Our performance in detail

3
Whanaketanga ōhanga
Economic development

This chapter profiles our strategic approach, challenges and what we delivered in the economic development area, which includes city promotions and business support.

Snapshot of the city

Snapshot

3 Whanaketanga ōhanga
Economic development Top

Introduction

Our strategic approach is to support Wellington’s economic growth by supporting high-quality events and promoting tourism, attracting and supporting business activity, and exploring major economic development initiatives. Economic growth means Wellingtonians can continue to enjoy a high quality of life.

The challenges we face include the need to diversify our economy to make it more resilient, the delivery of capital projects in a tight construction market, and making the most of the opportunities presented by new technologies. We also continue to compete with other cities around the world for skills, and as a destination for business, cultural and sports events.

In the past 12 months, the city hosted a range of cultural and sports events and attracted growing numbers of visitors, particularly from overseas. We continued to market Wellington as a destination and to support Wellington businesses and organisations like Creative HQ, which actively promotes and support local entrepreneurship and innovation.

We continued discussions with The Movie Museum Limited (TMML) on a joint project to build a Movie Museum and Convention Centre. But in August 2018, we agreed to part ways. The decision was mutual and the Council will continue to work on building a convention centre. The convention and conference business is currently worth over $140 million a year to the Wellington economy and a new convention centre would mean more events are held here, which in turn benefits the hospitality, accommodation and retail sectors.

Visitor spending exceeded $2.5 billion for the first time, aided by WREDA’s strong visitor marketing campaigns and partnerships with other key players in the culture, transport and hospitality sectors. In 2018, a Deutsche Bank study ranked Wellington the world’s most liveable city for the second year running. Wellington is an international destination, with Singapore Airlines now operating daily direct flights to and from here.

Some of our cultural and environmental attractions like Te Papa and Zealandia also contribute towards the delivery of our economic goals.

Economic development performance story:

Visitor spending
gets a boost from international
tourism

WREDA’s efforts to draw visitors to Wellington are paying off, thanks to digital marketing and partnerships with cultural, transport and hospitality organisations. In 2017/18, visitor spending exceeded $2.5 billion for the first time. International visitor numbers grew by 19 percent to 903,000 over 5 years, and guest nights were up 22 percent over the same period. Domestic visitors also increased 15 percent to 5.3 million over 5 years, with guest nights rising 7 percent over the same period.

Within 5% or no change

1.49m

The number of domestic visitors, measured in guest nights, is up 7% over 5 years

1.47m in 2016/17

 
Within 5% or no change

5.31m

The number of domestic visitors, measured by passengers entering Wellington airport, is up 15% over 5 years

5.1m in 2016/17

 
Within 5% or no change

902,622

The number of international visitors, measured by passengers entering Wellington airport, is up 19% over 5 years

901,373 in 2016/17


 
Positive Result

839,699

 

The number of international visitors measured in guest nights is up 22% over 5 years

782,079 in 2016/17

 
Not met or decreased

493

 

The total number of major conferences per year has dropped

569 in 2016/17

 
Positive Result

733,962

Target 500,000

Estimated attendance at Council-supported events and a number of major sports and cultural events contributed to the increase in 2017/18

657,743 in 2016/17


 
Positive Result

$55.6m

Economic contribution of A-level* events held in Wellington is up $12.1 million on $43.5 in 2016/17

*An A-Level event is a major event with an investment greater than $50,000, excluding the NZ Festival, World of WearableArt Awards Show and Wellington Sevens.

 
Positive Result

12

A-level* events were held in Wellington in 2017/18, this is three more than the previous year

3.1 Whakatairanga tāone /
tautoko ā pākihi
City promotions and business supportTop

What we did:

Economic development performance story:

Visitor spending
gets a boost from international
tourism

WREDA’s efforts to draw visitors to Wellington are paying off, thanks to digital marketing and partnerships with cultural, transport and hospitality organisations. In 2017/18, visitor spending exceeded $2.5 billion for the first time. International visitor numbers grew by 19 percent to 903,000 over 5 years, and guest nights were up 22 percent over the same period. Domestic visitors also increased 15 percent to 5.3 million over 5 years, with guest nights rising 7 percent over the same period.

Within 5% or no change

1.49m

The number of domestic visitors, measured in guest nights, is up 7% over 5 years

1.47m in 2016/17

 
Within 5% or no change

5.31m

The number of domestic visitors, measured by passengers entering Wellington airport, is up 15% over 5 years

5.1m in 2016/17

 
Within 5% or no change

902,622

The number of international visitors, measured by passengers entering Wellington airport, is up 19% over 5 years

901,373 in 2016/17

Economic development financesTop

How it was funded

The majority of the economic development activities are paid for by commercial ratepayers, as this covers the cost of tourism promotion, economic grants, and other activities that directly benefit the sector.

What it cost (operating expenditure $000)
  2015/16
Actual
2016/17
Actual
  2017/18
Actual
2017/18
Budget
2017/18
Variance
3.1 City promotions and business support
             
Expenditure 38,788 42,434   37,051 43,511 6,4601
Revenue (15,133) (14,541)   (14,040) (15,676) (1,636)2
Net Expenditure 23,655 27,892   23,011 27,835 4,824
Economic development total
             
Expenditure 38,788 42,434   37,051 43,511 6,460
Revenue (15,133) (14,541)   (14,040) (15,676) (1,636)
Net Expenditure 23,655 27,892   23,011 27,835 4,824
             

Variance explanations

1 Under budget due to planned grant to Wellington Stadium Trust being incurred in previous year

2 Decreased rental and fee revenue, including lost revenue as a result of the closure of St James Theatre for earthquake strengthening

What it cost (capital expenditure $000)
  2015/16
Actual
2016/17
Actual
  2017/18
Actual
Brought forward from prior year 2017/18
Budget
2017/18
Variance
3.1 Wellington convention centre
               
Expenditure 1,669 886   599 - 5,016 4,4171
Economic development total
               
Expenditure 1,669 886   599 - 5,016 4,417
               
 

Variance explanations

1 Under budget due to delays in the Wellington Venues renewals programme ($1.640m) and the deferred decision on the combined Convention Centre project ($2.777m)

Positive Result

839,699


 

The number of international visitors measured in guest nights is up 22% over 5 years

782,079 in 2016/17

 
Not met or decreased

493


 

The total number of major conferences per year has dropped

569 in 2016/17

 
Positive Result

733,962

Target 500,000

Estimated attendance at Council-supported events and a number of major sports and cultural events contributed to the increase in 2017/18

657,743 in 2016/17

Economic development performanceTop

The following section outlines our performance data: outcome indicators, performance measures and supplementary tables.

We use outcome indicators to monitor our city over time, which provides information on trends that may influence our performance including those outside our control.

We use performance measures to track how well we are delivering services against targets as set out in the 10-year and annual plans.

The Council undertakes the Residents’ Monitoring Survey (RMS) on an annual basis. The survey has a margin of error of +/- 3.1 percent.

Positive Result

$55.6m

Economic contribution of A-level* events held in Wellington is up $12.1 million on $43.5 in 2016/17

*An A-Level event is a major event with an investment greater than $50,000, excluding the NZ Festival, World of WearableArt Awards Show and Wellington Sevens.

 
Positive Result

12

A-level* events were held in Wellington in 2017/18, this is three more than the previous year

Performance summary

The following table is a summary of how well we performed against our agreed outcome indicators and key performance measures for this activity area.

    Outcome indicator trends KPI compared to target KPI compared to last year

 
Positive Result Positive result 11 2 2

 
Within 5% or no change Within 5% or no change 4 1 1

 
Not met or decreased Not met or decreased 2 - -

 
Not measured or not comparable Not measured or not comparable  1 1 1

 

Performance data – outcome indicators

The following section outlines outcome indicators for the Economic development activity area. Outcome indicators do not have targets – only trend data.

Council outcome indicator Source   2015/16 2016/17   2017/18  
Number of domestic and international visitors (guest nights - data to April year-end) Statistics NZ Domestic 1,542,892 1,471,999   1,490,177 Within 5% or no change
    International 743,203 782,079   839,699 Positive Result 
Average length of stay – international and domestic Statistics NZ   2.10 2.12   2.13 Within 5% or no change
Number of major conferences WREDA   418 569   493 Not met or decreased
Number of A-level* events held in Wellington and their economic contribution WREDA Events 11 9   12 Positive Result 
    Contribution $36.5m $43.5m   $55.6m Positive Result
*An A-Level event is a major event with an investment greater than $50,000, excluding the NZ Festival, World of WearableArt Awards Show and Wellington Sevens.  
               
New Zealand's top 200 companies based in Wellington Deloitte Top 200 Businesses   22 21   22 Positive Result
Business enterprises – births and growths (net growth in business) Statistics NZ   0.1% 1.0%   1.7% Positive Result
Domestic and international airline passengers entering Wellington Airport Wellington International Airport Limited Domestic 4,957,898 5,121,757   5,310,967 Positive Result
    International 890,897 901,373   902,622 Within 5% or no change
Free wifi usage (logons/day) – central city and waterfront Citylink Central City 49,289 74,366   78,329 Positive Result
  TradeMe Waterfront 821 714   723 Positive Result
Pedestrian counts – average of various Lambton Quay sites WCC Golden Mile Pedestrian Survey 2017   2,052 2,153   2,039 Not met or decreased
Businesses and employees in research and development sector Statistics NZ Businesses 165 162   162 Within 5% or no change
    Employees 5,460 5,670   5,780 Positive Result
Secondary (international) students enrolled in Wellington. Education New Zealand   1,157 1,287   1,314 Positive Result
The count of tertiary students (international and domestic) enrolled in Wellington is under review and not available for this report. Not measured or not comparable
               
Events/activities held with international cities (in Wellington and overseas) WCC International Relations   58 58   65 Positive Result

Performance data – Council performance measures

The following section outlines Council performance measures for our Economic development services. It includes data for the last 3 years to show trends, and includes variances explanations for relevant areas.

PERFORMANCE MEASURES  2015/16 2016/17   2017/18 Actual 2017/18 Target % Variance  
3.1 City promotions and business support
To measure the quality of our investments in promoting the city
WREDA – Positively Wellington Tourism partnership funding. Target is to maintain the Council's funding at less than 50% of total revenue 48% 63%   52% <50% -4% Within 5% or no change
To measure attendance of Council-supported events
Estimated attendance at Council-supported events 978,188 657,743   733,962 500,000 47% Positive Result 
A number of major sports and cultural events contributed to an increase in attendance at Council-supported events. These included major sporting events such as the All Blacks versus British & Irish Lions match, the FIFA World Cup Intercontinental Qualifier, and the NZ Asia Pacific Amateur Golf Champs. In addition to the NZ Festival, notable events included Homegrown, the LUX Festival, the Wellington Jazz Festival, Beervana and Wellington on a Plate, and the Jim Henson Retrospectacle.
               
To measure the quality of our investments in economic development
Events Development Fund – ratio of direct spend to economic impact 1:25 1:21   1:21 1:20 met Positive Result 
The proportion of grant funds successfully allocated (through milestones being met) not reported 100%   not reported 95% NA Not measured or not comparable
Grants were allocated at end of the financial year to five Business Improvement Districts. This grant fund has been removed from our 10-year plan for 2018–2028
               

Case study Visitor marketing campaigns Top

David Perks might have been born and raised in the UK, but he’s now a Wellingtonian through and through.

“I wouldn’t live anywhere else. It’s been a wonderful place to raise my family.’

“We’re part of an interesting, friendly community and we spend lots of time outdoors exploring the region from Makara to the Wairarapa on various trails.”

David, WREDA's General Manager for Regional Development, Destination and Attraction, has been involved in Wellington’s tourism industry for more than a decade, including 7 years heading up Positively Wellington Tourism.

David’s first job in the capital in the late 1990s was managing a hotel in downtown Wellington. In those days many Wellington hotels used to close on Sundays and school holidays because there weren’t enough visitors to justify keeping them open. Now the city’s hotels are effectively at full capacity from Monday to Friday most of the year, and weekends are much busier.

He says two big changes have driven Wellington’s visitor economy over the past decade.

One is the length of time visitors spend in Wellington.

“It used to be that people would come and maybe spend one night here. Now Wellington has the longest visitor stays in an urban centre in New Zealand.”

The way WREDA markets the city has changed enormously too.

“Ten years ago, we relied mainly on TV and newspaper ads to tell our story to the world. Today, digital media has become our main marketing tool and we push ourselves to keep reinventing how we share our story.”

Efforts to draw visitors to Wellington have paid off. For the first time in a 12-month period, visitor spend in the Wellington economy in 2017/18 exceeded $2.5 billion.

Challenges remain. At the moment, one area of focus is getting growing numbers of visitors from China to choose Wellington. To achieve this, WREDA has partnered with Wellington airport, Weta Workshop, Te Papa and Kiwi Rail on several initiatives.

“What we do in the tourism space is very much based on a partnership model,” he says.

David Perks, WREDA’s GM, Regional Development, Destination and Attraction