America's Cup $640m boost to NZ economy

By BERNARD ORSMAN and EUGENE BINGHAM

The America's Cup brought $640 million into the New Zealand economy and created work for thousands.

The scale of the economic boost, which the country can look forward to again when we defend the Cup in 2003, is revealed in an assessment published yesterday.

Racing syndicates, superyacht owners and millions of spectators spent $640 million during the regatta, the Government's Office of Tourism and Sport report found. Auckland's share during the six months of Cup racing last summer was $473 million.

Tourism Industry Association chief Glenys Coughlan said NZ's benefit from the America's Cup on a per capita basis could outstrip Australia's benefit from the Olympics.

"Unlike Sydney, we have the opportunity to repeat the benefits of the America's Cup over and over again, so long as we keep winning."

Last summer's event led to a 1.4 per cent growth spurt for Auckland and pushed the national economy along by 0.8 per cent.

The racing syndicates, their organisers and sponsors poured $194 million into the economy, local and overseas spectators spent $211 million and spending by the owners of superyachts is calculated to have contributed $118 million. The marine industry benefited most from the Cup, earning $127 million.

The spendup created extra work equivalent to 10,620 fulltime jobs, of which 8070 were in Auckland.

The long-awaited report, written by consultant Dr Doug Fairgray in conjunction with Ernst & Young at a cost of $150,000, was released yesterday by Prime Minister Helen Clark. It was commissioned by the previous Minister for the America's Cup, Murray McCully. The National Government gave $10 million towards the yachting and marina facilities at the Cup village.

Helen Clark, whose Government has given $5 million to help Team New Zealand retain the Auld Mug, raved about the benefits from the Cup and the way it had opened up traditionally tough overseas markets such as France and Italy.

She said the report had been necessarily conservative and the impacts would be much greater than what it found.

"If you look at the intangibles, such as the extra TV, radio and print coverage which New Zealand received around the globe, the confidence it brought to the country, particularly Auckland, it was worth billions."

A separate report on the media coverage, prepared by the Louis Vuitton Cup challengers, found that the Cup received 1948 hours of worldwide television coverage (720 hours in 1995) and 13 billion internet hits.

Dr Fairgray's report measured direct expenditure that would not have been spent otherwise and indirect spending that flowed through the economy. It was conducted between October 1999 and March 2000 and was based on 10,600 interviews with international and domestic tourists and 360 businesses.

"The final total was somewhat larger than what I had expected," Dr Fairgray said. A major factor in the Cup's success had been the creation of the Cup village, which attracted 4.2 million visits during the regatta.

"The people who had the foresight to bring the focus of the event within one place, within the centre of the city, have to be congratulated."

Auckland Chamber of Commerce chief executive Michael Barnett said the Auckland marine and tourism industries were continuing to benefit from the Cup but bars and restaurants were finding it tough. Two top harbourside eateries, Viaggio and Anzu, have closed and others have been put up for sale.

Peter Busfield, the executive director of the Boating Industries Association, said better than the $127 million boost from the Cup was the ongoing expansion of the industry such as the planned $80 million superyacht facility in Whangarei and the increase in superyacht servicing and refits worth $70 million a year and set to continue even if New Zealand loses the Cup in 2003.

Auckland Mayor Christine Fletcher said Aucklanders had been fortunate to experience the excitement and economic vitality of the Cup, but the report showed the benefits were shared by the whole of New Zealand.

She was disappointed the Government had not given any funding for the running of the Cup village at the next event, which Auckland City Council last week handed over to Team New Zealand for $600,000 and a commitment to keep the area clean and provide security.

In return, Team New Zealand get lucrative naming and sponsorship rights to the Cup village.

The America's Cup economy:

* Created 8070 jobs in Auckland.

* Brought 4.2 million visits to Cup village.

* Boosted GDP by $640 million.

* Achieved 13 billion internet hits.

Herald Online feature: America's Cup