Te Papa forecasts $13m deficit, downgrades visitor targets

NZ Herald

4 days ago

'Te Papa does not generate enough funding to cover required capital investments to maintain Te Papa's building and experience assets [...] to manage inflationary costs, we will be examining ways to deliver our services as efficiently as possible in line with the legislated functions set out in the Museum of New Zealand Te Papa Tongarewa Act 1992.'
As a Crown Entity, it receives $44 million in funding each year from the Government and must raise at least $30 million on top of that to stay afloat, made up of partnerships, philanthropy and donations, and its commercial activities like corporate functions.
'Te Papa's commercial revenue is impacted by the current economic conditions, with the most significant commercial revenue stream, corporate functions also being impacted by the reduction in Public Sector spend.'
Te Papa, the Museum of New Zealand, Wellington, viewed from Lambton Harbour. Photo / Mark Mitchell
Before accounting for depreciation of its assets, the museum recorded a surplus of $1.98m, saying the fact the Government does not fund Te Papa for depreciation is why it has observed such losses.
Te Papa spokeswoman Kate Camp said the entity 'has a large number of fixed costs with large, specialised buildings, and collections that require expert care and housing'.
'Some Crown agencies are funded for depreciation, but Te Papa is not,' Camp said.
Kate Camp. Photo / Ebony Lamb
Camp said the slow recovery in the tourism sector has seen the museum take a hit, with the market being at only about 85% of where it was pre-Covid.
'New revenue streams will come from building on existing offerings like guided tours and paid-for exhibitions.'
It is considering charging for more experiences, Camp said, but maintained entry to Te Papa will always remain free for New Zealanders.
As for whether the entity would be seeking further Government funding to support its financial recovery, Camp said they are 'always involved in active dialogue with our monitoring agency (Ministry for Culture and Heritage) about what we deliver and the resources required'.
Te Papa says maintenance and depreciation of its large, specialised buildings are responsible for its financial struggles. Photo / Mark Mitchell
It comes a year after Te Papa first announced it was introducing a $35 international visitor fee, citing the increased cost of energy, insurance and staffing.
The charge was implemented in September last year and reportedly brought in $750,000 in its first two months.
Camp said the new fee is delivering in line with targets and is projected to raise approximately $3m over the first 12 months.
The museum is hoping for a 3% increase in international visitor entry, citing growth from international markets as a 'new focus' for the organisation.
Board Chair Chris Swasbrook said Te Papa earns almost half its annual income itself and has a 'continual focus on achieving operating efficiencies for the taxpayer'.
Arts, Culture and Heritage Minister Paul Goldsmith holds the responsibility for Te Papa and said the museum's finances are an 'operational matter', but noted the Government 'expects all its entities to operate as efficiently and effectively as any other private business'.
Justice Minister Paul Goldsmith at Parliament. Photo / Mark Mitchell
While the museum's financials paint a less than rosy picture, it continues to perform well in visitor satisfaction with more than 97% of adult visitors reporting being 'satisfied' to 'extremely satisfied' for overall museum experience during their visit in the last financial year.
Last month it was announced as the number one tourist attraction in New Zealand for the second year running and was named in the top 1% 'Best of the Best attractions worldwide' by Trip Advisor.
The tourism sector continues to struggle post-Covid, with the latest International Visitor Survey showing spending by international tourists had jumped 9.2% in the last year to $12.2 billion but still remains below pre-Covid levels.
In Wellington specifically, the sector contributed $862.9m towards the capital city's GDP in 2024, making up 2.5% of Wellington's economic output, Infometrics data shows. In 2000, that number was 3.2%.
Tourism hasn't grown as a sector in Wellington at the same level of other centres, with the economic output in Wellington City's tourism sector increasing by only 2.2% in 2024, compared with an increase of 10.2% for New Zealand as a whole.
Ethan Manera is a New Zealand Herald journalist based in Wellington. He joined NZME in 2023 as a broadcast journalist with Newstalk ZB and is interested in local issues, politics, and property in the capital. He can be emailed at [e-mail].