The battle for Hawke’s Bay Tourism: Who should fund it, and what would happen if it disappeared?

Hawke’s Bay Tourism CEO Hamish Saxton says on average, 18,000 visitors come to the region each day. Photo / Hawke's Bay NZ

Tourism businesses in Hawke’s Bay pay $160,000 in membership fees to keep Hawke’s Bay Tourism operating each year, financial figures from the organisation reveal.

But the true amount of funding they provide is more than double that, Hawke’s Bay Tourism says.

More than 120 Hawke’s Bay’s tourism and business community members gathered this week to rally around Hawke’s Bay Tourism and support its fight to retain Hawke’s Bay Regional Council funding.

HBRC has proposed to no longer spend $1.5 million a year funding the organisation in an effort to manage the rates burden on its ratepayers, who are facing a 19 per cent rate increase this year.

The meeting on Tuesday night at Napier’s War Memorial Conference Centre was a show of industry strength of feeling, and an opportunity to submit against HBRC’s proposal.

The funding model shows just how much Hawke’s Bay Tourism will struggle to survive without HBRC’s annual grant.

For the 2023 financial year it received $2.88 million from stakeholders and investors.

The HBRC annual grant of $1.52m makes up more than half of that, while industry partner membership generated $161,848 in 2023 and even less in 2022.

Other funding sources include FAWC tickets and the time-limited and Covid-related Hawke’s Bay Regional Event Fund (REF), which aimed to support and create events, and the Strategic Asset Protection Programme (STAPP).

“The Strategic Asset Protection Programme of $552,151 is exhausted and no longer exists,” Hawke’s Bay Tourism CEO Hamish Saxton said.

“It was a Ministry of Business Innovation and Employment fund, that was a post-Covid recovery fund for regional tourism organisations,” said Saxton.

He said the organisation had some flatline funding, such as the grant collected by the HBRC, which had never been inflation-adjusted, but other funding sources were more variable.

Saxton said members of Hawke’s Bay Tourism actually invested more than $400,000 in supporting it last year, including through hosting events, running initiatives, and advertising, and its biggest member provided more than $25,000 in annual value.

Saxton said basic membership for Hawke’s Bay Tourism costs about $300, but some business owners who simply wanted a listing on the website paid $150.

“There is another tier of membership, which is specific to businesses that are export ready and able to be promoted offshore, because they can work with travel companies and they invest $1000 with us.”

He said there were also members of the organisation who gave more support and therefore saw a greater benefit.

Proposed funding cut ‘disingenuous’

At Tuesday’s meeting were former HBRC chairs Rex Graham and Rick Barker, and former Tukituki MP and local business owner Anna Lorck, who all expressed disappointment in the Regional Council’s proposal.

Lorck called the proposal “disingenuous”.

”The council is basically acting as a collector on behalf of all the region’s councils, then passing the money through to Hawke’s Bay Tourism. This saves the ratepayer the additional costs of red tape and yet another layer of bureaucracy.

“The council has gone further by deliberately leaving the status quo off its consultation document, making it even harder to protect a regional funding model.

“Why go and change something, disingenuously saying it’s a saving, when it ... simply gets it off the regional council books?”

Hawke’s Bay Tourism chairman George Hickton said the proposed funding cut would be a total disaster for Hawke’s Bay, and would force Hawke’s Bay Tourism to close from July 1.

He said there was huge interest at the meeting from accommodation, hospitality, retail and the wider business community.

An emergency Hawke's Bay Tourism funding meeting was held on Tuesday night.

“Frankly, people are shocked at the proposal to cut funding. It doesn’t stack up and it doesn’t make sense.

“If the cut goes ahead it will kneecap the visitor economy, and put many businesses and hundreds (if not thousands) of jobs at risk.”

The options in HBRC’s draft Long-Term Plan

The HBRC’s draft Long-Term Plan documents in April said its preferred option was to defund Hawke’s Bay Tourism over two years, with significant funding cuts within the first year.

A second option in the plan suggested Hawke’s Bay Tourism maintain $1.52 million in funding for 2024-25 and have that reduced to $441,000 for 2025-26, giving the organisation more time to secure funding from other sources.

In a Hawke’s Bay Today Talking Point this week, regional council chairwoman Hinewai Ormsby said the model for local government funding was “broken” and it meant difficult choices had to be made.

“No one likes to make tough decisions, but Hawke’s Bay Regional Council has had to do this.

“We find ourselves in this position partly because of a big natural event and partly because of the funding system for local government in Aotearoa New Zealand.”

Hickton has encouraged businesses and people to submit in favour of the second option, saying if the region is not promoted: “Hawke’s Bay will become a regional backwater”.

“I say to our regional councillors, Option B funding is the only viable funding pathway forward for the good of our region’s visitor economy. Our vibrant tourism industry is only just getting back on its feet; cutting funding now would be the equivalent of another cyclone.”

Black Barn co-owner Kim Thorp two weeks ago shared his written submission to the regional council with Hawke’s Bay Today.

Co-owner of Black Barn Kim Thorp said about 17 different entities were fighting to promote Hawke's Bay before Hawke's Bay Tourism was formed.

Thorp’s submission said Hawke’s Bay attractions would not exist without visitors from out of the region and Hawke’s Bay Tourism was important to the region’s economic development and the number of visitors received.

Thorp wrote that the void left behind if Hawke’s Bay Tourism were to collapse could not be filled by private businesses, primarily due to a lack of cohesion, contacts and focus.

‘18,000 visitors in Hawke’s Bay each day’

Hawke’s Bay Tourism CEO Hamish Saxton said the whole region benefitted from the one collective voice.

He understood on average 18,000 visitors came to the region each day and “20 per cent of visitor spend goes to tourism-related services and 80 per cent to the broader community”.

“To have 20 per cent of the community paying for the other 80 per cent, they would be taking on a great deal.

“When you consider the type of spend that comes into our region from elsewhere, that spend goes to retail, fuel, supermarkets and bottle stores and all sectors of the economy.”

He said Hawke’s Bay Tourism was the voice that attracted people to the region and brought long-term benefits to the region’s economy.

“Once people come to Hawke’s Bay many decide to come again, move here, do business here, and shift their business here. There are many great reasons to promote this region.”

Would a funding cut hit Hawke’s Bay flights?

Hawke’s Bay Airport chairwoman Wendie Harvey says she was deeply concerned by the HBRC proposal.

Hawke's Bay Airport Chair, Wendie Harvey.

In a Talking Point in Saturday’s Hawke’s Bay Today, Harvey says it is “inevitable” that visitor numbers will dry up without Hawke’s Bay Tourism’s expertise, with a ripple effect through the regional economy impacting businesses and jobs.

The airport relies heavily on demand for air services in and out of Hawke’s Bay, and in turn is highly dependent on the activities of Hawke’s Bay Tourism to attract domestic and international visitors, many of whom arrive by air.

Harvey says if fewer international and domestic holidaymakers visit, less passenger service capacity would be required, leading to fewer commercial passenger flights.

“This means that connectivity between Hawke’s Bay and other regional destinations could become unviable for Air New Zealand.

“This should be of significant concern to everyone across our regional economy, especially those sectors reliant on being able to connect easily with domestic and off-shore markets.”

Consultation on Hawke’s Bay Regional Council’s Three-Year Plan opened on Monday, April 15 and will close at 8pm on Wednesday, May 15.

Public hearings will take place from May 29 to 30, deliberations will be on June 17, and the final version of the Three Year Plan 2024-27 will be adopted on June 26.

Michaela Gower joined Hawke’s Bay Today in 2023 and is based out of the Hastings and Central Hawke’s Bay newsrooms. She covers Dannevirke and Hawke’s Bay news