Auckland as a gateway to NZ: Visitor spending falls, the city as a tech hub rises
Auckland is the gateway to New Zealand for most international visitors but it’s failing to make the most of that position, the latest State of the City report finds.
This is the fourth year the Committee for Auckland has commissioned the report, which compares the super city to others globally.
It finds Auckland is fast becoming an innovation centre and taking baby steps towards becoming a tech hub, spurred on by Mayor Wayne Brown’s Tech Alliance.
“We’re seeing growing momentum in innovation, and not just the big ones we’ve heard of such as Halter,” the Committee for Auckland’s Mark Thomas told the Herald.
“That’s really positive and we’ve still got this exceptionally strong natural asset base, which is such a drawcard for Auckland, so those are some really positive developments we’ve seen in four years.”
The Business of Cities prepared the report, adding to the work of the Auckland Action Agenda, which has identified five key areas of focus to grow the city.
Those are reinforcing Auckland as the global gateway city, the innovation and talent engine, new connections in the city centre, treating the city’s natural strengths as an asset, and expanding homes, neighbourhoods and opportunities.
Auckland has risen to 17th out of 300 cities in the Rising Stars category for technology ecosystems.
But we’re falling behind peer cities in other areas.
“Our capital flows are still too weak and so, as a consequence, it’s harder for us to hold on to the high-value companies that we create here.
“Seventy-three per cent of the traffic comes through Auckland’s airport, which is a great thing, a big opportunity. Auckland is a gateway city.
“We have a strong port, airports, but what’s happening is people are coming to Auckland, and, in many cases, they’re actually being surprised and, from a visitor point of view, haven’t spent as much time as they should have here.
“That means we need to be selling the international story more strongly. We’ve been a little bit quiet on brand Auckland.”
Auckland has lost almost 2 percentage points of its visitor spend share since 2019.
It is also one of only two cities in the report’s comparison group (the other being Helsinki) yet to recover its total visitor spending to pre-Covid levels.
Deloitte NZ chief executive Mike Horne said: “When Auckland attracts investment, talent, visitors and trade, the benefits don’t stop at the city’s boundaries. Auckland’s success matters because when we turn those advantages into stronger economic and commercial outcomes, the whole country benefits.
“Visitors arrive but don’t always stay long enough, investment comes but doesn’t always turn into long-term growth, and talented people come to Auckland but don’t always make it their home,” Horne said.
The Auckland Deal, signed in April, also provides opportunities – and hurdles – of the political kind.
“We need to get underway more quickly, frankly, delivering some of the promises in the deal,” Thomas said.
“I know the visitor levy is obviously a frustration. But we’ve got two different partners in this deal, who have different priorities, different ways of working.
“And if the Government thinks the visitor levy, that many other cities have, is not the way to go, but they also acknowledge there is a funding problem in the events area, and they’ve got new ideas, then we need to more quickly come up with a solution and not just kick to touch the proposed one.
“The Advanced Technology Institute is another example. The Government, when it established this after the science reforms, said that had to be headquartered in Auckland, but we need to make quicker progress getting that underway.”
Other areas such as transport, housing affordability and safety continue to be raised as issues that plague the city.
The report says other cities are better at keeping businesses as they grow and attract outside investment.
“From a start-up point of view, we need to streamline the way in which we can make start-ups get up and running. Our universities do a terrific job in their innovation area, doing spin-outs,” Thomas said.
“But then we don’t have really established depths of funding from different sources. Partly, it’s also making it easier for internationals, but even New Zealand investors. It can be too difficult sometimes to be able to reach and connect those new start-ups.”
Auckland Mayor Wayne Brown said: “Through new infrastructure and key initiatives like the Auckland Tech Alliance and NZIAT at GridAKL, we are building a green, connected global city that links Aucklanders to high-value jobs and global capital.
“To sustain this momentum, we must tackle the productivity drag caused by congestion and sprawl. We need stronger public-private alignment, which can be done through the Auckland Deal and the Tech Alliance. We need local economic tools like a tourism levy, and a central government with the appetite to really get behind Auckland.”
The report compared Auckland to a number of other cities including Stockholm, Helsinki, Milan, Calgary, Bogota, San Francisco and Dubai.
Auckland’s natural environment within 60 minutes of the city centre is rated exceptional, but transport emissions are in the bottom 12%.
And it is in the bottom 10% of cities for residential density, street connectivity and access to mixed-use areas.
The report outlines the benefits the soon-to-be-opened City Rail Link expects to provide, with $6 billion of private investment in the city centre pipeline.
The conclusion: Auckland is not making the most of what it’s got.
Katie Bradford is a senior correspondent at the Herald. She has been a broadcast journalist for over 20 years and was based in the Press Gallery for 10 years. She specialises in politics, business and Auckland issues.