Thursday, July 12, 2018
By NEIL HARTNELL
Tribune Business Editor
The economic benefits from hosting the IAAF World Relays and top sporting events are "questionable", a Cabinet minster yesterday arguing that social media is "a better bang for our buck".
Dionisio D'Aguilar, minister of tourism and aviation, told Tribune Business that the TV exposure of The Bahamas generated by such occasions was having "less and less" impact on tourists' holiday destination choices.
Reiterating that the impact from such exposure is difficult to measure, the Minister suggested the government's decision not to host the World Relays in 2019 was justified because the cost to taxpayers likely exceeded The Bahamas' return on investment.
"Obviously we cannot deny that the Relays have some effect on tourism," Mr D'Aguilar said, "and people who came to the country stayed in hotels, put heads in beds. But the difficulty of running the country is you have to make decisions and weigh the benefits against the costs.
"One the one side you have visitors coming to your country, staying in beds, eating food and taking taxis. But, on the other side, you have to come up with the $5 million to fund it. The FNM have made it a policy that they want more of these sporting events to be funded by the private sector.
"The Government has put a lot of money into these Relays so far, and the benefits are questionable. There are the bragging rights [associated with hosting], of course, but when compared to compelling needs in health and education these are tough choices."
Mr D'Aguilar suggested it would be "very difficult" to raise the funding required for the World Relays from the Bahamian private sector, especially since organisations such as the International Association of Athletics Federations (IAAF) "very tightly control who can sponsor these events" to protect their brand image.
"They don't accept all and everybody," he added. "It's quite questionable whether they would allow local numbers houses to support their organisation. It's not as easy as you think, and they have all these international agreements."
The Minnis administration's decision to withdraw from hosting the World Relays in 2019 was yesterday backed by a Tribune Business source heavily involved in staging major sporting events in the Bahamas, who suggested the $5 million figure for next year's edition was a major underestimate based on past costs.
The contact, speaking on condition of anonymity, told this newspaper that around $30 million had been spent on hosting the three World Relays events to-date. The bulk of this expenditure, some $14-$15 million or almost 50 per cent, was incurred for the inaugural edition in 2014 when upgrades to the Thomas A. Robinson stadium's track were required to satisfy the IAAF.
The two subsequent World Relays, in 2015 and 2017, were said to have cost $7.8 million and $9 million, respectively. This, the source said, compared to $9 million spent on the Commonwealth Youth Games and $8 million on the Bahamas Bowl football game over a five-year period.
They added that the returns from hosting the World Relays had failed to match the investment outlay, especially since the Bahamas had "no share" of the TV broadcasting rights and sponsorship/advertising revenues.
"I have no difficulty with the fact this administration decided to cancel the event," the source said of the IAAF World Relays. "It's for the right reasons. I think it's the best decision to be made.
"I fully support the idea of vetting and making evaluations before the Government commits funding. The Government should not be in the business of funding sporting events. It should be left to the private sector."
The source added that the Bahamas needed to treat sports tourism as a business, and be in it to make a profit, not just to look good and make an impression on the world stage.
"If you are in business, and your objective is not to make a profit, you shouldn't be in that business," they added. "The Bahamas didn't know what the objective was in having these relays. Nobody knew what the plan was to leverage it to attract more events.
"There were no measurement mechanisms in place to see if objectives were achieved. There's not a former Cabinet minister, permanent secretary, former Bahamas Association of Athletic Associations (BAAA) executive that can tell you what the benefits of these events are.
"This is all part and parcel of why you say: Is this a worthwhile effort? We had a bunch of people who like to have a party. We can't afford to be throwing expensive parties. It's a business. To build sports tourism you have to get to know what you're doing. It's a completely different creature from leisure tourism."
The former Christie administration said it hired the Deloitte & Touche accounting firm to assess the economic impact from hosting the World Relays, but the findings have never been made public.
TV viewing figures have also never been disclosed, with the source also disclosing that Bahamian taxpayers picked up the hotel bills of visiting athletes, coaches and officials, plus contributed a portion of the prize money.
Mr D'Aguilar, meanwhile, told Tribune Business that the Minnis administration's policy is to shift away from funding costly, high-end sporting events that serve to only generate TV exposure that cannot be quantified.
"Tourism is not a single event. It doesn't rely completely on a single event," he said. "It relies on multiple events. Our focus as it relates to sports is to move away from top-tier events that cost a lot of money and generate a lot of TV exposure,
"The question is: Do people buy vacations based on TV exposure? I think less and less. Yes, it does help, but it's not as important as it used to be. There are opportunity costs to this type of marketing. Are you getting a bigger bang for your buck using social media sources?
"With social media sources, it's so much easier to measure the efficiency of dollars spent. We're significantly reducing our support of these events, high-profile, costly sporting events because the benefits are questionable," Mr D'Aguilar added.
"There are some benefits, but are they worth it for the costs you are incurring? We have very limited budgets, and have to be much more strategic in how we spend our marketing dollars. The previous government spent a lot of money on top tier sporting events, and ran up large deficits. We have to much more prudent."
The Government's approach to the IAAF World Relays is consistent with the strategy previously announced by Mr D'Aguilar for the ladies' and men's professional golf tournaments hosted in the Bahamas, where it is seeking to wean them off taxpayer funding from the cash-strapped Treasury and have them stand on their own two feet with private sector support.
Mr D'Aguilar yesterday said one of the Bahamas' most successful sporting events was high school gymnastics, which attracted significant tourism business from the families accompanying visiting athletes.
Asked why the Government was still supporting the Bahamas Bowl, and not the IAAF World Relays, the Minister blamed this on a long-term contract signed by his predecessor, Obie Wilchcombe, for tying the current administration's hands.
"One of the things my predecessor did was sign me up to sporting events for multiple years," Mr D'Aguilar told Tribune Business. "We are contractually tied to that event for another two to three years. Tourism has to make the best of the hand it's been dealt."