The Economic Impact of the America’s Cup
Tia Winter | 4 January 2018
The America’s Cup is a prestigious race that is held between 2 sailing squadrons. The world’s top ship designers and sailors have always been drawn to the sophisticated event, which is held between the defenders who won the previous race and a challenging team who is trying to claim the trophy for themselves. The challenging team is determined by a series of races leading up to the event.
Part of the event’s glamour and allure is the many controversies and legal disputes that it has been involved in, as everyone vies for a chance to lift the beautiful trophy that is known affectionately as the “Auld Mug”.
The 35th edition of the America’s Cup has just been completed, and the Royal New Zealand Yacht Squadron are the new defenders. The 36th America’s Cup is scheduled for the early part of 2021, with the title being channelled by Italian team Circolo della Vela Sicilia, represented by Luna Rossa Challenge.
Location of the 36th America’s Cup
Defenders are usually the automatic hosts for the next America’s Cup, which would make New Zealand the location for the next event. This is a huge matter of pride for the Kiwis, with Grant Dalton, Team New Zealand Chief Executive Officer, going as far as saying the only reason they challenged Bermuda in the 35th Cup was to bring the race back to New Zealand.
Having said that, however, Dalton also acknowledged that there was nothing definitively planned as yet. The idea is for the race to be held somewhere in Auckland, where the waterfront site would make the perfect stage for spectators to watch the finish, and for all the bustling activity that accompanies the Cup to be held. As it stands now, there are various plans that could be put into place for getting Auckland ready, but no specific decisions have been made.
The deadline for Auckland to prove that it is on track for building capacity for the America’s Cup event is 30 August 2018. If the organisers fail to meet this, the race will be relocated to Italy, home of the challengers. However, this is the last thing that the team or the event managers want, and they’ll go all-out to ensure that it doesn’t happen.
The America’s Cup Always Brings Prosperity
Bermuda generated a huge profit on the America’s Cup this year, with profits of NZ$483 to show for their efforts. New Zealand is hoping to mount a similar display, and the infrastructure is expected to be much better than it was when the event was last held in Kiwi waters, in 2003. In the words of Steve Armitage, one of the general managers with Auckland Tourism, Events and Economic Development, "We need to move at a speed that we are not renowned for - but we believe it is doable".
The dividends if it does indeed prove “doable” are hard to overemphasise. Land-based, online and mobile bookmakers should make a killing, as national pride gooses up the numbers of those interested in watching and betting on the event. The 2003 activities are estimated to have brought in 8100 permanent jobs, and the figure could be even higher this time around. The 2003 event was, after all, the catalyst for the waterfront transformation that Aucklanders are still benefitting from all these years later. In light of that, it seems only fitting for the waterfront to be the hub of this 2021 Cup.
Accommodation and the overall hospitality industry is also expected to see a huge surge in profits, to the extent that there may not be enough traditional hotel accommodation for all visitors. However, smaller operations such as Airbnb offers are expected to easily pick up any slack and allow private citizens to pocket a little profit here too. Overall tourism in New Zealand should also do very well; many people will be making quite a journey to see the illustrious race and will no doubt try to get a full holiday out of the trip.
The outlay for the country will also be substantial, and is said to be sitting around NZ$190 million at the moment. However, many people say that is should be considered a serious investment that will pay back handsome rewards over time. Prime Minister Jacinda Ardern has given interviews in which she is clearly thrilling at the prospect of the Auld Mug being raised in New Zealand in 2021, but she has yet to commit the government to any funding contributions.
Funding shortfalls could hopefully be made up by syndicates and regatta organisers, as was the recent case in Bermuda. In the end. New Zealand citizens and sailors are hoping that however it happens, the race culminates in their beautiful waters. The country has until the end of August 2018 to formulate a plan, start acting on it and show enough progress to keep them as the host, so there’s every reason to hope that they will.
Sources:
https://nzhistory.govt.nz/culture/americas-cup
http://www.nzherald.co.nz/sport/news/article.cfm?c_id=4&objectid=11927724