Volvo Stopover Boosts Auckland's Economy
May 31, 2002
Volvo Stopover Boosts Auckland’s Economy By More Than $16 Million.
The Volvo Ocean Race stopover in Auckland during January benefited the local economy by $16.5 million, according to an independent report on the event.
The economic impact assessment by Market Economics Ltd, shows that the additional economic activity generated in the Auckland region was $500,000 more than the objective Auckland City Council set when it decided to host the three and a half week event.
The report finds that without Auckland City’s commitment to invest $1.54 million over two years on managing the stopover, the Volvo Ocean Race would not have come to Auckland and the economic impact and employment generated would not have flowed through to local businesses and households.
Events and activities directly around the stopover generated most of the economic impact, the additional spending coming largely from corporate sponsors (40 %) and race syndicates (22%).
Market Economics’ report says that while its economic impact analysis was limited to the stopover itself, the total impact clearly extended far beyond the stopover events and activities in Auckland.
The report estimates that the stopover generated additional spending of at least three times the $16.5 million generated directly from the stopover itself. That spending would not have occurred if the race had not come to New Zealand, says the report.
- At least one syndicate based its operations in New Zealand, spending an estimated $10 million on boat building, sails and training.
- Another syndicate had all its sails made in New Zealand at an estimated cost of $2 million.
- Some syndicates sourced other goods and services for their entire campaigns from New Zealand.
Many staff of the various syndicates are New Zealand citizens receiving income from overseas, but paying tax and spending money in the New Zealand economy.
The report says there are many less tangible benefits from hosting the stopover including maintaining Auckland’s and New Zealand’s international profile as a major sailing region, promoting the development of the local marine sector, and utilising the investment in the American Express Viaduct Harbour area.
Councillor Scott Milne, chairperson of the council’s Recreation and Events Committee, says the value to Auckland of hosting the event was clearly proven.
He says the cost of hosting the stopover came in $35,000 under budget, primarily as a result of exceeding revenue projections by $299,000.
“The stopover was a huge success. It came in on time, to requirements and under budget, with all the council’s objectives being achieved. It reinforced Auckland’s position as a vibrant and exciting centre for events, it reinforced Auckland’s position as a premier yachting centre, and it was an enjoyable event for the crews, spectators, and all other participants.”
Councillor Milne thanked the sponsors, who got behind the stopover to the tune of $530,000.
Council originally went to the market with a range of major and minor sponsorship packages, working with individual sponsors after initial presentations to develop customised packages of specific benefit to them.
He says sponsors were generally very happy with the results of their involvement, and would certainly discuss future opportunities.
Race organiser - Volvo Event Management - has not yet announced its decision about the future of the race, however it has publicly confirmed its complete satisfaction with the Auckland stopover.
Councillor Milne says a decision about Auckland’s involvement in any future Volvo Ocean Race would only be made after full political scrutiny of proposals put forward by the race organisers, should these eventuate.
A report on the Volvo Ocean Race stopover is up for confirmation at next Tuesday’s Recreation and Events Committee meeting, and Wednesday’s Strategy and Governance Committee meeting.