Physical APEC cancellation 'a blow' to Auckland and NZ - business chamber

It will be difficult to leverage any real economic gains from a virtual APEC, Auckland's Business Chamber says.

The government confirmed today the Asia-Pacific Economic Cooperation (APEC) summit will be hosted virtually due to global disruption caused by Covid-19.

Foreign Affairs Minister Winston Peters announced the move today, saying the global disruption caused by Covid-19 including border restrictions had made planning for a large volume of high-profile visitors from late this year impractical.

Chief executive Michael Barnett said the move from a physical conference to a virtual one would be a blow, not just to Auckland, but for the whole country.

Barnett said the people expected to come spend and travel elsewhere in New Zealand.

"I think when you have a look at this event there's over 20,000 people expected to come into Auckland, and sure there's the accommodation, hospitality, but these people also spend, they travel, they go elsewhere in New Zealand.

"So the blow is, yes, to Auckland but it's also to the New Zealand economy and it's also to a broad front."

He said a virtual conferece simply would not provide the same benefits.

"Having people here spending real dollars, having people contribute to our accommodation, hospitality sector, that was going to make a difference, it should have been a part of the recovery."

New Zealand last hosted the gathering of 21 countries leaders in 1999, when Bill Clinton was President of the US and Jenny Shipley led the New Zealand government.

The prestigious summit hit its first pothole last year after the SkyCity Convention Centre fire meant the venue may not be ready in time.

Auckland mayor Phil Goff said they could not get certainty on the pandemic.

"The truth is, we didn't know for sure whether Covid-19 would have been defeated right around the Asia-Pacific region and, with over 10,000 people expected for leaders' week - from 21 different countries and economies - it would have just been impossible to quarantine people for 14 days," Goff said.

APEC's leaders week was expected to have booked out every hotel room in Auckland. The tourism sector had warned hotel developments would need to stay on track to ensure everyone had a place to sleep.

After the change, Tourism Aotearoa chief executive Chris Roberts said all the money and planning that had gone into the conference had come to nothing.

"These events don't happen overnight, the government has already spent millions of dollars preparing for APEC.

"There's been discussions going on for a couple of years now with hotels about ensuring we have the rooms available for everyone coming, and now that work has all come to nought."

National's Foreign Affairs spokesperson Gerry Brownlee said it would be a significant loss to New Zealand's economy, but it was still an opportunity to focus on strengthening relationships and forging new ones.

"APEC 2021 was an incredible opportunity for New Zealand. It was set to be the largest event ever hosted by New Zealand and would create significant opportunities to promote our economic interests.

"We should remain optimistic that international progress on defeating Covid-19 may present an opportunity for a smaller Leader's meeting in person in Auckland."

"We need to rethink how we conduct diplomacy in this new world, particularly around how New Zealand advances and enhances our need to trade successfully in an increasingly closing world."

APEC 2020's host - Malaysia - had asked its chance to host the big event be deferred because of the pandemic.

Prime Minister Jacinda Ardern said a deferral was one of the options the government weighed up before opting for certainty in an uncertain time.

"We considered a wide range of options, if we weren't to host ... and Malaysia were to move their hosting year that has a knockon effect for Thailand.

"That moves then countries into election years which obviously is avoided and so yes a range of options were considered but a range of knockon effects were created by that as well."

Finance Minister Grant Robertson downplayed the economic blow, saying that while it was disappointing, a call had to be made.

"While APEC potentially offered some economic benefits for New Zealand, obviously on the counter if we're not hosting a fully fledged event there are savings as well", he said.

Robertson said the savings would come through things like the security involved in hosting the summit.

He said officials were still working out a dollar figure for those savings, but he said it would be "significant".

The last physical APEC summit was held in Papua New Guinea in 2018.

The Chilean government was forced to cancel last year's leader's summit amid week's of violent protests.