Covid-19 risks America's Cup superyacht bonanza

The fleet of superyachts expected in Auckland for The America’s Cup regatta is at risk because covid-19 border closures prevent owners joining their boats.

The restrictions are jeopardising Cup-related revenue from superyachts once forecast to be worth as much as $436 million. 

“No boats are definitely coming for The America’s Cup at this stage,” Peter Busfield, executive director of the trade group NZ Marine, told Business Desk. While some superyachts were expected for maintenance, none was due so that its owner could enjoy The America’s Cup.

“They are not allowed to come to New Zealand for cruising,” he said. 

NZ Marine this week released revised guidance for superyachts based on its negotiations with the government and while there are exemptions for crew to bring superyachts for maintenance there’s no clear approval for owners to join yachts for the Cup or tourism. 

Duthie Lidgard, managing director of Superyacht Support, told BusinessDesk that the crew exemption was welcome but the gain from the Cup remained in jeopardy because owners couldn’t send their boats for work knowing they could then join their vessels. 

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“It hasn’t happened yet (approval for owners). I am pretty confident they will approve it but I can’t see it happening before the election,” he said, referring to the likely controversy over wealthy foreign superyacht owners being granted permission to enter the country when NZers were struggling to return. 

Lidgard said he believed some yachts had gone to Australia for refits instead of NZ. The industry was still hoping as many as 80 superyachts would still come for The America’s Cup regatta in 2021. Pre-covid, more than 120 had been hoped for. 

Owners and crew needed to know they could quarantine safely: “Mental health is an issue for crew who might have been at sea for months,” he said. “Imagine you have been in a caravan for months — admittedly a very nice caravan — for four months, you’re in confined spaces and you need to get off.” 

Tahiti has opened its borders to American tourists, providing a possible mid-Pacific haven that could eventually benefit NZ if owners were permitted to join their boats, he said. Other boats might still come from Europe in December on float-on-float-off ships which transport superyachts that don’t do trans-ocean voyages themselves. 

Senses, a 59 metre motor yacht reported by Superyachtfan.com to be owned by Google founder Larry Page but whose ownership is now unclear, was in Auckland for work earlier this month and is now on its way to Tahiti, industry sources said. 

Panuku Development Auckland, the city regeneration agency running the Silo Marina superyacht destination, confirmed the shift. 

“So far, we have eight confirmed superyacht berth cancellations for the AC36 (America's Cup) period due to restrictions,” Joanna Glasswell, media manager of Panuku told BusinessDesk. 

NZ Marine has hoped for a quarantine regime that could allow owners and their families to come, having already won permission for crew to come on maintenance voyages for superyachts as well as more prosaic commercial vessels. An early decision was vital given hurricane seasons and the complexity of trans-ocean crossings. 

Covid-related border closures had cost the industry about half its anticipated bookings, Busfield said. The remainder were in jeopardy if owners couldn’t join their craft, he said, though some would still come for maintenance, with each approved on a case by case basis. 

“It is possible that 50 percent of what we were estimating originally is salvageable, but it will drop to zero for the Cup itself and the superyacht regattas if owners and their families cannot come to watch The America’s Cup and go cruising on their superyacht,” he said. 

Superyacht revenue justified Cup investment 

Before covid-19, NZ Marine had published forecasts of as much as $436 million in revenue from the superyacht industry around the regatta time. That formed part of the justification for government investment in Cup-related infrastructure. 

A Market Economics analysis of the 2003 America’s Cup suggested superyachts accounted for 61 per cent of the total economic benefit of $528 million. 

Busfield said NZ Marine had been hoping for as many as 160 superyachts to visit for or around The America’s Cup – against perhaps 40 in a normal year to NZ – and up from the 116 that were linked to the 2003 America’s Cup in Auckland. Each visit said to be worth an average of $2.7 million. 

If that disappears it understandably hurts some of the justification for around $250 million in city and central government funding for America’s Cup and other infrastructure, but also commercial investment in new maintenance facilities for superyachts. 

Orams Marine is developing a significant expansion to its superyacht maintenance capacity on the Wynyard Quarter adjacent to Silo Marina. 

Panuku was looking for guidance from the government on a quarantine arrangement for owners that could allow superyachts to come during the event.  

“The America’s Cup was an opportunity to bring forward investment in Auckland’s superyacht service offering,” Glasswell said. “The upgraded infrastructure will bring a range of benefits to Auckland in the long term, making the city a more competitive superyacht destination as well as supporting our marine industry’s refit and repair services.” 

The Orams superyacht site doubles its existing capacity to haul out vessels, including an 840-tonne lift to move big vessels onto the hard. Orams Marine referred questions about the project to Busfield but the project was described in this 2018 report from Sail-World.com. 

Crew can come, owners not yet 

NZ Marine emphasises that the NZ government has heard the industry by agreeing in June that superyachts could visit for repairs and maintenance, provided crews go through stringent quarantine.

“We are very pleased to have that opportunity and we have identified over 30 superyachts that have got booked in for refits and servicing between now and December.”

Now NZ Marine wants to agree a regime under which owners could join their boats, perhaps with agreed testing before they come and quarantining on board: “We want to maintain the border control of covid and not compromise the health of the country….and these people are also very careful and don’t want to get the disease.” 

Like the movie industry before it, NZ Marine argues it is essential to local jobs that foreign boats and crew and their owners be permitted to enter the country.

 Busfield said one superyacht was expected shortly, which would spend between $5 million and $10 million on maintenance and had eight crew. It had taken three months to negotiate the regime under which that yacht, which he declined to name, could come in.

“We are dealing with the highest people in the land to get this across the line, otherwise the whole industry that is port-related will go bust: engineers, fabricators, shipwrights, or the multiple other tradespeople. A huge amount of the work in NZ is around that refitting and servicing of vessels whether they be ferries or superyachts or cruising yachts.”

NZ has particular expertise in big sailing yachts, with Avondale-based Southern Spars having most of the market for masts in sailing superyachts. A Southern Spars spokesman did not return a request for comment.

See BusinessDesk's coverage of the superyacht phenomenon in our new lifestyle and leisure section, The Life.