America’s Cup: Racing is just the tip of the economic iceberg for Auckland


It is easy to view sailing’s America’s Cup as simply a playground for wealthy people’s racing yachts, but in New Zealand the economic value of what lies behind the event is significant in less obvious ways, writes Todd Niall.

For most, the America’s Cup is a bunch of often-dramatic boat races in which New Zealand has a fair crack at beating the best in the world.

Sir Stephen Tindall though, sees an ecosystem of high-tech businesses in which the sport’s longest-standing competitor, Team New Zealand, sits at the centre.

“If you took away the fact that this is a sailing team, you’d have to say this is an incredibly high-performing, high-tech business,” said Tindall, who in his other life as an investor, backs more than 150 local firms.

READ MORE:
* America’s Cup: Four days of racing was the boost Auckland needed
* America’s Cup power rankings: Team New Zealand fly to the top
* Auckland’s summer events line-up: What to do in the City of Sails over the break

“It includes a lot of Artificial Intelligence, machine learning, mechatronics and a high amount of research around aerodynamics and fluid dynamics.”

Tindall knows his Cup stuff, having financially backed Team New Zealand for its 1995 win in San Diego, and again in each campaign from 2003, becoming board chair for the successful 2017 Bermuda campaign.

The America’s Cup, uniquely in New Zealand, has two very different personas.

One is simply the sporting magic which from the first New Zealand Challenge in Fremantle in 1986, has gripped fans from Kaitaia to Bluff, through 35 years of triumph and heartbreak.

Crowds and fans converge around the Viaduct basin for the 2nd day of the Americas Cup World Series Auckland.

JASON DORDAY/Stuff

Crowds and fans converge around the Viaduct basin for the 2nd day of the Americas Cup World Series Auckland.

Sir Stephen Tindall chairs the board of Emirates Team New Zealand, and now owns the 2000 cup-winning boat NZL60.

Chris McKeen/Stuff

Sir Stephen Tindall chairs the board of Emirates Team New Zealand, and now owns the 2000 cup-winning boat NZL60.

Thousands watch Dunedin's 2017 America's Cup parade, following Team NZ’s victory in Bermuda.

Hamish McNeilly/Stuff

Thousands watch Dunedin’s 2017 America’s Cup parade, following Team NZ’s victory in Bermuda.

The other is its direct connection to important contributors to the national economy, international tourism, the marine industry, and the way it attracts wealthy investors for locals to woo.

While Covid-19 has wiped out much of the economic benefit forecast in 2017 for the government, consultants estimated Team New Zealand would spend $80-120 million locally in the 2021 campaign.

The three challengers number half the minimum foreseen in the 2017 forecast, but even halving the lowest level of spend forecast, suggests $30 million spent locally by those teams.

Tindall’s personal investment vehicle K1W1 has money in 150 local, mostly high-tech or environmentally focussed start-ups, including Rocket Lab – one of the world’s most prolific space rocket builders.

Rocket Lab’s Mt Wellington facility has swapped some skilled staff with Team New Zealand.

Jason Dorday/Stuff

Rocket Lab’s Mt Wellington facility has swapped some skilled staff with Team New Zealand.

“There are similarities in terms of materials. We both use carbon fibre. We use it for boats, they use it for rockets, and there’s telemetry and electronics,” said Tindall.

“There has been quite a bit of crossover in personnel between both organisations – they’ve got some of ours, we’ve got some of theirs. They needed guys to be able to build the fuselages of those rockets, and we had the experts to do it.”

Team New Zealand pioneered the use of foils for the giant AC72 catamaran in San Francisco, and Tindall said that leap has spread into other New Zealand marine players.

Team New Zealand pioneered foiling on the AC72 catamaran but got pipped by Oracle Team USA in 2013.

Chris Cameron/Supplied

Team New Zealand pioneered foiling on the AC72 catamaran but got pipped by Oracle Team USA in 2013.

Freight Fish is developing a foiling container freight vessel.

Freight Fish/Supplied

Freight Fish is developing a foiling container freight vessel.

Tindall invested in a company called Freight Fish, that started off with diesel-engined craft that would move two 40 foot containers on a foiling vessel. Then they pivoted to an electric ferry, and now believe they can produce a ferry that will cross Cook Strait, “probably seven times a day, with maybe 15 vehicles and 30 people, and be foiling.”

The level of sophistication in Team New Zealand’s 30-odd-strong design department has also made waves internationally, according to Tindall, with the volume of high-speed data it is using.

“We broke a global record for the amount of data going back and forth in our Artificial Intelligence operations with the (boat) simulations,” he said.

In more than 15 years as a financial supporter and more lately director of Team New Zealand, Tindall can reel off successful firms formed by staff who worked in the team’s high-tech environment.

The giant “reflector” feature on the top of the ASB headquarters in the Viaduct harbour is partly the work of global consultancy Pure Design and Engineering, co-founded by former Team New Zealand designer Andy Kensington.

Tindall says New Zealand America’s Cup technology has flowed out into the world for decades, starting with the “plastic” hulled yachts of Fremantle, carbon fibre technology, foiling, and now sail design.

“We have got sails with two skins, like an aeroplane wing, that create more power, you are going to see that drive sails around the world,” he said.

A public version of Team NZ's high-tech boat simulator at the Cup Village.

Spark/Supplied

A public version of Team NZ’s high-tech boat simulator at the Cup Village.

Team New Zealand's new AC75 Te Rehutai looking sharp during official America's Cup training.

Chris McKeen/Stuff

Team New Zealand’s new AC75 Te Rehutai looking sharp during official America’s Cup training.

“In the marine industry alone, the expertise that’s come out of Team New Zealand will help that industry dramatically.”

All of that, and the team’s 150 staff, have been paid from budgets significantly, filled with cash from long-standing overseas sponsors like the Dubai-based airline Emirates, or Japanese car marker Toyota.

Team New Zealand’s role as a technology leader for the marine industry has helped multi-national mast and carbon fibre specialist Southern Spars fill orders for its West Auckland factory.

Three teams have had their $600,000 masts built in Avondale, the plant which built Team New Zealand’s cup-winning Bermuda catamaran.

Southern Spars co-founder Mark Hauser said the America’s Cup had boosted staff morale, and their financial position. They had enjoyed steady business supplying additional gear as teams continued to upgrade their boats in the lead up to the races. He expects this good trend to continue over the next three months.

Many of the America’s Cup teams have been inviting Southern Spars staff on VIP boat rides. Hauser said this has been a great opportunity for staff to see their product in action. Being out on the water on the high tech boats helped staff learn and develop their product.

In terms of local business, Hauser said the boat servicing part of their business is doing well as people who would usually go away for Christmas are now staying local and spending more on boat maintenance, especially with the America’s Cup bringing more people out onto the water.

Team New Zealand's winning AC50 catamaran in Bermuda in 2017.

Richard Hodder/Emirates Team New Zealand/Supplied

Team New Zealand’s winning AC50 catamaran in Bermuda in 2017.

Stepping back from the design and technological component of the defender’s campaign, the challenger’s regatta in January and February, and the Cup Match itself in March, have taken on a new economic role.

The rosy economic impact of anywhere between $555 million and almost $1 billion, is now an historic wish.

Only three, not six to eight challengers, stepped up to tackle the radical new AC75 foiling monohull promoted by Team New Zealand

Then in 2020, the Covid-19 pandemic closed the borders to all – in the America’s Cup – other than essential crew and staff.

International Cup tourism spending had been put at nearly $61 million, and sponsors including big foreign brands, a further $28 million.

In the pared-back Covid-19, the economic role played America’s Cup for New Zealand will be different.

“I think it could be even more important than it was,” said Stuart Nash, who is both minister for tourism, and for economic development – the portfolio that pumped in $40 million to support event costs.

“In previous cups, when the borders were open, we had a lot of people come down and watch it,” he said.

Restrictions on arrivals due to Covid-19 has eliminated America’s Cup-related foreign tourism.

DAVID WHITE/STUFF

Restrictions on arrivals due to Covid-19 has eliminated America’s Cup-related foreign tourism.

Team NZ COO Kevin Shoebridge (2nd left), team chairman Sir Stephen Tindall, Auckland Mayor Phil Goff and Economic Development Minister Stuart Nash (3rd right) at the opening of the America’s Cup village in Auckland.

Abigail Dougherty/Stuff

Team NZ COO Kevin Shoebridge (2nd left), team chairman Sir Stephen Tindall, Auckland Mayor Phil Goff and Economic Development Minister Stuart Nash (3rd right) at the opening of the America’s Cup village in Auckland.

“They will watch it on TV with family and friends, and talk about it in circles of people who wouldn’t normally come down here – you’ll get a very engaged group of individuals in their home countries watching this,” said Nash.

The absence of foreign visitors will hurt the cash being banked by businesses, but the local value of the America’s Cup is now being seen in a new light, after a 2020 dominated by Covid-19 lockdowns.

“People want to be entertained, and they want to enjoy big experiences,” said Nick Hill, the chief executive of Auckland Council’s recently-merged economic and culture agency, Auckland Unlimited.

“When we came out of lockdown, we had 42,000 people at Eden Park for Super rugby, and the Town Hall sold out for (pianist) Michael Houston,” said Hill.

Hundreds watched America's Cup racing in the cup village in Auckland.

Todd Niall/Stuff

Hundreds watched America’s Cup racing in the cup village in Auckland.

The America’s Cup world series regatta in late December showed the pulling power of the event on Auckland’s downtown waterfront.

Around 65,000 people passed through the Cup “village” over four days, peaking with 21,000 on the Saturday.

“It will be special, it will be intense, and I think you will find Aucklanders and the rest of the country engage,” said Hill.

“The energy, and intrigue and technology is unbelievable. The personalities – you’ve got billionaires behind each of these challengers pulling out all the stops to win, and you can go and watch it in the middle of the harbour.”

Bar owner Tricky Hartley says after a financial year impacted by Covid the America’s Cup would give a welcome boost to business.

RICKY WILSON

Bar owner Tricky Hartley says after a financial year impacted by Covid the America’s Cup would give a welcome boost to business.

Wynyard Quarter’s The Conservatory bar and eatery was busy on the days of the December test races of the America’s Cup. Owner Tricky Hartley said combined with Christmas it was hard to quantify how much the races contributed to drawing in customers. Having purchased new TVs and extra furniture before the Christmas races, he says they are well prepared for Prada’s cup next week.

Hartley says there was a good mix of supporters.

“The fantastic thing about it, it was a blend of every supporter from the Kiwis, we had some Italians in, we’ve got the English in… We want everyone in here because it creates a lot better atmosphere.”

He expects the Prada Cup to be a better indication of how things will go, business wise, in the March finals but expected the America’s Cup and a good would be a major “to help us to get through the rest of the year”. He said it was great to see New Zealanders coming up from the South Island and other parts of North Island for the Christmas races, and is hoping they would come again for the Prada Cup.

Team NZ passes a spectator boat during Day 3 of the America's Cup World Series in Auckland.

Ricky Wilson/Stuff

Team NZ passes a spectator boat during Day 3 of the America’s Cup World Series in Auckland.

The television pictures of racing with an Auckland city backdrop are viewed as valuable promotion to a global audience, even if no-one can jump on a plane to visit.

“For the brand and recognition globally for the city, that will be even more important because of the lack of international sporting contests,” said Hill.

The hoped-for investment in future travel decision-making will not help Auckland hotels which traditionally make their hay while the summer sun shines.

Five new hotels opened in late 2020 ahead of what would have been a year of mega events in Auckland from the America’s Cup through to APEC in November.

The Park Hyatt hotel opened in 2020 next to the America’s Cup village.

Brook Sabin/Stuff

The Park Hyatt hotel opened in 2020 next to the America’s Cup village.

“If it was a normal time, November to the end of March is peak season,” said Dean Humphries, the national director for hotels, at property consultants Colliers.

Yet in late December, rooms available in top hotels on the opening weekend of the Prada Cup for challengers in mid-January included an executive apartment on the waterfront for $220 a night, or in the swanky Sofitel for $273.

“Everyone is a little gun-shy to plan ahead. What we are seeing is a short lead-in time to book. It’s weeks-out, not months ahead,” he said.

Humphries said some operators have been helped out with contracts to provide Managed Isolation and Quarantine (MIQ) rooms for incoming travellers.

More than a third of Auckland hotel rooms are now in Covid-19 isolation facilities.

RICKY WILSON/STUFF

More than a third of Auckland hotel rooms are now in Covid-19 isolation facilities.

MIQ now accounts for between 30 and 40 per cent of Auckland’s 10,000 hotel rooms.

“Most or all contracts rolled over to March-April. It will be an interesting exercise to look back in March and see how everything has panned out,” said Humphries.

“Auckland has still got capacity but operators are confident they will get uptake, when the Cup gets closer – quietly confident,” he said.

The biggest direct economic boost due to come from the America’s Cup has been significantly lost however, with Covid-19 and the border closures turning away more than 100 superyachts, and hundreds of smaller cruising yachts.

Superyacht The Dancing Hare berthed in Auckland's Westhaven Marina.

LAWRENCE SMITH/Stuff

Superyacht The Dancing Hare berthed in Auckland’s Westhaven Marina.

”We had a goal of 160 superyachts and had met that (with bookings) but during June to November we saw 110 boats turn around in the Pacific and head back to Europe or the USA,” said Peter Busfield, the executive director of the Marine Industry Association.

Visits by super yachts and luxury overseas boats were originally estimated to be worth about $180 million, nearly half of the extra spend expected in Auckland for the Cup defence.

The other loss has been the bulk of the refit and maintenance work on hundreds of 10-20 metre cruising yachts that would pass through.

Busfield said about 15 super yachts had arrived under Covid-19 criteria that allow arrivals if more than $50,000 worth of engineering work is booked.

Team New Zealand boat builders are part of a wider industry expecting a major boost from servicing superyachts in 2021.

Hamish Hooper/Supplied

Team New Zealand boat builders are part of a wider industry expecting a major boost from servicing superyachts in 2021.

”That has actually saved that sector of the industry, because many specialise in servicing the super yacht market, and given them some work to do,” said Busfield.

As many as 200 visiting boats which arrived the previous year have had their permits to stay in New Zealand waters extended.

”Many that would have left have had work done, so that has also balanced the scales,” he said.

The fall-off in boat visits has also hurt marina bookings for Auckland Council’s property operator Panuku Development, which had expanded berth numbers around the Viaduct Marina.

Superyacht bookings for Auckland’s Westhaven marina suffered due to Covid-19 restrictions.

JACKSON THOMAS/STUFF

Superyacht bookings for Auckland’s Westhaven marina suffered due to Covid-19 restrictions.

Panuku expected to take a $3.2 million hit from 22 berth cancellations, and from both cutting rates for locals boaties and offering the return of non-refundable bonds.

Berth rates have been wound back to normal summer levels, and there are 71 confirmed bookings for 77 available berths. Two thirds of them are local boaties.

Back at Team New Zealand’s Viaduct Harbour base Sir Stephen Tindall can look out at NZL60, the boat which won the first Cup defence in Auckland in 2000.

Victory celebration in Auckland after Team NZ's 2000 America's Cup win

Carlo Borlenghi/Supplied

Victory celebration in Auckland after Team NZ’s 2000 America’s Cup win

Tindall owns the boat, in return for early backing of the team, and had it restored to join the team’s other cup-winning boats at the waterfront.

NZL60’s technology is old-school now, but is part of how the America’s Cup has boosted local industry.

“You create an ecosystem, and Team New Zealand is at the leading edge of what it does” he said.

“People will go out and spin-off new businesses, or they will go and work for other employers, and bring their expertise to that table.”

Abigail Dougherty/Stuff

Stuff journalist Todd Niall walks us through the newly opened America’s Cup village in Auckland.



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>