Our performance in detail

3
Whanaketanga ōhanga
Economic development

We aim to support economic growth to enhance quality of life

The challenges we face

  • Diversifying Wellington’s economy to make it more resilient
  • Delivering economic stimulus capital projects in a tight construction market
  • Harnessing the economic opportunities presented by new technologies

Our strategic approach

  • Supporting high-quality events and promoting tourism
  • Attracting and supporting business activity
  • Improving the city’s national and international connections
  • Exploring major economic development initiatives

In this section
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3.1 City promotions and business support

Snapshot

3.1 City promotions and business support

What we did:

How we performed

Wellington Regional Economic Development Agency – Positively Wellington Tourism partnership funding (%)

Source: WREDA

Bar graph showing WREDA – Positively Wellington Tourism partnership funding.

Target to maintain funding at <50% of total income not met (-26%). Percentage of funding to income (target <50%) was impacted by revenue drop due to the November earthquake: $1m drop in “i-SITE” revenue and by closure of two hotels – Sofitel and Amora.

Events Development Fund – ratio of direct spend to economic impact

Source: Wellington City Council

Bar graph showing Events Development Fund – ratio of direct spend to economic impact .

Target met. However, ratio decreased by 16%.

Number of A-level events held in Wellington – economic contribution

Source: WREDA

Bar graph showing number of A-level events held in Wellington's economic contribution.

How we performed

Number of international visitors (guest nights) – international

Source: Statistics NZ

Bar graph showing number of international visitors (guest nights) - international .

Number of domestic visitors (guest nights) – domestic

Source: Statistics NZ

Bar graph showing number of domestic visitors (guest nights) - domestic.

Domestic airline passengers entering Wellington Airport

Source: Wellington International Airport Limited

Bar graph showing domestic and international airline passengers entering Wellington Airport.

Finances

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) Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance*
2016/17
3.1.1 WREDA          
Expenditure 23,385 18,574 30,245 30,822 577
Revenue (915) (738) (13,546) (14,369) (823)
Net Expenditure 22,470 17,836 16,699 16,453 (246)
3.1.2 Wellington convention centre         -
Expenditure 14,031 14,269 931 1,051 120
Revenue (14,483) (14,371) (930) (1,051) (121)
Net Expenditure (452) (102) 1 - (1)
3.1.3 Retail support (free weekend parking)          
Expenditure 1,355 1,356 1,357 1,357 -
Revenue - - - - -
Net Expenditure 1,355 1,356 1,357 1,357 -
3.1.4 City Growth Fund          
Expenditure 2,409 3,798 4,003 3,001 (1,002)
Revenue - - (1) - 1
Net Expenditure 2,409 3,798 4,001 3,001 (1,000)1
3.1.5 Major economic projects         -
Expenditure - - 5,048 5,077 29
Revenue - - (47) (77) (30)
Net Expenditure - - 5,001 5,000 (1)
3.1.6 Regional and external relations          
Expenditure 583 677 696 661 (35)
Revenue (8) (24) (37) - 37
Net Expenditure 575 653 659 661 2
3.1.7 Business improvement districts          
Expenditure 97 114 154 194 40
Revenue -   20 - (20)
Net Expenditure 97 114 174 194 20
3.1 Total City promotions and business support          
Expenditure 41,860 38,788 42,434 42,163 (271)
Revenue (15,406) (15,133) (14,541) (15,497) (956)
Net Expenditure 26,454 23,655 27,892 26,666 (1,226)
*Variance explanations to finances – why our actual spend differs from what was budgeted.
1. Over budget due to the City Growth Fund payments exceeding reduced budget. The variance is funded from prior year surpluses.
Capital Expenditure ($000) Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance*
2016/17
3.1.2 Wellington convention centre          
Expenditure 2,268 1,669 886 7,011 6,8741
Unspent portion of budget brought forward from prior years       749  
Budget reallocated from 4.1.2       3,995  
Unspent portion of budget to be carried forward to future years       1,621  
*Variance explanations to finances – why our actual spend differs from what was budgeted.
1. Under budget due to the delays in the Convention Centre project and Venues Renewals (St James, TSB and Town Hall)
Total costs
Net Operating Expenditure ($000) Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance
2016/17
ECONOMIC DEVELOPMENT 26,454 23,655 27,892 26,666 (1,226)
Capital Expenditure ($000) Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance
2016/17
Unspent portion of budget brought forward from prior years       749  
Annual Plan budget amount 2016/17       7,011  
Budget reallocation 2016/17       3,995  
ECONOMIC DEVELOPMENT 2,268 1,669 886 11,755 10,869

How we performed

International airline passengers entering Wellington Airport

Source: Wellington International Airport Limited

Bar graph showing domestic and international airline passengers entering Wellington Airport.

Performance data

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 Long-term Plan and Annual Plans.

Performance data - outcome indicators

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

Council outcome indicator Source   2014/15 2015/16 2016/17
Number of domestic and international visitors (guest nights) Statistics NZ Domestic 1,426,141 1,542,892 1,471,999
    International 769,714 743,203 782,079
Average length of stay – international and domestic* Statistics NZ   2.16* 2.10* 2.12
Number of major conferences WREDA   633 599 563
Number of A-level1 events held in Wellington and their economic contribution WREDA Events 12 11 9
  WREDA Contribution $29.9m $36.5m $43.5m
New Zealand's top 200 companies based in Wellington Deloitte Top 200 Businesses   22 22 21
Business enterprises - births and growths (net growth in business)* Statistics NZ   3.6% 0.1%* 1.0%
Domestic and international airline passengers entering Wellington Airport Wellington International Airport Limited Domestic 4,682,000 4,899,000 5,076,000
    International 775,000 897,000 889,000
Free wifi usage (logons/day) – central city and waterfront Citylink Central City 18,676 49,289 74,366
  TradeMe Waterfront 390 821 714
Pedestrian counts – average of various Lambton Quay sites WCC Golden Mile Pedestrian Survey 2017   1,971 2,052 2,153
Businesses and employees in research and development sector* Statistics NZ Businesses 162* 165 162
    Employees 5,000* 5,460* 5,670
Secondary (international) and Tertiary (international and domestic) students enrolled per 1,000 residents WREDA Secondary International Students 363 1,080 1,285
    Tertiary measure under review 3 7 NA
Events/activities held with international cities (in Wellington and overseas) WCC International Relations   new measure 58 58
* Result reporting in 2015/16 Annual Report revised by Statistics NZ
1. 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.

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 2014/15 2015/16 2016/17 Actual 2016/17
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 46% 48% 63% Maintain the Council's funding at less than 50% of total income Missed target by 26.0%
To measure the usage of the Council supported events          
Estimated attendance at Council-supported events 898,968 978,188 657,743 500,000 32%
The favourable variance is most notably attributed to the success of rugby events, with the Hurricanes securing three playoff matches in 2016 and attracting greater audiences to their 2017 seasonal fixtures. The extended capacity and tickets sold to the Hurricanes v British and Irish Lions match, World of WearableArt show, Guns N’ Roses concert and Homegrown music festival, as well as the addition of an All Whites v Fiji match have all contributed to the increase in attendance.      
To measure the quality of our investments in economic development          
Events Development Fund – ratio of direct spend to economic impact 1:23 1:25 1:21 1:20 Met, however ratio decreased by 16%
The proportion of grant funds successfully allocated (through milestones being met) 100% not reported 100% 95% 5%
Grant funds are allocated for various community and arts projects, applicants set out the outcomes they hope to achieve, these milestones are moderated based on the funding allocated and the Council’s own priorities and outcomes. Our role is to advise and support applicants through the process and closely monitor successful applicants performance against the agreed outcomes.
The result of the performance measure this year more closely reflects the efforts to improve monitoring and reporting of progress against outcomes.
     

Case study
The Lions tourTop

A significant number of visitors from outside the region came to Wellington for the 2017 DHL New Zealand Lions Series, providing a great boost to Wellington’s retail and hospitality sector. In the same week, the Lions played two sold-out matches at Westpac Stadium against the Hurricanes and the All Blacks. There were an estimated 15,000 visitors for the Hurricanes match and that number gradually rose over the next days to reach 26,000 by the time of the All Blacks match*.

The tour helped drive international visitor spending in Wellington up by more than 43 percent in June, according to Monthly Regional Tourism Estimates (MRTE) released by the Ministry of Business, Innovation and Employment (MBIE). A total of $55.6 million was spent in Wellington by international visitors in June 2017 – a net gain of $16.7 million on June 2016. Over the year, international visitor spending rose by 9.8 percent, surpassing $800 million for the first time on record.

International visitors were treated to a range of events and attractions during the week the Lions played in Wellington. In partnership with the Wellington Regional Economic Development Agency (WREDA), we carried out a highly successful “city activation campaign”, which included free events that were enjoyed by thousands of people.

*Note: the All Blacks match was played on day one of the 2017/18 financial year.