Dr Gibbons: ‘Significant Contribution Of AC35′

November 10, 2017

Former Minister Dr Grant Gibbons said that “as the OBA Government Minister with responsibility for the 2017 America’s Cup, I was pleased to read PWC’s independent assessment of the event, which clearly demonstrates the significant contribution AC35 made to Bermuda’s economy over the past three years and will continue to make well into the future.”

Yesterday the ACBDA released the PWC report, and said the cost of hosting the America’s Cup was $64.1 million, and it generated economic activity of $336.4 million, with the ACBDA saying the event came in “under budget” and the revenues “exceeded forecasts.”

Dr Gibbons said, “The teams that guided this event from the negotiating process through execution should be gratified for many reasons. AC35 not only met but significantly exceeded the many objectives we set for the project in 2014.

“Three years ago, Bermuda’s economy was suffering from a prolonged recession, a spiraling deficit, uncontrolled debt and lack of investor confidence. In December of that year, I laid out the OBA Government’s objectives for AC35 in a statement before the House of Assembly and said: “Bermuda’s hosting of the 35th America’s Cup will bring with it a substantial economic stimulus, including jobs and investment that will begin in 2015 and build to the events in 2017 and beyond.”

“PWC’s report shows that AC35’s economic impact, as measured by contribution to GDP, amounts to $336 million, including more than $90 million of ongoing legacy tourism. This outstanding performance exceeded our original projections, and represents a return of more than five times the actual Government investment.

Chart extracted from the PwC report

1-Fullscreen capture 1192017 33834 PM

“In addition, according to the PWC report, additional on-island spending resulting from AC35 amounts to $271 million, including expected legacy tourism spending. Our original October 2014 analysis projected $242 million, including expected legacy tourism spending.

“In terms of the overall economic impact of AC35, it would be fair to say that the OBA Government team from the Ministry of Economic Development and the ACBDA under-promised and over-delivered. It was also gratifying to learn that while the OBA Government’s three-year budget for AC35 was projected to cost $77 million, the PWC report indicates that the actual spending was only $64.1 million, a testament to the careful financial management of the ACBDA and Ministry.

“Another objective was set out this way: “It is expected that the America’s Cup events will help catalyze the development of new hotel and hospitality products and promote reinvestment and revitalization of existing properties.”

“The PWC report mentioned but did not quantify the catalytic effect that hosting AC35 had on stimulating new tourism infrastructure and hotel development, but with four major hotel developments now completed or underway, including the Hamilton Princess, Morgan’s Point, The Loren at Pink Beach and the St. Regis in St. George’s, the impact of AC35 on investor confidence is not in doubt.

“We were certain that AC35 would stimulate and enhance Bermuda’s tourism product, and the ACBDA and the BTA worked hand in hand to achieve this. Given the new hotel development, 27,000 overseas spectators, 452 million worldwide viewers, a 135 percent increase in superyachts berthed compared to the prior year, and over $80 million in “free” media coverage, AC35 more than met that objective. The PWC report also indicates that the exposure Bermuda received as the host country is expected to increase visitor spending over the next five years by $76 million, with a potential increase up to $229 million.

“We expected AC35 to have a positive impact on local businesses, and surveys completed by the Bermuda Economic Development Corporation indicated that nearly 30 percent of Bermudian companies had planned to take advantage of opportunities presented by AC35. The PWC report confirms that as increased spending spread throughout the community, the largest impact [38 percent] on GDP was felt in the hospitality sector, followed by the wholesale and retail sector at 14 percent and real estate at 10 percent. Hundreds of jobs were created, and Bermudians filled them.

“We noted in 2014 that AC35 would provide significant opportunities for Bermuda’s young people, and we were on target. With the enthusiastic leadership of Sir Russell Coutts, the Endeavour programme, which provided sailing instruction at no cost to students aged nine to twelve, engaged over 1,500 of Bermuda’s children. The programme has received financial support from the community for at least two more years. Along with the Red Bull Youth Team, the Endeavour programme will sustain AC35’s legacy impact on a sport that has played a key role in Bermuda’s maritime history.

“Three years ago, I called AC35 a “transformative moment in our island’s history” and said that the benefits to Bermuda’s reputation and sense of national pride could not be overstated. In fact, the PWC report stresses that the “delivery model” used for AC35 could and should be used in the future because it demonstrated Bermuda’s ability to deliver a large-scale event to world-class standards.

“What were the key elements of that “delivery model”? Simply put, cooperation of the public and private sectors, enthusiastic volunteers [over 1,000 of them], careful coordination by many government departments and service organizations, and superb management. In short, teamwork was essential, and it will continue to be essential into the future if Bermuda is to capitalize on the legacy of AC35.

“Together with the America’s Cup Event Authority, we delivered an extremely successful event without excessive negativity, but I would be less than honest if I failed to say that there were many in our community who did not support AC35 wholeheartedly. Some have suggested that this represented a failure to adequately communicate its benefits, and there may be some truth in that. But I would also suggest that some critical and inaccurate commentary on social media about AC35 was politically inspired, and this is unfortunate.

“It is worth speculating what would have happened had Government not made an investment in the America’s Cup. Without AC35’s boost in economic activity and tourism infrastructure, it is likely that Bermuda’s economy would have continued to struggle, requiring further public and private sector downsizing and even less spending on social services like education, healthcare and seniors.  The alternative was larger deficits, more debt and higher taxes – not an attractive option — but that’s exactly where Bermuda was headed in 2012.

Infographic provided by the ACBDA [PDF here]

AC InfoGraphic Bermuda Nov 2017

“The legacy opportunities of AC35 abound. AC35 accelerated the construction of Cross Island for use as the AC Event Village and stimulated the restoration of numerous historic buildings in the Royal Naval Dockyard.  These structures are now available for future economic deployment by WEDCO and the Government, although PWC’s report correctly excluded the economic impact of constructing these facilities in their analysis.

“Additional legacy opportunities include the decision by the International Triathlon Association to designate Bermuda as the host for the World Series Triathlon events in 2018, 2019 and 2020 and possibly the finals in 2021; greater investor confidence in Bermuda; and a rejuvenated tourism product.

“Any efforts by the new PLP Government to dismiss the effective management of AC35 and its benefits will be counterproductive in the long run by negatively influencing Government’s ability to bid successfully for other international events and, indeed, to encourage inward investment in Bermuda.

“Three years ago I said, “We will need all hands on deck to realize the full potential of this extraordinary event and to meet the high expectations and standards of excellence set by the America’s Cup Event Authority. From this moment on, every Bermudian will be part of the team that takes full advantage of the incredible opportunity before us. It will require a great effort, but the rewards will be significant.” With this positive PWC report, let’s recognize that we all want Bermuda to be successful and for all Bermudians to reap the benefits.”

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Comments (23)

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  1. Bermmanymanymanymen says:

    Maybe if they had been faster releasing this info they wouldn’t of had such an overwhelming loss in the elections….either way, the facts remain….this event was positive for Bermuda….from the rich to the working class….meaning from the hotel owners to the taxi drivers and pot washers

    • Onion says:

      The facts were always there. The PLP just lied and the OBA was silent so people believed the lies and voted.

      • 2ways says:

        Hit the nail on the head.

      • wildcat says:

        The OBA should have called the election after the results were released. Now we are stuck with a PLP government who cares more about social programs than reducing our large national debt.

        • PBanks says:

          The no-confidence motion would have likely forced an election in any event.

    • Onion Juice says:

      So these figures are formed on an “expecting turn around” in 5 years like its a gamble, well thats good news who has the crystal ball.
      Another entity to add to my casino problems.

  2. Joe Bloggs says:

    Good news for a change! I like it!

  3. Ronnie V says:

    Great outcome of a great event! Congrats to everyone at ACBDA for doing such an excellent job! My guess is that we will not here anything from the PLP Govt on the event other then perhaps a minor comment in the House. The report proves that their negativity towards the event (save and except for Marc Bean’s initial expression of support) was only useful to the Party’s political ambitions and not in the interest of the island as a whole.

  4. Politricks says:

    Just imagine how much more successful it would have been if the PLP and their surrogates didn’t consistently talk trash about the AC and instructed their supporters to boycott the event. Once again putting Party politics before country.

  5. JohnBoy says:

    The PLP’s silence is deafening.

  6. somuchless says:

    The PLP are silent. Bahumbug

    • wahoo says:

      Did PWC ever do a report on the Beyonce, the faith based tourism, the global who, the port royal, the grand atlantic, the entire period between 1998 and 2013?

  7. me says:

    And some says. . . “Mickey Mousse Event”

  8. Micky Mouse says:

    Not bad return for a Micky Mouse event ! Should be interesting to see what type of return we get from the new Development Minister . Faith based tourism , Beyoncé, sending the Gombeys to Washington and Bollywood from the platinum period have their work cut out to top this !

    • The real Terry says:

      If this was Mickey Mouse where does it leave you guys and the Black Mayors conference at Elbow Beach

  9. Stevie says:

    Sorry you stupid PLP people. The Americas Cup did Bermuda a big help. Well done OBA.
    You stupid PLP people have no idea how many people around the world want to come here.

  10. Hmmmm says:

    What is very sad is that many people missed it based on the PLP misinformation. Bermudians put on an amazing event, it was something we may never see the scale of again. It made me very proud to be Bermudian.

  11. Honest Leadership says:

    Bring back the PGA Grand Slam of Golf lmao

    Well done OBA you guys are the Real MVP’s

  12. Triangle Drifter says:

    As one of the initial sceptics when AC was first announced I put that aside & got involved. I don’t think that I was alone in that early doubting of being able to do it.

    Just imagine what it could have been had the PLP rallied their followers

  13. This is the same person who topped the polls for being the BEST ED.MINISTER in recent years….. nonsense. The person deserted the public schools in search of “glitter” in overseeing AC.
    The average Born Bermudian sees this person as the worst.

    • The real Terry says:

      Have some backbone as usual I think you are way off base, the average Born Bermudian, which includes Dr. Gibbons, sees you as the worst. Dr. Gibbons and his family are probably more “average born Bermudian” than you are.

  14. It a good day says:

    Well I must be way down the totem pole cause I haven’t felt the trickle down effect yet….so it did not work for me. Rich get richer and the poor get poorer.