• Business Edge

    Spring 2017

Accelerating the growth of sports tourism

New Zealand should be addressing Auckland's stadium and accommodation issues if it really wants to accelerate the growth of sports tourism from events like the recent Lions tour and the coming America's Cup.

That's the opinion of Richard Croucher, audit and assurance partner in global business and accountancy network BDO - and Head of BDO's Sports, Tourism and Leisure Sector.

Croucher says sports tourism's contribution to the national economy is potentially significant - but presently restricted.

"A new national stadium in downtown Auckland has been talked about for some time now - and you just have to look at the success of the Wellington stadium to know many more large events would be attracted here if we had such a structure."

Even with a new stadium, Auckland would still have work to do to find accommodation for the thousands of people who attended such events, he says.

"It's well known that Auckland uses up its [accommodation] capacity pretty quickly - and the challenge for the city and the country is to have sufficient inventory when guests arrive."

Croucher says some BDO clients were among those who had been discouraged from hotel investment and development by Auckland council's recent targeted rate proposal; it is aimed at Auckland accommodation providers - a measure some critics say will increase a hotel's rates 150 per cent or, for a hotel paying $1m in rates currently, a future bill of $2.6m.

But the coming bounty of the America's Cup alone was reason enough to find ways of encouraging new hotel and accommodation options, he says.

"The last Cup here was said to have introduced $450m into our GDP; it will probably be even bigger this time. But even then, we have new challenges - like super yachts, for example. There were a lot last time; expectations are there will be more this time and they will be bigger.

"We have to have somewhere to put them and work out ways to host them and entertain their guests or we will not realise the potential spend that comes from them."

Cooperation, collaboration and communication between sports bodies, tourism operators and others is also vital, says Croucher, citing the example of BDO clients contacted by two Volvo Ocean race teams recently, seeking accommodation on the race's Auckland leg early next year.

"That was the first they [the clients] had heard about the Volvo coming here," he says. "That simply should not be the case."

Citing statistics published on tourism business news website Tourism Ticker, Croucher says the potential for New Zealand to benefit from enhanced sports tourism is vast.

The Lions tour is estimated to have boosted our GDP by at least $135m, while the World Masters Games held in Auckland earlier this year is estimated to have brought in $53m.

Golf is another major area of growth and BDO is working with industry groups to monitor visitor numbers, behaviours and spend at selected golf courses. The rationale is obvious - a Tourism NZ estimate put the annual total value of inbound golf tourism at $329m as at August last year, with golf visitors up 23 per cent and their spending up 18 per cent. Golf tourists are said to spend 30 per cent more than the average.

Other sports events with attractive yields for the economy included the annual ASB Classic tennis (the 2015 event generated $1.9m for Auckland regional GDP, according to the council's events arm, ATEED) and the Downer Auckland Nines (ATEED say it has produced $23m over three years though the future of the event is currently uncertain).

The recent Audi Quattro Winter Games in several South Island venues, earned revenue of $4.7m from the 2015 event, according to one report.

Nor are big events the only way to increase revenue from sport, says Croucher. The estimated total market value of sport and recreation in New Zealand as at 2012-13 was just under $5 billion (source: Sport NZ, though this figure includes a much wider definition of value), including the activities of visitors when they arrive.

The Sport NZ/Statistics NZ figures show that 74.2 per cent of all international visitors go for "a walk, hike, trek or tramp" while in New Zealand and 56.2 per cent visit a natural attraction (mountains, lakes, rivers) while 44 per cent visit a beach. Walking and hiking tourists are also high-yield visitors, spending about 28 per cent more than the average tourist expenditure.

Those participation rates not only underline New Zealand's appeal, says Croucher, but is also an excellent base on which to build other complementing infrastructure and attractions "without detracting from that appeal."

"It's an exciting time for New Zealand," he says, "but we have a lot of work to do to make it [growing sports tourism] a success."

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