Economics / International Business

A Liquid Asset: The Economics of Sailing

Sailing brings with it a perception of wealth. There are even studies that indicate that listing it as a hobby on your resume can increase your chances of getting hired at an elite law, finance, or tech firm (1). However, it can also have an economic impact on a regional or national scale. This impact is most evident in the America’s Cup, which is sailing’s biggest international competition. Hosting this event drives economic growth and it is a great way to show off your city or country. The America’s cup is especially impactful when compared with other international sporting events, due to the wealth of the fans that attend this event. This includes people like Larry Ellison, the world’s 7th richest man, and the manager of the reigning champions, Oracle Team USA.

2013 America’s Cup (Sponsored by Louis Vuitton) in San Francisco

In 2003, Auckland, New Zealand hosted the event, which generated an economic benefit of $346 million for the city. It also spurred the rebirth of the city’s Viaduct harbor area, which now boasts many restaurants, bars, and hotels that attract hundreds of thousands of visitors per year (2). In 2007 and 2010, Valencia, Spain hosted the event, which produced a combined revenue of $1.1 billion for the city. Additionally it led to the transformation of an old port into a 700-berth marina, capable of holding the event’s boats, with new bars and restaurants popping up around it (2). In 2013, San Francisco’s cup generated an estimated $550 million in economic activity, from drawing in over 700,000 spectators to San Francisco to the creation of 3,800 jobs and the development of a new cruise ship dock, according to the Bay Area Council Economic Institute (2).

This year’s America’s cup is being hosted by Bermuda. There is hope among Bermudians that hosting the America’s cup will be spur their economy to sustainably reverse their five-year recession, after declining an average of 3% GDP per year from 2009 to 2014. Since the announcement in December 2014 that Bermuda would host the 2017 America’s Cup, the economy’s GDP grew 1.5% during 2015 and is expecting continued economic growth (3). Bermuda Premier Michael Dunkley has hailed the event, calling it “the catalyst needed to propel Bermuda into a prosperous future… There is work to be done and jobs to be had. There will be opportunities for Bermudians in every level of our workforce… and we see all Bermudians benefiting from the America’s Cup.” The economic benefits from hosting the event are estimated to be about $250 million. This figure includes the benefits of the teams moving to Bermuda, increased tourism, and more media coverage (2). Additionally, the travel guide Lonely Planet placed Bermuda in its top ten countries to visit in 2017 (4). Finally, the event is expected to create $77 million dollars worth of infrastructure and new facilities. (2). Therefore, the America’s cup has shown to be an engine of economic growth for the host cities.

These economic benefits provide a compelling argument for bringing a sailing center here to Pittsburgh’s three rivers. A recreational sailing center could provide employment opportunities, a source of tax revenue, and a venue to host a continuous flow of sailing events and visitors. This, in turn, would expose the city to wealthy investors, sponsors, and spectators. Who knows, maybe Pittsburgh could even host the America’s cup before it hosts a Super Bowl?

Sources:

(1) Loosvelt, Derek. “Do Expensive and Exclusive ‘Interests’ Help or Hurt Your Resume?”Vault. Vault, 19 Oct. 2016. Web. 22 Mar. 2017.

http://www.vault.com/blog/job-search/do-highbrow-interests-like-sailing-and-classical-music-on-your-resume-help-or-hurt-your-chances-of-getting-hired/

(2) Rossingh, Danielle. “Can Bermuda Ride America’s Cup Wave?” CNN. Cable News Network, 26 Oct. 2016. Web. 22 Mar. 2017.

http://edition.cnn.com/2016/10/26/sport/americas-cup-bermuda-economy-sailing/

(3) Denwiddie, Devray. “Bermuda Economic Statistics.” Gov.bm. Government of Bermuda, 02 Mar. 2016. Web. 22 Mar. 2017.

https://www.gov.bm/bermuda-economic-statistics

(4) Lonely Planet. “Best in Travel 2017: Top Countries.” Lonely Planet. Lonely Planet, c2016. Web. 22 Mar. 2017.

https://www.lonelyplanet.com/best-in-travel/countries

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