A projected $39 million loss from staging the 2011 Rugby World Cup has to be seen as part of the marketing budget for New Zealand and is worth it, on balance, Prime Minister and Tourism Minister John Key says.
Mr Key was responding to questions on the fairness of taxpayers underwriting the event during a media conference on the last day of the Trenz travel trade show, in Queenstown, yesterday.
He said the International Rugby Board owned every cash flow, apart from ticket sales, and it was the only way to make money.
"We may lose $39 million, we may arguably lose a little bit more, but we may lose less," he said.
The overall economic benefit to New Zealanders in meeting the liability "will be very significant".
The Rugby World Cup would generate "billions" of dollars in economic stimulation.
The tournament would create "more economic activity and longer-term spin-offs" and he referred to the British and Irish Lions rugby tour, in 2005.
"This is why we've got a six-week [Real New Zealand] festival across the country, it's why we've got 1000 events away from rugby, because it's not very often the eyes of the world are on New Zealand.
"This is one occasion, so I think in the scheme of things it's pretty good value."
Mr Key said New Zealand wanted to increase tourism numbers, but also wanted to make sure it marketed itself as providing a good experience when people visited.
"We're trying to make sure we have people who stay for as long as they can and spend while they're here," Mr Key said.
The ministry continued to pinpoint those who may have an interest in visiting New Zealand in critical markets through digital technology.
The country had to make sure it was relevant, by giving visitors experiences they want, rather than assuming the experiences they might want, he said.
Tourism New Zealand's new budget, at $85 million and not $99 million, was less than the year earlier, but more than two-years ago, and was a reflection of a general "tightening of belts", he said.
Money spent had to be effective and targeted and the Rugby World Cup would offer "enormous promotion" of New Zealand, with one billion people watching.
Less spending by visitors in New Zealand could be explained by exchange rates working against them and a changing pattern of spending from major western markets, he said.
Mr Key and Aassociate Minister of Tourism Dr Jonathan Coleman left the conference to meet and greet Trenz delegates in the Queenstown Events Centre.
