America’s Cup economic returns were “ much lower ” given the impact of Covid-19

One of the event organizers said New Zealand would incur a loss of $ 249.5 million that it invested in the Copa America, but that over time, the benefits would accrue.

The 36th American Cup is what the government calls a “mega event”, one looming on the horizon, the other being the FIFA Women’s World Cup 2023.

The government and Oakland Council invested a combined $ 249.5 million in the America’s Cup, with the government spending $ 136.5 million and the Oakland Council spending $ 113 million on public infrastructure, with another $ 20 million earmarked for downtown retrofits.

This impressive event is known to attract large numbers of wealthy visitors, who pour millions of dollars into the local tourism, hospitality and retail sectors.

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But with the country’s borders closed to nearly everyone except for returning New Zealanders, the event and those who would benefit from it will have to rely largely on local spectators, and the enduring image of New Zealand that appears to the world.

Outlook for 2017, Which included errors When initially presented to decision makers, He expected the event to add between $ 600 million and $ 1 billion to the New Zealand economy, and boost employment by 4,700 to 8,300.

Revenue has been estimated at between $ 1 and $ 1.14 for every dollar spent. But in the long term (through 2055), every dollar invested in infrastructure will generate roughly $ 7.50 in economic activity, according to projections.

When New Zealand hosted the 1999-2000 Copa America, the event contributed an estimated $ 640 million ($ 981 million when adjusted for inflation) from the country’s economic activity.

The 2003 Copa America boat race, also held in New Zealand, produced $ 529 million in gross value added for the economy ($ 745 million when adjusted for inflation).

It is expected that between 21,500 and 26,275 international visitors will arrive in New Zealand to attend this year’s event.

Nick Hill, chief executive of the Oakland Unlimited Economic Development Agency at the Oakland Council, said that number is now likely to be zero.

“We know how many people we expected, and we now know that it may be close to zero,” Hill said.

The event must now rely on local visitors as well as members of the three outside teams and their families. He said each team has at least 200 members.

“This is not trivial.

“There will be benefits, but it certainly won’t be the level we calculated at the start.”

He said the investments that have been made, mostly in infrastructure, are still “worth every cent.”

“Will the crown get back financially what it spent, or the council? No, I think these benefits will materialize over time.”

He said that an event like the America’s Cup forced the board and other investors to make decisions and take action faster than they would.

“If you don’t have a deadline, a lot of these things drift forward and there is a lot of cost.”

With the borders closed, he said there would not be the same level and mix of benefits that would have been expected otherwise, but that there was still a beneficial investment in an important event.

“I have no doubt that Oakland and the CBD in particular will be better off because of the America’s Cup.”

He said the same level of infrastructure investment would not be required again if Oakland were to host the next America’s Cup.

“The cost effect on the board that I envision next time is going to be a fraction of anything that’s spent this time.”

He said having an international audience watching a high-profile sporting event unfold in the beautiful Auckland harbor, with (at the time of writing) virtually no restrictions on Covid-19, was also of great value to New Zealand.

“This is a very important silver lining.”

Hill said the America’s Cup was an opportunity for Auckland and New Zealand to connect with the international boat and marine community and cement its position as a market leader.

He said the yacht, which is between 30 and 50 million in length, will spend on average about $ 1.8 million while in New Zealand.

He said spending increased to $ 6.3 million on 70 million yachts plus yachts.

He said investing in new and improved infrastructure for the 36th America’s Cup will enable Auckland to compete with international luxury yachting destinations due to the increased berthing capacity.

However, Oakland Council’s Banoco recently said It is expected to get $ 3.2 million from 22 dock cancellations due to Covid-19 restrictions.

New Zealand marine industry said less than Half the originally expected number of luxury boats He was expected to visit.

MBIE’s Major Events Director, Susan Subridge, said the economic assessment for 2017 was based on a number of assumptions that have changed, including the number of unions that were expected to race.

Five overseas unions signed up to challenge Emirates Airline New Zealand for the America’s Cup, but USA Team Malta Altus and Stars + Stripes withdrew leaving Luna Rossa, New York Yachting Club American Magic and UK’s Ineos Team to compete.

“On top of that, Covid-19 will have a huge impact given the border closures,” Saubridge said.

As a result, she said, the economic return will be much lower than originally expected.

She added that no revised forecast will be drawn up and the event’s return on investment will not be known until it expires.

She said the economic evaluation in 2017 helped support investment in the event.

“Since the investment for this event has already been committed, no review of the economic assessment was undertaken prior to the event.”

She said MBIE has contracted with an outside provider to produce an “Impact Assessment Report” which will be available to the public once completed.