Bermuda Championship: Economic Impact Assessment
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1 | Bermuda Championship economic impact assessment Bermuda Championship: Economic impact assessment April 2020 kpmg.bm © 2020 KPMG, a group of Bermuda limited liability companies which are member firms of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Summary DIRECT MPAC $7.8m INDIRECT 2,132 8,528 MPAC $3.7m VISITORS 10,660 EDEN PECATORS INDUCED MPAC $6.9m 45+ TOTAL 120 ECONOMIC GOLFERS CHLDEN N HE UNIOR CLINIC $18.4millionIMPACT BERMUDIAN 584 PLAYERS VOLUNTEERS Daniel $2.6 million AG SPEN IN BERMUD T HOS THE EENT Dwayne $1.7 million PEMN PEN LCLL 26 PEPE arryd HE CE COORDINATORS DLLS Kenny TANGIBLE LEE VLE MED EPE $3.5m INTANGIBLE Michael VLE M MED EPE $700k © 2020 KPMG, a group of Bermuda limited liability companies which are member firms of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Contents Executive summary 4 Economic impact 5 PGA TOUR organising body and sponsors 7 Government of Bermuda 7 Golfers, media and sponsors 8 Spectators 9 Qualitative effects 13 Brand exposure 14 Media exposure 15 Customer and community engagement 16 Bermuda Climate Risk Forum 16 Legacy effects 17 Approach and Methodology 18 Glossary 19 © 2020 KPMG, a group of Bermuda limited liability companies which are member firms of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. 4 | Bermuda Championship economic impact report 1 Executive summary KPMG Advisory Limited (“KPMG”) was engaged by the Bermuda Tourism Authority (“BTA”) to estimate the economic impact of the 2019 PGA TOUR Bermuda Championship (“Championship”) on the Bermuda economy. Factors taken into consideration include: expenditure on the island by event organisers and visitors as well as capital investments necessary to prepare the island for the event. Total attendance over the four days of the championship was approximately 10,660, with 20% being overseas visitors and the remaining 80% being Bermuda residents. The event had an estimated direct economic impact of $7.8 million which generated additional $10.6 million impact on the economy through indirect and induced effect. In addition, Bermuda achieved international media exposure valued at $4.2 million. Apart from the quantitative economic impact there were a number of legacy benefits such as popularisation of golf and youth sports, involvement of hundreds of volunteers and promotion of the island as a year-round tourist destination. © 2020 KPMG, a group of Bermuda limited liability companies which are member firms of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Bermuda Championship economic impact report | 5 2 BTA'S SUMMARY RESPONSE: The 2019 Bermuda Championship was the island’s first PGA TOUR event and proved a successful inaugural launch to the Bermuda Tourism Authority’s five-year title sponsorship. The championship fulfills the role of a “pinnacle” event for our golf pillar, one of our four focus sports that aligns with the National Tourism Plan. The BTA set its sights on this Economic partnership because of the significant economic benefits the event generates for Bermuda’s economy, as well as the worldwide exposure to an impact audience that aligns strongly with our visitor targets. The 2019 championship stimulated visitor arrivals and spending, bringing players, families and fans to the island. Television coverage—amid a week of spectacular weather—also allowed TV viewers to witness the beauty of Bermuda. The fact this event is staged in non-summer months is an added bonus, fulfilling our goal to bring greater balance to the tourism calendar. Advertising and content integration during and around the event invited viewers to travel to the island to experience Bermuda first-hand $18.4 million and the Bermuda story was further told via digital, social media, public relations, and onsite branding. is estimated as the Over time, the championship promises to leave overall impact on infrastructure benefits and a sustainable legacy. Bermuda’s GDP © 2020 KPMG, a group of Bermuda limited liability companies which are member firms of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. 6 | Bermuda Championship economic impact assessment Estimated economic impact This additional on-island expenditure was analysed using the The next largest impact was from the Government of Government of Bermuda, Department of Statistics Bermuda - Bermuda. This includes spending by the Ministries of Public Tourism Satellite Account input-output model to estimate the Works, and Tourism and Transport on preparing for, and helping indirect and induced output. This output was then converted run the event – for example by providing additional buses and to calculate overall impact on GDP. transport to and from Port Royal. Expenditure also includes amounts spent by the Port Royal Golf Course to prepare the Six spending groups were identified as being responsible for site for the Championship. This combined spend amounted the majority of incremental on-island expenditure: to just over $1.7 million to prepare the site for the tournament, generating an additional $2.3 million through upstream PGA TOUR organising body and sponsors supplies procurement and induced effects as a result of extra spending power.2 Government of Bermuda Other important contributors to the economic impact are the Overseas professional golfers golfers, media and corporate sponsors, as well as Bermuda (including golfers’ contingents) Championship spectators. Overseas spectators visiting specifically for A total of 120 golfers participated in the Championship the Bermuda Championship (referred to as accompanied by 375 individuals including corporate “Foreign spectators (Sports)”) supporters, media personnel, TV production crew, caddies, and vendors, among others. In total, golfers and supporting Overseas spectators not visiting specifically crew generated $1.4 million in additional spending. The for the Bermuda Championship (referred to incremental spending contributed an additional $2 million as “Foreign spectators (Leisure)”) to the Bermudian economy through additional indirect and induced spending through the supply chain for a total, for a Local spectators and volunteers combined GDP effect of $3.4 million. The overall impact on Bermuda’s GDP as a result of hosting Championship spectators consisted of individuals from three the Championship was estimated at $18.4 million. This is the primary groups, overseas visitors who travelled to Bermuda result of additional on-island spending of $7.8 million from the specifically to watch the Bermuda Championship (“Sports” six spending groups, which then permeates into the economy, visitors), overseas visitors who happened to be in Bermuda through value-chain spending (indirect effects) of $3.7 million, during the championship (“Leisure” visitors), and local and further rounds of spending (induced effects) of $6.9 spectators. In total, the additional expenditure of these groups million. This is based on historical spending data and does not amounts to $2.1 million, which in turn generated $2.9 million in include legacy tourism effects. indirect and induced economic impacts, for a total combined GDP effect of $5 million. The biggest share of the economic impact stems from spending by the organising body, Bruno Events, who spent $2.6 million in Bermuda to host the event – resulting in an additional $3.4 million of indirect and induced spending in the 1 Bermudian economy. 1 Payments to non-Bermudian companies were excluded as these constitute direct imports. 2 Since economic impact assessments are compiled on a cash basis and not on an accrual basis, expenditure on tangible assets is not amortised but is considered in its entirety at time of payment. © 2020 KPMG, a group of Bermuda limited liability companies which are member firms of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. 7 | Bermuda Championship economic impact assessment $2.6 million spent in Bermuda to host the event $1.7 million spent to prepare the site PGA TOUR organising body and sponsors Bruno Events was responsible for the organisation of the Championship. Actual on-island expenditure totalled approximately $2.6 million, consisting of, inter alia, hospitality 120 operations, media operations, transportation, procurement of supplies (such as golf-related equipment, audio visual and I.T. Golfers equipment), and office and administrative expenses. Mapping these expenditures to broad expenditure categories in order to estimate indirect and induced effects yielded an additional $3.4 million, for a total of $6 million. 375 Caddies, crews, media, sponsors, etc. Government of Bermuda In preparing the Port Royal Golf Course, the Government of Bermuda contributed $2.9 million, comprising: operational costs, wages to staff, procurement of sand, bunker lines, $1.4 million related equipment (including shipping), and repairs and additional spending by maintenance, amongst other expenditure categories. Not golfers and supporting crew all of the Government’s expenditure contributed to