Property Institute of New Zealand Chief Executive Ashley Church has urged caution around expectations of an ‘economic bonanza’ fuelled by the hosting of the next Americas Cup regatta which is expected to take place in 2021.
Mr Church says that he absolutely supports Government and Council investment in the next Americas Cup Challenge – but says that expectations of short term economic gain are already being hyped to unrealistic proportions that are almost certain to end with disappointment.
Mr Church, who was the CEO of the Newmarket Business Association during the staging of the 2011 Rugby World Cup, says that event provided some valuable lessons around what to expect from an international event.
“Around 133,000 people visited New Zealand to follow the Rugby World Cup and spent, between them, $387 million while they were here – yet there was almost no economic impact on activity in the hospitality and accommodation sectors outside the main CBD in Auckland”.
Mr Church says that this was probably due to something called ‘displacement’ where New Zealanders and international visitors who are not interested in an event will ‘defer’ their travel plans so as not to be caught up in activities associated with that event. This means that revenue and activity associated with the event ‘replaces’ activity which would otherwise have taken place, rather than adding to it.
However, Mr Church says that an immediate economic spinoff should not be the only reason that Government and Council should consider investing in the Americas Cup. He says that there are three compelling reasons in favour of Government and Council support – and that all of these provided for a longer term payoff from the event.
“In the same way that the last Americas Cup, in Auckland, led to the development of the stunning Auckland Viaduct - hosting the event in 2021 will provide a major impetus to the development of new infrastructure on Auckland’s waterfront. Like the viaduct – this will last for generations”.
“The event will also provide an opportunity to showcase the innovation, creativity and business nous of kiwis – particularly in the tech sector. The demographic of people interested in the Americas Cup includes high nett wealth individuals and the cup provides leverage to gain access to them”.
However, Mr Church says that the main rationale for investing in the Cup is because of the way that it effects us as a country.
“Most importantly – we should invest in the Americas Cup because of the way it makes us feel about ourselves as a country. A nation that aspires to growth and success needs to invest in things that help us to see our potential and challenges us to do even better (across a wide range of endeavours). This is easily the greatest legacy of the Cup win and will stay with us for years."
This article was sourced from Scoop Business.