15 May 2013

Business welcomes Auckland convention centre

1:01 pm on 15 May 2013

Business leaders are welcoming the announcement of a new national convention centre, saying it will boost jobs and tourism and drive economic growth.

In a deal announced on Monday, SkyCity will spend $402 million on buying land and building the New Zealand International Convention Centre.

An artist's impression of the convention centre.

An artist's impression of the convention centre. Photo: SUPPLIED

In return, the Government will extend SkyCity's exclusive casino licence in Auckland until 2048, allow it to install 230 more gaming machines and extra gaming tables and introduce card-based cashless gaming.

With the promise of employing 1800 people to build the centre or work there, and of pumping $90 million into the economy, the long-delayed project is being hailed as a breakthrough by the Government, SkyCity and business.

The Employers' and Manufacturers' Association says people may have have to accept the downsides of gambling as a trade-off for the new opportunities the centre will create.

Chief executive Kim Campbell says Auckland needs the centre.

"Given the size of our city and our growth aspirations, without a internationally-sized convention centre it's very difficult to get on the map.

"You don't have to look very far to see the transformation of cities close to home, we've got Sydney and Melbourne whose convention centres have just transformed their tourism.

"Places like Phoenix Arizona and Honolulu, these places were struggling for visitor numbers and the convention centres have just transformed their local economies."

The centre will have a capacity of 3500 and is predicted to attract an extra 33,000 high value delegates a year, who are typically the biggest spending visitors.

The venue is due to open in 2017 and Tourism New Zealand chief executive Kevin Bowler says he will start promoting it now.

"We certainly will be promoting New Zealand more aggressively as a result of this new infrastructure, it's fair to say also that large conventions and meetings are planned well in advance; sometimes as far our as five years.

"So now is the right time to start promoting New Zealand and this new facility specifically."

Air New Zealand says the thousands of extra delegates will help reduce seasonal variations in demand for travel to New Zealand. And says it is likely to boost demand for seats generally, but particularly in business class.

Shares in SkyCity rose more than 2% as investors welcomed the deal.

Challenges for casino

But Forsyth Barr director of research, Jeremy Simpson, says the firm now faces the challenge of using the new facilities to attract more people to its Auckland casino.

He says the current facilities are congested compared with other casinos and there is a lack of car parking.

"If you look at the way casinos have been re-developed in Australia recently, there are a lot more spacious rooms than what SkyCity's currently got - which is very congested."

He says SkyCity's strategy will be to increase the size of its main gaming floor.

Mr Simpson says the new facilities will give SkyCity the opportunity to take market share off pubs and clubs and increase its gaming machine revenues beyond the current 50%.