America's Cup: What will happen to industries that surround the Cup if it leaves NZ?

Emirates Team New Zealand’s America's Cup in Auckland this year helped make up for a much smaller return on investment than expected.
COR 36 | Studio Borlenghi
Emirates Team New Zealand’s America's Cup in Auckland this year helped make up for a much smaller return on investment than expected.

Industries which benefit from the America's Cup say it would be a "kick in the guts" if New Zealand loses its hosting rights.

The Government said on Wednesday that its offer of $100 million support had lapsed, raising the prospect that the Cup might not be hosted by New Zealand in 2025, even though Team New Zealand had won this year’s race.

Richard Sigley​, of Nourish Group which owns four restaurants on the Auckland waterfront, said Cup events were "hugely profitable" for his businesses and it would be hard to lose it.

“It's tough for us at the moment and that would have been a nice little impetus into the economy and the Viaduct, so it's a bit of a kick in the guts."

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However, road closures at the Viaduct and an industry-wide shortage of hospitality staff made it hard to imagine dealing with an influx of customers at the moment, he said.

Brett Sweetman of the luxury hotel Park Hyatt says the Cup brings wealth to the city.
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Brett Sweetman of the luxury hotel Park Hyatt says the Cup brings wealth to the city.

Restaurant Association chief executive Marisa Bidois​, said anecdotally the America's Cup had had a limited impact on hospitality in the wider Auckland area.

But those close to the Cup had enjoyed good business, and it had had a considerable feel-good effect.

“It’s important to remember that this event bought people back into the city at a time when Auckland city centre was really struggling from reduced footfall due to the pandemic,” Bidois said.

Richard Sigley of Nourish Group, says the possibility of losing the Cup comes “at a time when hospitality really needs it”.
Michael Bradley/Stuff
Richard Sigley of Nourish Group, says the possibility of losing the Cup comes “at a time when hospitality really needs it”.

Hotels along Auckland’s waterfront were also concerned. Brett​ Sweetman, general manager of the five-star Park Hyatt, which opened last September, said the Cup brought a lot of wealth into the city, the kind of client the Hyatt attracted.

This year’s Cup had been just a taster. “We saw how successful our property was with the domestic market so I can’t even imagine how big it would if we had those international people travelling once again.”

Boat designer Michael Eaglen​ said although the Cup had been a much smaller event than expected this year, it had still been a great advertisement for New Zealand.

“All of those images of our harbour full of boats, people supporting the teams, is really powerful for our global marine industry brand.”

Not hosting the Cup would be hard for the marine industry on several levels, he added.

While the super yacht industry was not what it once was, "we have a well respected super yacht refit and repair industry and so that was very severely hit by Covid”.

There was also a healthy sideline in making crew and chase boats for the last event.

But the Cup's biggest benefit was possibly the way it promoted New Zealand's innovation, such as cutting-edge electric or hydrogen boats.

Michael Eaglen, who now makes electric ferries, says Team NZ has to go where it can make the Cup financially work.
Todd Niall/Stuff
Michael Eaglen, who now makes electric ferries, says Team NZ has to go where it can make the Cup financially work.

“Where we are now is right on the cusp of an incredible change across the whole maritime industry globally and there's a race on.

"It's a race in perception and a race in technology. New Zealand does pretty well on the technology race side, but it's very hard to cast a long shadow and be seen as a big player in the world.

“It's the kind of opportunity that's really hard to quantify now, but which would genuinely come if we were to host it here.”

Professor Juergen Gnoth says Kiwi industries have been half-hearted in the past about extracting value from the Cup.
Stuff
Professor Juergen Gnoth says Kiwi industries have been half-hearted in the past about extracting value from the Cup.

However, Eaglen, who helped design Team NZ’s boat in 2003, said he understood why Team New Zealand might go offshore.

“I don't think there's any question they would love to hold it here.

“[But] it's an expensive game. They need to retain their best people and my word, they've got some good ones and they need to put up a defence to win it again.

“They've got to put on an event which provides the profile to their sponsors and everyone else's sponsors.”

Some commentators have argued Team NZ should stay to help the country recoup its investment in this year's event.

America's Cup fans soaked up Team New Zealand's triumph at the 36th America's Cup in Auckland.
Supplied
America's Cup fans soaked up Team New Zealand's triumph at the 36th America's Cup in Auckland.

But Otago University marketing professor Juergen​ Gnoth​ said his research indicated local industries, particularly tourism, had not leveraged the Cup as much as they could have.

Gnoth said he had followed the economic impact of the Cup to New Zealand since the 90s, and the local industries which benefited had failed to play their part.

Much of the infrastructure could be reused, but he said hundreds of businesses he had spoken from past Cup campaigns had treated the event “as a big handout”.

“There was nothing. It was totally blank when it came to creating, let's say, a neighbourhood atmosphere, invite people, have schedules for activities [so that people]would hang around ... and draw people out into the provinces.”

Figure-wise, the economic impact of previous America's Cup campaigns in 1999 and 2003 was $495m and $528 million, an increase of less than 10 per cent between the two events, Gnoth said.

He had also compared how much America's Cup events lifted economic growth in New Zealand and Valencia, which hosted the Cup in 2007.

Although Valencia had a different economy, it added 2.7 per cent to its gross national product, compared to less than 1 per cent to New Zealand's GDP.

“It is a productivity issue,” Gnoth said.