America’s Cup delivers economic boost for Bermuda
Published on November 9th, 2017
(November 9, 2017) – The 35th America’s Cup will generate a $330 million boost to the island’s economy, while the event itself came in nearly $13 million under budget, the ACBDA (America’s Cup Bermuda) announced this afternoon.
The $336.4 million impact on the island’s Gross Domestic Product includes a predicted $90.8 million in future tourism spending over the next five years from the exposure Bermuda received from hosting the event.
The 2017 sailing spectacle, which was originally forecast to cost the island $77 million, ended coming in $12.9 million under budget, according to an independent Economic and Social Impact Assessment on the event conducted by PricewaterhouseCoopers.
“This represents a 525 per cent return on investment, including future tourism revenue,” a ACBDA statement said. “That is, for every $1 of the $64.1 million spent, $5.25 will be returned back into Bermuda’s economy, generating extra revenue for local businesses and residents and additional wages for local workers.”
The 62-page PwC report reveals that the America’s Cup generated $194.3 million incremental on-island spending in 2½ years from January 2015, which resulted in a $245.6 million boost to GDP.
The majority of the additional on-island spending came from the competing sailing teams and organisers, their support crew and families living and working in Bermuda and totalled $116.4 million.
Of the $194.3 million spent on island for the event 29 per cent went to hotels and restaurants, 14 per cent to real estate and rentals, and 13 per cent to the construction industry.
ACBDA chairman Peter Durhager said: “The indisputably positive economic outcome of Bermuda hosting the 35th America’s Cup is a clear example of Bermuda’s potential and proves that we can deliver large-scale projects under budget, on time, and at a world-class quality level, when the right combination of skills, good governance and transparency are present.
“We managed a $77 million budget down to $64.1 million, while still achieving resounding success. This is the benefit of strong public-private sector collaboration.
“The greatest economic value to Bermuda hosting the America’s Cup came from the 450 team members and organisers who moved to Bermuda with their families, living and working in our community, buying groceries, cars and bikes and renting homes from Bermuda landlords.”
The America’s Cup led to a 15 per cent increase in commercial air arrivals during the competition in May and June 2017 compared to the previous year, as well as a 7.5 per cent increase in hotel occupancy rates compared to the same period of the previous year.
According to the PwC report, $28.7 million was spent in Bermuda by international visitors who would not have been on the island if the America’s Cup had not been hosted.
A further $14.4 million was spent in Bermuda by the 745 superyachts and other visiting yachts in May and June of this year alone.
Meanwhile the Bermuda Government received additional tax and other revenues of at least $4 million.
ACBDA CEO Mike Winfield said: “We went into the bid process with a view to the event economically benefiting Bermuda, demonstrating that Bermuda had the capacity, skills and determination to deliver an event of this scale to international standards, and ensuring that brand Bermuda was put before a wide international market. We have succeeded on all counts.
“We did this by defining our goals upfront, spending an incredible amount of time and effort in the planning process, testing those plans, engaging with a wide cross section of the community, harnessing their expertise, energy and determination and then staying focused on our deliverables.
“The collaboration between ACBDA and America’s Cup Event Authority proved to be a win-win, which positions Bermuda well for future events.”
The America’s Cup attracted 452 million viewers across the world and was broadcast in 163 other countries by 31 broadcasters.
About 17,000 Bermuda residents attended the event, while 94,600 ticket holders were scanned in through the entry gate of the America’s Cup Village from May 27 to June 26.
More than 1,600 students aged between nine and 12 participated in the America’s Cup Endeavour Programme.
The PwC report found that of the residents who attended, 64 per cent were white, 15 per cent were black and 14 per cent were “mixed and other”.
America’s Cup Event Authority CEO Sir Russell Coutts added: “As the rights holder and organiser of the 35th America’s Cup, ACEA entered into the host venue agreement with the Government of Bermuda in early 2015 with an objective of a commercially and financially sustainable America’s Cup campaign as well as growing the event and sport globally.
“In meeting this aim, all sponsorship fees and guarantees received from Bermuda were reinvested back into the local economy by hiring local vendors, service providers and staff.
“Through the global sponsorship, licensing and merchandising, broadcast, superyacht and ticketing commercial programmes, including the crucial partnership with Bermuda, ACEA was able to achieve its revenue goals and control its costs in order to generate a minimal surplus over the three-year cycle of the 35th America’s Cup.”
Source: The Royal Gazette