ACBDA: Event Cost $64.1M, Generated $336.4M
The cost of hosting the America’s Cup was $64.1 million, and it generated economic activity of $336.4 million, the America’s Cup Bermuda [ACBDA] said this afternoon [Nov 9], adding that the event came in “under budget” and the revenues “exceeded forecasts.”
The 45-minute live video replay is below
The ACBDA said, “The price tag for hosting the 35th America’s Cup has come in well under budget, at $64.1 million; that’s nearly $13 million less than expected and the revenues generated in Bermuda from the event, have exceeded forecasts.
“When Bermuda was announced as the host venue, the government committed a $77 million investment and forecast a return of $242.2 million additional economic activity. Instead, the project cost just $64.1 million [including all direct spending] and generated economic activity of $336.4 million, a significant $94 million more than forecast.
Chart extracted from the PwC report
“This represents a 525% return on investment, including future tourism revenue, that is, for every $1.00 of the $64.1 million spent, $5.25 will be returned back into Bermuda’s economy, generating extra revenue for local businesses and residents and additional wages for local workers. Already, money actually spent during the two and a half year period has returned $3.80 to the economy for every $1.00 invested.
“It should be noted that WEDCO spent some $39 million building Cross Island, a perpetual asset that served as the venue for the Event Village and which has future commercial revenue opportunities being developed by WEDCO.
“ACBDA paid $1.35 million to utilize the land for the Event. ACBDA also contributed significant infrastructure improvements to the site which has ongoing legacy impact. Beyond this, no benefits or costs are included in this report on economic impact of the event associated with the construction of Cross Island.
‘Boost To GDP’
“This boost to Bermuda’s Gross Domestic Product [GDP], is a calculation of how money is recycled through the economy. This occurs when additional cash is received by Bermuda individuals and businesses, which triggers spending on extra wages and increased overtime, purchases of goods and services and incremental spending on leisure and recreational activities by locals and visitors.
“The majority of the additional on-island spending over the two and a half years since January 2015, $194.3 million, came from the competing sports teams and organizers, their support crew and families living and working in Bermuda. This underscores the concept that has long underpinned Bermuda’s transaction-based economy, that importing skilled labour stimulates the economy and creates jobs and prosperity for Bermudians.
‘$90.8 Million In Future Tourism Spending Over Next 5 Years’
“Further to this, $90.8 million is also calculated to impact GDP in future tourism spending over the next 5 years as a result of the media exposure Bermuda received from hosting the America’s Cup. There are already several significant events and conferences scheduled to take place in Bermuda during the next two years as a result of Bermuda having hosted AC35.
“These are the findings of an independent Economic and Social Impact Assessment of the 35th America’s Cup, conducted by PricewaterhouseCoopers [PwC] which analyses the impact of Bermuda hosting the event.
Infographic provided by the ACBDA [PDF here]
“The report draws data from the period January 1, 2015, after Bermuda was announced as the host country to August 31st, 2017, by which time most of the event infrastructure was packed away and shipped off island and most event personnel had left Bermuda. The approach and methodology of the PwC study is provided later in this report.
Advertising Equivalent Value: $80.9 Million
“The value of the global advertising exposure Bermuda achieved with television coverage of the America’s Cup, has been calculated at $80.9 million. This is known as the Advertising Equivalent Value [AEV].
” An independent report commissioned by the America’s Cup Event Authority [ACEA] determined this is what Bermuda would have paid for the same level of media coverage. This translates into future tourism spending over the next five years of a $90.8 million impact on GDP as revenues flow through the economy and it includes indirect and induced revenues.
“Importantly, this calculation uses a very conservative return ratio of only 1:1, although the $242 million projected economic impact from the ACBDA bid budget reflected the BTA standard multiple of 3:1, [AEV from the event to future tourism-related spending]. This $90.8 million is therefore conservative by any comparison.
ACBDA Chairman Peter Durhager’s Comments
ACBDA Chairman Peter Durhager said; “The indisputably positive economic outcome of Bermuda hosting the 35th America’s Cup is a clear example of Bermuda’s potential and proves that we can deliver large-scale projects under budget, on-time, and at a world class quality level, when the right combination of skills, good governance and transparency are present.
“We managed a $77 million budget down to $64.1 million, while still achieving resounding success. This is the benefit of strong public-private sector collaboration.”
Mr. Durhager said; “The greatest economic value to Bermuda hosting the America’s Cup came from the 450 team members and organisers who moved to Bermuda with their families, living and working in our community, buying groceries, cars and bikes and renting homes from Bermuda landlords.”
ACBDA CEO Mike Winfield’s Comments
ACBDA CEO Mike Winfield said; “We went into the bid process with a view to the event economically benefitting Bermuda, demonstrating that Bermuda had the capacity, skills and determination to deliver an event of this scale to international standards, and ensuring that brand Bermuda was put before a wide international market. We have succeeded on all counts.
“We did this by defining our goals upfront, spending an incredible amount of time and effort in the planning process, testing those plans, engaging with a wide cross section of the community, harnessing their expertise, energy and determination and then staying focused on our deliverables.
“The collaboration between ACBDA and America’s Cup Event Authority [ACEA] proved to be a win-win, which positions Bermuda well for future events.”
ACEA CEO Sir Russell Coutts Comments
ACEA CEO Sir Russell Coutts said; “As the rights holder and organiser of the 35th America’s Cup, ACEA entered into the host venue agreement with the Government of Bermuda in early 2015 with an objective of a commercially and financially sustainable America’s Cup campaign as well as growing the event and sport globally.
“In meeting this aim, all sponsorship fees and guarantees received from Bermuda were reinvested back into the local economy by hiring local vendors, service providers and staff. Through the global Sponsorship, Licensing & Merchandising, Broadcast, Superyacht and Ticketing commercial programs, including the crucial partnership with Bermuda, ACEA was able to achieve its revenue goals and control its costs in order to generate a minimal surplus over the three-year cycle of the 35th America’s Cup”.
PwC Approach & Methodology
“PwC’s approach to the economic assessment is a tried and tested methodology used globally for large scale events. The overall economic impact was estimated by capturing and analyzing the additional on-island spending which would not have occurred without the America’s Cup and estimating the ripple-out impact through the supply chain and on employees.
“The first step in this approach is to identify the various groups spending the money and to develop methods by which to collect that data. PwC identified four specific groups who were responsible for the vast majority of additional on-island expenditure:
- [i] America’s Cup Participants & Organisers
- [ii] Bermuda Government
- [iii] America’s Cup Spectators and
- [iv] Legacy Visitors
“PwC received data from the America’s Cup participants, organisers and Government directly. Information from spectators was obtained through a sample of spectator surveys and extrapolated to the spectator group.
“The additional on-island spend gathered by the key spending groups was analyzed using an input/output model which was based on historical government data. This was used to estimate the overall impact on GDP which is the sum of the direct impact, indirect impact [which is the effect of the supply chain] and the induced impact [which is the effect of employee spend].
“PwC collected information from surveys of local businesses solely to understand how businesses perceived the opportunity provided to them by Bermuda hosting the America’s Cup.
“While a number of businesses have publicly reported revenue increases, those revenues are driven by consumer spending and thus already included in PwC’s economic model through capturing the spectator spending [both by residents and overseas visitors]. No financial data was collected from businesses or any recipient of the on-island spending, it was collected only from the spending groups, so as to avoid any risk of double reporting.
Highlights of the findings of the Economic Impact report
The ACBDA said, “$194.3 million incremental on-island spending in 2.5 years from January 2015 – August 2017 [producing $245.6m impact to GDP] and $76.3 million future tourism spending [$90.8 impact to GDP] translates to $336.4 million impact on GDP. Who spent what?
- $116.4 million was spent on-island by AC35 teams, sponsors and volunteers; they were the most significant immediate contribution to the Bermuda’s. The GDP impact is $143.1 million.
- $28.7 million was spent in Bermuda by international visitors who would not have been in Bermuda if the America’s Cup had not been hosted here. This translates to a GDP impact of $42.1 million in tourism dollars.
- $14.4 million was spent in Bermuda by 745 superyachts and other visiting yachts, a $20.5 million GDP impact in just two months, May and June this year.
“Which sectors benefited from this spending?
- The $113.1 million spent by America’s Cup teams, support crew and their families went to local contractors, fuel, shipping and logistics, event operation costs, public relations and communication costs, business support costs, base setup and running costs, catering, food and beverage, repairs and maintenance, salaries and wages, accommodations, insurance including health insurance, medical expenses and education.
- $1.7 million revenue was generated by local food and beverage vendors in the America’s Cup Village, including the Gosling’s Dark n Stormy Bar, all managed by Bermudian restauranteur Chris Garland.
- The industry sectors that fared particularly well were hotels and restaurants, receiving 29% of the incremental spending, real estate and rentals [14%], construction [13%], wholesale and retail trade and repair services [10%] and business activities [9%]. Other sectors that benefited include community, social and personal services, transport and communications, education, health and social work, electricity, gas and water supply and financial intermediation.
Infographic provided by the ACBDA
- The Bermuda Government received additional tax and other revenues of at least $4 million, although there is insufficient data to quantify the full amount. Examples of these government revenue sources include, superyacht mooring and berthing fees, visiting vessel charter and permit fees, ticket revenue from the Park n Ride service, incremental occupancy tax for hotels and cabin and passenger tax from additional cruise ship passengers, work permit revenue, payroll tax and social insurance for employees who relocated to Bermuda as a result of the America’s Cup, and duty on items that were sold after the event by ACEA, ACBDA and participating teams.
The ACBDA added, “Other numbers at a glance:
- 75% increase in private jet passengers
- 15% increase in commercial air arrivals for May and June 2017 compared to prior year
- 7.5% increase in hotel occupancy rates compared to same period of previous year
- 745 visiting yachts [including 134 superyachts] berthed in Bermuda in May and June 2017, compared to 57 visiting yachts in the same period in the previous year.
- 22% increase in retail fuel sales and 17% increase in industry fuel sales in June 2017 compared to 2016
- 12% increase in home vacation rentals
- 14% increase in cruise ship passengers [28,200 additional]
- 53 Bermudians employed full-time by ACEA, the racing teams and ACBDA
- 450 team members and staff on standard work permits and 360 family members [including 176 under 18] moved to Bermuda.
- 720 short term and periodic [3 – 6 month] work permits were issued. The majority left Bermuda immediately after the event. Each of these individuals contributed to the local economy, occupying house rentals and hotel rooms, buying food and generally spending in the local community, enrolling their children in private and public schools on the island, and participating in local sports and community programs. Many of those teams also made direct contributions to schools and local charities.
- $313 was the average spend by international visitors, per person per day [Source: PwC international spectator survey] This compares to $272 per day for usual air arrival visitors.
- Just over 20 tonnes recyclable garbage was collected over 22 event days and the use of 250,000 plastic bottles were avoided. For context, the entire Bermuda population recycles about 2 tonnes per day.
- 452 million viewers across the world saw Bermuda in spectacular fashion on award winning television.
Who attended Bermuda’s America’s Cup?
- 17,000 Bermuda residents attended [unique visits], each person went four times on average.
- 94,600 ticketholders were scanned in through the entry gate of the America’s Cup Village from May 27th – June 26th. This includes all areas, General Admission, Grandstand, Goslings Dark n Stormy bar, Longtail Lounge and Club AC, but does not include accredited personnel such as volunteers, staff, contractor, and media. The America’s Cup Village was open for 22 days. [Source: ACEA analytics of ticket sales.]
- 71% of the tickets were sold to local Bermuda residents and 29% to international visitors mainly from United States [20.3%], Canada [3.4%] and UK [2.9%]. [Source: ACEA Footfall Overview from America’s Cup Village.]
- 25% locals stayed in Bermuda for the America’s Cup instead of overseas travel this summer. There was an 18% drop in resident air arrivals.
- 9,000 official spectator boat tickets were sold
- 62,000 people booked tickets on the dedicated America’s Cup Village ferries.
- 450 international media personnel were accredited to attend the America’s Cup Village.
Mr. Durhager concluded by saying, “We commissioned these reports to honour our commitment to deliver an independent assessment of the results of Bermuda hosting the 35th America’s Cup.
“The ACBDA was given a specific task to deliver on Bermuda’s obligations in hosting the 35th America’s Cup in a way that would make Bermuda proud and demonstrate that Bermuda is capable of undertaking similar challenges in the future. It is less important that ACBDA offer opinion on the value of hosting such an event, than to encourage public dialogue to that end.
“There were many, both locally and internationally, who said we could not achieve this objective. Bermuda has proved those cynics wrong. We have demonstrated that with clear objectives, adequate funding and partnership between Government and the private sector, good governance, focused and capable management and community engagement, Bermuda can deliver to world class standards and do so on budget, on time and with excellence. We hope that our work can serve as a model for the future.
“We present this economic and legacy impact information with the additional intention that it may be used as a platform of knowledge upon which to build for the future.”
Mr. Durhager continued; “It is the hope of the ACBDA leadership that as a community, we seize the momentum, the energy, the collective engagement of the community and the ‘can do’ spirit that was so prevalent in Bermuda during this period, and together seek new ways to grow our economy and Bermuda overall so that all Bermudians can see and feel the benefits. We simply cannot allow all that has been accomplished to quietly fade into history. We have a moment of real opportunity, which we hope will be leveraged.”
The 64-page PwC AC impact report follows below [PDF here]
Some mickey mouse event!!!
The Minister of Economic Development at the very least should make a public apology to the ACBDA and every Bermudian that gave up their time and committed so much to deliver this event that created solid value to the country.
As an official of this country that is the least he should do–MUST Do–we will forget his Mickey Mouse comment as he is really just an amateur just learninng the ropes of his new role.
Perhaps the America’s Cup event will provide him with a good blue print for the future.
Do the honorable thing Minister Simmons, make the apology–that will say so much about you if you do.
I wish you every sucess building on the America’s Cup momentum!
These are speculative figures going out 5 years so unless we live in Disney World this is all pure crap and spin!
Let’s deal with the actual numbers and not estimates or predictions
Shame on you PWC – you got paid to spin cotton candy at the circus
There is no way Bermuda got a 500+% on it’s money – cmon we are not that stupid!
These numbers are crap! Predictions of euphoric income 5 years into the future? Cmon PWC get a grip on reality and stop the OBA spin!
I guess no one has a calculator that works? Ain’t no way on Gods green earth we made 500% on our investment! If we did then every nation that hosted this event previously are morons and that is not the case!
Do the math again and come back with the real numbers!
They obviously paid you to put up two identical messages, Go away and Gofish.
It really is childish.
That’s pretty interesting because the oba/UBP told us that they never committed to $77 mill!
Of the residents who attended the event 64% was white 15% black.
They always stated the $77mn figure. And it came u$13mn under budget (i know pretty confusing for PLP supporters who are used to massive overruns).
And who cares about who went..you guys are obsessed.
WON
Fake news.
You can always tell the OBA Government that knows how to run a business and the PLP that knows how to run a business into a chicken farm. When I flew home tonight your PLP that you worship so proudly only had 4 Customs Officers on desk. Like Mayor Bloomberg said…………….. ‘Like night and day’…….it took us 1 hour. Pathetic.
It’s gotta hurt. Being so utterly wrong.
That was their choice not to attend …
what does race have to do with it? money is money.
I was never asked what color I am…people and their stats/surveys. My, how we know how wrong they can be..LOL
Getting my popcorn, a cold one and just going sit back and wait
I prefer a glass of wine.
I’ll sit back and wait for OJ and all the other haters who lied about the costs and said that we lost money on it to come on (after they get the crow out of their mouths) . I look forward to their comments now even though we all know that it’ll still be twisted into ‘not everyone benefited , blah ,blah ‘
Doesn’t matter, those who would prefer the island not move forward will find a way to dismiss even this. It was a “Mickey Mouse” event, after all
Oops.
Thats like saying there are over 2000 Billionaires in the world and people are still starving, the America’s Cup was a good promotion for Bermuda while a selected few benefitted and money was added to the economy (29% for Hotels but hotel staff were working at minimum hours)?, our infrastructures and unemployment was still in limbo.
So who really benefitted?
Right on cue as I expected .
Now, what was it you were saying over and over about the costs ? Weren’t you over $100 mil not too long ago ?
Who paid the Belco bill..oops that wasn’t included in A.C. expenses..
Upset that I overlooked your appearance on the list of haters ?
How much in duty fees were waived?
There would have been no duty if the AC hadn’t happened. !!!!!!! Please engage your brain.
Wedco
The Village doesn’t and didn’t have a Belco line. It was all run off generators. PPPAAAAAA!!!! Try again.
S.T.F.U.
That is all.
That’s what I told the OBA election day and than I threw 12 seats at them the same night
. NOw S.T.F.U. oba That is all
awww, so hurt that it was really a success despite every effort to lie about the numbers and discredit it at every turn that you have to resort to the tired and tawdry ’24-12′ ?
Indeed. Can’t wait to see what Goofy has planned to keep top this Mickey Mouse affair.
And that is all u lot have. A dam score lmfao. Ignorance truly is bliss. See what happens in a few months lmao. Sit down and S.T.F.U.
Nice try.
Game. Set. Match.
The people who put themselves forweard an made the effort are the one’s that benefited.
The one’s who sat back, complained and waited for handouts didn’t.
Simple enough for you?
Everyone benefited… some more than others for sure – but everyone benefitted…
S T F U you moron.
The people who got involved and worked hard benefitted. There were no handouts.
Thanx AC35,I got my small piece of that pie.
“So who really benefitted?”
Everyone with the skills and desire to work for a living.
So, everyone except you, OJ.
Oh dear, and for seeing the possibilities, getting behind the various groups needed to make it happen, for being the success that it was, for leaving lasting benefits for future generations to enjoy, the OBA gets thrown out as the Government that made it happen. If this was not Bermuda it would be completely unbelievable.
12M under budget – GREAT
194.3M of revenue – GREAT
90M of projected future additional revenue – how do you qualify/quantify this figure????? C’mon more fuzzy accounting! I only run with tangibles.
I’m with you strange math indeed
You can throw that number out if you like. Still an overwhelming success.
And it’s not as fuzzy as Burts numbers on the costs etc. Don’t forget to question that. It was just pure deceit.
Read the methods section of the report. Its explained in there.
At OJ, seriously brah?
This is really, really, really, really great!!! Now… use some of this to pay down the debt!
None of this was government revenue…
Govt is left is debt…
Thanks to your PLP the first time in office Lol
The government invested in expanding the economy. It’s the opposite of austerity. You prefer austerity, I take it. Well good, that’s what’s coming.
It will be gone in 6 months. Look at the spending going on since july
Sadly Triangle Drifter – it is Bermuda and IT DID HAPPEN.
Only Bermuda could throw out a government that was turning the economy around, getting us out of huge debt and put back in the very same government that financially screwed us in the first place and will do the same again this time around.
It beggars belief.
Thank you OBA. You did good. Here is the proof in hard fact. Not speculation.
Bermuda truly is another world…
They doubled the debt in 4 years…….
Lies.
Do you understand what a budget deficit is? It is when a government spends more money than it earns. When the PLP came to power in 1998 we were running a budget surplus (that is Bermuda earned more money than it spent). In 14 years the PLP reversed this surplus into a budget deficit of $250m (that is each year they were spending $250m more than they earned) and ran up debt to $ 1.4bn, and despite what they say this trend pre dated 2008.
In order to fund this massive overspend, without sacking the majority of the civil, the OBA were forced to raise the debt ceiling and actually refinanced the debt at a cheaper interest rate. They then set about reducing the deficit (by over half) an were on track for a surplus by 2020 meaning we could pay off the debt.
But let’s not let facts get in the way of your snappy sound bites!!
My question is what would the PLP have done and what do they plan to do now (their silence on the issue is deafening)
The Scorpion and the Frog
A scorpion and a frog meet on the bank of a stream and the
scorpion asks the frog to carry him across on its back. The
frog asks, “How do I know you won’t sting me?” The scorpion
says, “Because if I do, I will die too.”
The frog is satisfied, and they set out, but in midstream,
the scorpion stings the frog. The frog feels the onset of
paralysis and starts to sink, knowing they both will drown,
but has just enough time to gasp “Why?”
Replies the scorpion: “Its my nature…”
Im sure most people just read the headline then decided to comment…. The people who were gonna make money…. did. Simple as that. Myself included, but majority of Bermudians are still in the same hole as they were b4.
Oh, you mean like the other 95% of the world? Welcome to capitalism, play the game or don’t.
List the expenses not on the A.C. ledger…
How much did it cost to build that island..oops that’s not part of A.C. expenses.
That’s in the $39 million WEDCO number.
Rhona, that’s because it’s a capital expenditure that provide future benefit. I realize the fact that AC was such a massive success is an inconvenient truth for some
Only 24 -12 matters now. On with Tax, Immigration, and Marriage reform to complete the Bermuda for only Bermudians sweep with the 3 Bees of Brown, Burt & Burch leading the Brigade into the hands of the hands of the Mickey Mouse Monetary Fund forever……
The facts from this report show that this was a SUCCESSFUL event and that those who comprised the ACBDA deserve a round of applause.
This also shows that when we all pull together we can accomplish much more than when we focus divisiveness.
The fact that this success was accomplished during the OBA’s tenure will, of course not play to narratives that some like to continually spout. Instead of continually recycling 1960′s rhetoric we should be grasping this achievement and looking towards taking all we have learned and repeating it with other events to enable upcoming generations a future.
This is a case of Fox reporting on the welfare of the hens.
Rhonda, you are way off base………….in fact …”These are the findings of an independent Economic and Social Impact Assessment of the 35th America’s Cup, conducted by PricewaterhouseCoopers [PwC] which analyses the impact of Bermuda hosting the event.”
Rhonda, if you truly believe that PwC is being untruthful on this, challenge them on it – there are serious professional consequences for these people being deceitful
I DARE YOU
Where is the tab or line item staying direct payment to public coffers..
The direct cost is provided..what is the indirect cost
Here’s a better question. What is the PLP doing to build on the successful America’s Cup and grow more opportunities like it?
Nothing. Too busy restricting human rights and taking a year to install wifi and fit out a playground. Amateurs.
Is Bermuda better off with or without the AC? doesnt matter, just keep using dogma…after all this success story too shall pass.
Thank you OBA for taking the risk. All of us in support of this event knew it would be a success. Just to bad these numbers weren’t out before the election.
But sad key lies won this election
Present Govt will hv the extra money gone in 6 months
“This underscores the concept that has long underpinned Bermuda’s transaction-based economy, that importing skilled labour stimulates the economy and creates jobs and prosperity for Bermudians”…thjs is just one of the very good and simple points that we must take heed of. The way this joke of a govt is taking could be the end of our little home
All you PLP anti AC people can go suck lemons hahahahaha
The only people sucking lemons is the oba floppers. At this rate you will be opposition for 20 years and I use to vote for you guys. Now you don’t have the surrogates so I see your true colors shining through.
you should be looking at the TRUE colours of the PLP! they are discrimanatory party. their racial makeup is the least diverse and they want to take rights away from a group of Bermudians. THAT should wake YOU UP!
Why didnt the plp release this information weeks ago?
hahah! the plp didnt get any of it!
One of the PLP MP’s worked as a driver.
62,000 ppl purchased AC ferry tickets? Lol ok
yes. do you realize how many people were here and went every day? it’s not hard.
What’s wrong? You get confused with numbers with more than two digits?
64.1 / 336.4 = .19
In other words, the Bermuda tax payer payed 19 cents for every dollar earned. If this was a long term, ongoing investment with further returns and little more capital investment, not a bad deal – only time will tell.
Two obvious things to me are that the expenditure was very uneven, practically to the point that you could say it was an oligopoly affair and the AC/Oracle organizers themselves drove a very hard deal with a lot of that 336.4 million going right back to them as royalties.
On the balance, it was worth doing rather than sitting around still doing nothing – Thank you Mayor Bloomberg and Mr. Grant Gibbons – but for the next episode, let’s sharpen our pencils. Golf (again) anyone?
By the way, that whole future spending thing – all very fuzzy.
I was self-employed when AC came to Bermuda, struggling to find work and make money. I got some great work out of the event – solid consulting work for a over a year. Helped me out loads and kept me busy. I’m Bermudian and I had been struggling. So the haters can keep saying what they want, but I was positively affected by the event, which I can now put on my resume.
Still working? Hope so!
Yes – thanks!
All about you! What about our brothers and sisters?
Dunkley did very well too!
HA! – that is all
came here wondering how wine would be turned into vinegar. not disappointed.
This just shows that with the PLP and its supporters you can tell as many big fat whoppers as you want and they will all believe it! I just truly hope that the PLP doesn’t ruin all the good done by this event for our future generations.
BS – who had the 5 year crystal ball at PWC?
Fire them