Warning over city finances

Cruise ship numbers are expected to grow from 90 for the 2017/18 season to 112 for the 2018/19 season. Photo: Supplied.

Tourism Bay of Plenty's bid for a larger slice of the city council pie from the next Long Term Plan may not survive the council trimming process, warns Councillor Steve Morris.

Tourism BOP wants the council to invest more in the Council controlled organisation, so it can in turn successfully manage an industry expected to continue massive growth over coming years.

Tourism BOP board chairman Des Hammond says the goal originally set some years ago to grow the visitor spend in the bay of Plenty to one billion dollars will be achieved next year – 12 years early.

“And the growth is not going to stop there, we all need to be conscious of that,” says Des at a council committee meeting this week.

Steve Morris's objection is the tourism funding is growing faster than the tourism numbers.

Steve says the last Long Term Plan increased Tourism BOP funding by 8.44 per cent to just over a million dollars for the current financial year.

“Should we agree with this additional investment, we are looking at $1.6 million. That's an increase in funding for Tourism Bay of Plenty from Tauranga City Council of some 92 per cent over five years.

“But in the meantime we have tourism that is growing at roughly five per cent, so I'm really struggling with that.

“Over the five years, assuming we would tick this off we would have over the last five years increased Tourism BOP's funding by 18.24 per cent per annum and we are working on the basis of five per cent more visitors per annum.

“While in our (Long Term Plan) draft, draft format, the numbers we are looking at, at the moment would be an unprecedented thrashing of our ratepayers coming at them next year from this council.

“We have got the old shearing shears out, but within that context as well I'm worked up. I might be okay with the recommendation from this committee to the council, but I can't at this stage from where I'm sitting - I wouldn't be able to approve it from the council seat.

“It's a lot of money and I just need some robust help to be able to take that money from people.”

Over the ten year term of the Long Term Plan the Tourism BOP additional $600,000 represents an extra $6 million in ratepayer funding says Steve.

Des Hammond says the answer lies in the economic strategy where Tourism BOP is arguing for a change of role in the industry to destination management.

Because the numbers are so large Tourism BOP is seeking a role change to managing the environmental and social impacts and the cultural change required.

“You can invest in change and support Tourism BOP into the role of destination manager where we will be a lobbyist in the industry on the community's behalf,” says Des.

The option of just stopping and waiting until the region can afford to manage the numbers will not work.

“In our view this growth is unstoppable, unless we do unspeakable damage to our place and make it distinctly unattractive, this growth will be unstoppable.

Information relayed to Tourism BOP over the last month or so includes aircraft manufacturer Boeing forecasting passenger growth of 100 million passengers per year in the Asia/Pacific region over the next 20 years.

Boeing forecasts the global air fleet to double from 26,000 planes at the moment to 46,000 in the next 20 years. Air New Zealand is itself forecasting growth of 30 per cent over the next five years with New Zealand visitors climbing to 4.5 million almost the New Zealand population equivalent by 2022. In 2015 the number of international airline passengers was 3.1 million.

Total international visitor spending is forecast to be $16 billion by 2022. That's up 65.5 per cent from 2016.

“These growth rates are just astronomical,” says Des. “And to bring it home, TBOP is currently forecasting from booked ships, 112 cruise ship visits next season.”

There are 90 ships expected to visit Tauranga in the current season.



7 Comments

TBOP makes losses?

Posted on 19-10-2017 17:12 | By MISS ADVENTURE

So why would you make it bigger? Why would you spend more money on it? Why would you borrow and spend more money on it? Defintiely the case that Tourism would happen with or without TBOP. In fact as others note below, likely better off without it.

City Finances

Posted on 19-10-2017 14:20 | By MISS ADVENTURE

They are in a bigger mess than anyone is allowed to know. With planned debt already heading for $550m then add teh CDB spending perhaps as much as $200m, recent overspending plans via BVL of $50m, Turret Rd yet to happen $50m and also borrowing $236m from Government. That adds to close One Billion in debt perhaps in just a few years.

Tourism Growth

Posted on 19-10-2017 14:16 | By MISS ADVENTURE

What TBOP and Council need to get the head around is the fact that Tourisum has grwon "DESPITE" TBOP and Councils not becasue of them. Like the CBD Tourisums fate will be sealed if TBOP and or COuncil get more involved as it in short just sucks the life out of it ie the CBD.

Rates for funding

Posted on 19-10-2017 13:37 | By Val.M

I was disturbed at the thought that you would use ratepayers once again for extra funding for tourism. We ratepayers cannot afford the cost of increasing amount we pay, when wages/benefits/superannuation, do not rise correspondingly. Please be realistic and dont just tell us our rates up again! Good on you Steve Morris - you are realistic. We all want to enjoy living here - not endure it!

Bay of Plenty not Tauranga

Posted on 19-10-2017 13:06 | By waiknot

This request for funding should be focused at BOP Regional Council. Of tourism growth to date what contribution did TBOP make to the growth, Im guessing it would have happened with or without TBOP interference.

Caution required in this decision

Posted on 19-10-2017 12:44 | By Border Patrol

Having worked in the finance industry (business and corporate sectors) I saw first hand the detrimental effects of the GFC on many types of businesses. Tourism was one of the first things to slow as it is a luxury for a lot of people to travel overseas. The associated businesses here in NZ suffered for years as the tourist numbers dropped away significantly. All of these projected forecasts which sound so great need to be treated very cautiously when/if any funding decision is made.

Fair's fair

Posted on 19-10-2017 11:18 | By Papamoaner

Tauranga is the mouth of the conduit for tourism, so should not be the only bearer of costs. Other places, for example Rotorua, benefit too, so their contribution is fair.

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The moon peeping through the clouds at Pillans Point. Photo: Mike Berry.

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