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Biggest Bermuda story since civilian flights

The America's Cup could refloat Bermuda by pumping a massive $300 million into the economy, an economist said yesterday.

Peter Everson, owner of PE Consultants, said that the challenger's series of races at the start of 2017, in addition to the main event months later, could result in a year-long bonanza for Bermuda.

“This would have the biggest economic impact on Bermuda since the airport opened for civilian flights,” he predicted.

Mr Everson said San Francisco, which hosted the prestigious races in 2013, had reported a $550 million boost from the event.

“Bermuda won't get all of that because they [San Francisco] had a lot of day trippers who went down to the water and watched a day's racing,” he said.

“But just assume Bermuda only made $300 million, for the sake of argument. Although Bermuda's gross domestic product is more than $5 billion with international business, the domestic economy is probably something more like $3 billion — $300 million is 10 percent of that. That gives you an idea of the scale of the impact of that.”

Mr Everson added: “That's only a guess, but I see no reason why Bermuda wouldn't get as much as San Francisco and all we are doing is cutting out the lower-value spectators who pay least.”

Mr Everson said that, aside from the obvious benefits to tourism and hospitality, companies involved in telecoms would get a huge boost from the Cup.

He added: “Construction will have a boom, of course, but everybody from the obvious people like hotels and restaurants who will gain extra revenue and the people who own the pipelines out of Bermuda will profit because all the media, all the pictures, will beamed around the world.”

What's more, Mr Everson believes the event would also offer a host of job opportunities, particularly for younger Bermudians looking for a start in a lucrative career, especially outside the international business sector.

“This should be their best chance to develop careers outside international business because there are so many jobs in communications and the media so they will be flying in lots and lots of people,” he said.

“Working alongside them will be so good for them and give people lots of ideas on how to make money.

“The America's Cup is a wholesale marketing machine and there will be lots of first jobs all over the place.”

Mr Everson said the event would also attract wealthy groups of people to the Island — the kind targeted for investment in Bermuda.

“The crucial thing for major sports events like this is the vast amounts of money coming from corporate sponsors,” he said. “All these corporate sponsors will be flying in their most-valued customers from all over the world and these people will be spending thousands of dollars each.

“I would expect every Bermuda business owner to be looking to their physical plant and looking at what they can do to participate in the economic expansion.

“It's incredible because it will establish Bermuda's brand value. That's what happened in Singapore after it got its first Formula One Grand Prix; the America's Cup is similar to that.”

Mr Everson was backed by Phil Barnett, the chief of Island Restaurant Group, which operates fixtures on the social scene such as Barracuda Restaurant and Hog Penny in Hamilton, and Frog & Onion and its brewery in Dockyard, close to the venue for the sailing.

“We are waiting with bated breath,” Mr Barnett said. “Bermuda has the infrastructure capabilities to take care of significantly more business than we have.

“The restaurants can finally put themselves on a more secure footing from the point of view of stability and be able to pay their creditors and become profitable entities, which is huge because the last five years have been incredibly trying.

“The exposure the America's Cup will give to a global audience that may have forgotten where Bermuda is and what Bermuda is is incredible.

“For people to be saying ‘America's Cup' and ‘Bermuda' in the same sentence will have a real positive impact on individuals. Either way, 40,000-50,000 more air arrivals per year will solve everybody's problems and puts us back on track.”

Mr Barnett added: “The only people we will be getting are the cream of the tourism market and they will be spending money commensurately — we're all looking forward to happier days.”

A spokeswoman for the Island Store, which has shops in Hamilton, St George's and Southampton, said: “It will be great; it's extra traffic. We see a boost with other races. We have extra customers and they come back every year and they come back in.

“The Newport to Bermuda race is small-scale compared with the America's Cup. It'll be great for the entire Island to have all that extra money pouring in and all these extra people on the Island.”

Claire Smith, owner of the Bermuda Triangle store in Dockyard's Clocktower Mall, said that she was looking at America's Cup-themed items and higher-end merchandise for the expected influx of wealthy visitors.

“The economic consequences will be fantastic,” Ms Smith added. “It's a huge coup for the Island, but a challenge at the same time. Hopefully, we can highlight the best of Bermuda and pull it off in style.”

Penny MacIntyre, partner in Rego Sotheby's International Real Estate, said the boom had already started, with inquiries flooding in from around the world about rentals, ranging up to three years for professionals involved in the series of races.

“There will be the short-term execution, which is rentals, and there are properties which are long-term execution, which will be sales, as well as the hotel condominium market and the fractional market,” Ms MacIntyre added.

“For the first time, we will have international presence at the price point of these type of visitors, who can afford properties around the world. We feel the momentum has already begun with us.”

Peter Everson mirrors the resounding 'Yes' that the Bermuda bid received in New York today.

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Published December 02, 2014 at 12:48 pm (Updated December 02, 2014 at 12:48 pm)

Biggest Bermuda story since civilian flights

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