Will the America’s Cup Rescue Bermuda’s Economy?
Published on June 17th, 2016
by Eric Platt, Financial Times
(June 17, 2016) – Bermuda’s decision to host one of the America’s Cup World Series events late last year drew thousands of spectators to Front Street, the bustling waterfront area framed by picturesque pastel cottages. Yachting’s most prestigious competition also brought a glimmer of hope to the island of 65,000 after six years of recession.
Its languishing travel and hospitality industry sprung back to life, with tourism expenditures on things such as food and souvenirs climbing nearly a third in October. By the end of 2015, Bermuda was expected to record its first annual expansion since the financial crisis.
But the path forwards for the 21 square mile archipelago in the Atlantic Ocean remains fraught, with its government caught up in lawsuits after a previous hotel deal failed to get off the ground. Questions over the sustainability of the rebound concerns analysts and hoteliers looking beyond the 2017 America’s Cup, which returns to Bermuda and which Moody’s estimates will add as much as 5 per cent to the island’s economy.
While investments worth more than $1bn have been planned through to 2020, the scars from unfinished hotels and resorts over the past several years offer a reminder of the difficulties developers and investors have faced on the small British territory, including high construction costs and the challenge of securing financing after the crisis. – Full story