World Cup impact ‘still massive’

22 April 2010

R93-billion gross, 695 000 annual jobs sustained, once-in-a-lifetime profiling of the country, and 370 000 foreign tourists – a smaller number, but staying longer and spending more than originally forecast. Consultancy Grant Thornton’s post-recession projections on the economic impact of the 2010 Fifa World Cup™ make for encouraging reading.

“We have revised the figures post the worldwide recession and major ticket sales phases, and some of the numbers are encouraging,” Grant Thornton Strategic Solutions principal Gillian Saunders said in a statement this week.

Staying longer, spending more

Although Grant Thornton’s projected number of World Cup visitors is 373 000, down from 483 000, it is expected that many of the visitors will stay longer and spend more.

“Indications are that overseas tourists will stay an average of 18 days compared to the 14 days used in the original projections,” said Saunders. “Average overseas tourist spend per trip is also forecast to be up, at R30 200 compared to the R22 000 used before.”

The average spend forecast is based on an analysis of current tourist spends in South Africa as well as dipstick surveys of potential visitors and expenditure by visitors to SA for other sporting events such as the 2009 British and Irish Lions rugby tour.

Foreign World Cup visitors are expected to attend an average of five soccer matches per person, up from the 3.4 matches previously expected.

This compares to an average of 2.6 matches attended by foreigners at the World Cup in Germany in 2006. Going to more matches means visitors are likely to stay in the country for a longer period and therefore, while daily spends remain similar, total trip spend increases.

“It must be understood that some 105 000 of the 373 000 visitors to South Africa over this period are expected to be non-ticket holders; 85 000 of whom would come from Africa for a short visit,” said Saunders.

“This 105 000 is down 16% on the 125 000 non-ticket holders projected previously.”

A total of 228 500 overseas ticket holders are projected, accounting for 38% of ticket sales.

Ticket sales to Africans account for only 2%, with 11 300 Africans holding tickets. Originally, African ticket holders were expected to number 48 145, a difference of -77%. Given evidence of huge interest from the continent, this indicates that there has been a failure in distribution channels and unaffordable pricing.

Economic growth impact

The gross economic impact will be R93-billion, with 62% expected to be generated pre-2010 and 38% during the course of the year. Foreign tourism will account for 16% of the gross impact.

The majority of economic spend comes from the government’s spend on infrastructure and some operational expenditure. This has increased significantly compared to original budgets, from R17.4-billion (2007) to R30.3-billion, with a further R9-billion or more spent by cities and provinces.

Net additional economic impact in 2010 is 0.54% of GDP – comprising an estimated 0.48% from net additional foreign tourism and 0.06% Fifa spending. This is significant, since GDP growth this year is estimated at 2.0 to 2.5%, of which 0.5% is accounted for by a single event.

Sustaining jobs

In terms of the World Cup impact on jobs, Grant Thornton finds the figures very encouraging.

The number of annual jobs sustained in total is 695 000. Of these, 280 000 annual jobs will be sustained in 2010 and 174 000 by the net additional economic activity in this year. This is an economic measure of equivalent annual jobs sustained by this amount of economic activity, and not new jobs created.

“We continue to be upbeat about the impact of the World Cup,” said Saunders. “The stadia will be full and it will be great event; the profiling of South Africa and future spin-offs have always been the real benefit of hosting an event of this magnitude.”

SAinfo reporter

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