World Series generated $8.6 million
The Louis Vuitton America's Cup World Series event held in October generated an estimated $8.6 million — some $6.9 million more than projected — in economic activity according to an impact study.
Minister for Economic Development Grant Gibbons said that while he was optimistic the estimated impact for the 35th America's Cup event in 2017 would also produce higher-than- projected revenues, he said the disparity would not be as extreme due to Bermuda's “natural carrying capacity”.
The Economic Impact Analysis Report for the World Series was produced by a consultant seconded to the ACBDA by a local accounting firm and represents direct investment into the Bermuda economy.
Approximately $6.1 million, or 70 per cent of the spend was generated from overseas sources.
Speaking at a press conference earlier yesterday, Dr Gibbons said: “The actual returns far exceed initial projections. This is clearly a very good result that builds on the overall benefit of hosting the America's Cup, the teams and all related events.
“We have only focused on economic activity that can be directly attributed to this event and have not considered any secondary spending or indirect economic benefits that might ordinarily be accounted in a full economic assessment. In that light, this assessment can be considered conservative.
“It is hard at this point to estimate what the increase may or may not be. There are a lot of months between now and then but I think we are optimistic. It would be incorrect to say we expect a multiple of what we estimated simply because Bermuda has a natural carrying capacity.'
The types of services consumed included hotel rooms; restaurant meals; corporate hospitality events; transportation; other boats; and shopping at the event village and other retailers.
What's more, the international media coverage reached a global audience of 14.1 million, described by Dr Gibbons as: “A huge positive contribution to Bermuda's international visibility in major tourism markets.”
Where the total economic impact was underestimated, so too were the net costs — an additional $135,000 was spent by government.
The economic impact was generated from a variety of sources including spending by travelling fans; competitor teams; America's Cup commercial partners and sponsors; the international media; the general public; the ACEA; the ACBDA; and the Bermuda Government and other taxpayer-funded amenities.
Peter Durhager, chairman of the ACBDA, provided additional detail on the breakdown of the report.
Local banks reported an additional $4.7 million in spending during the World Series week compared to an average week in October. To ensure a “fair and prudent” estimate, only $1.3 million of this spend was not included in the final figure of $8.6 million.
More than 10,000 people attended the event village on Front Street throughout the weekend and on the Sunday an estimated 550 boats, carrying about 5,000 spectators, watched the racing action from the Great Sound. About 1,499 visitors, including media and team members came to the island specifically for the event. Hotels enjoyed a 43 per cent increase in revenue compared to a usual October week while some $1.5 million was generated in retail sales.
Mr Durhager acknowledged the volunteers whose contribution was estimated to be worth $600,000 in volunteer hours plus waived fees and charges. The figure was not factored into the final impact but represents a reduction in operating costs.
Mr Durhager said: “This activity, coupled with $14.1 million of value in media exposure, illustrate the significant impact of the event and represents an excellent return on investment.”