balance sheet yet, so we've got an arrangement to pay this over the longer term. So we're going to start drip feeding money into it."

But he understood not all businesses would be in a position to contribute.

"I've spoken to a number of business owners. Some see it as I do, as an investment, and they will find a way of making it, others are struggling and have yet to see any real benefit of a return to international connectivity."

Tātaki Auckland Unlimited investment and industry director Pam Ford said the agency lost $14m when the hotel bed tax was suspended due to the pandemic - it was now being contested in the courts.

They needed a minimum $19m extra funding each year to continue to promote Auckland and attract major events, Ford said.

"We think that kind of funding would at least put us back on to a track to bring in a lot of money we haven't seen for the last couple of years into the Auckland economy," she said.

"If we're not able to continue to attract people and visitors, we just won't have those attractions open."

It was urgently needed, she said.

"It's really important to invest and now is the time to invest. People are starting to come back, people are making decisions around the world where they want to visit, where they haven't been. It is an important time."

Auckland was competing with Australia for the tourist dollar and across the Tasman eye-watering sums were being spent on marketing, she said.

New South Wales has $150m to support the recovery of major events, $25m for regional events, $10m for a recovery marketing campaign and $250m for accommodation vouchers.

"Australian states have been pouring money into the visitor economy, whether it's for event attraction or subsidising business events or providing tourism promotion," Ford said.

"They recognise that stimulating the visitor economy is the way to help the recovery from Covid so we are competing with some pretty hefty and significant marketing activity in Australia."

Auckland's economy has taken a big hit from five lockdowns and the country's border closure.

International tourism contributed nearly $5 billion to Auckland's economy in 2019, accounting for 55 percent of the region's tourism spend, compared to 36 percent across the rest of New Zealand.

One long-term solution to the funding shortfall for marketing the city was to introduce a wider levy on business - not just a bed tax.

"The industry realises that we all have to work together and have a partnership model to support the return of tourism," Ford said.

"Longer term, we're looking at what other cities do in terms of targeted rates across the broader sector not just hotels, what kind of levies or bed taxes other places put into effect."

Auckland restaurateur Krishna Botica is director of Comensa Group, which owns three restaurants.

"Many restaurants, in the Auckland CBD area at least, are closing for shifts and this is due to staff shortages and sickness. I do feel that anything in the next 12 months would be a hard ask."

Some restaurants would continue to close from time to time over summer to cope with the slow return of tourists and staffing shortages, Botica said.

"How long do we close for, how viable is our business over that period and certainly with us not seeing a huge amount of tourism activity, that is a big question mark as to how well we are going to cope with the summer period."