World Cup visitors will stay longer and spend more

Posted Thursday, April 22, 2010 by FIFA.com

Updated projections on the economic impact of the 2010 FIFA World Cup™, released today by global audit and advisory firm Grant Thornton, indicate that there are a number of reasons for South Africans to be optimistic.

“We have revised the figures post the world-wide recession and major ticket sales phases, and some of the numbers are encouraging,” said Gillian Saunders, Principal of Grant Thornton Strategic Solutions.

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 Lions’ Tour.

Foreign World Cup visitors are expected to attend an average of five football 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. This 105,000 is down 16% on the 125,000 non-ticket holders projected previously,” said Saunders.

The Gross economic impact will be R93 billion, with 62 per cent expected to be generated pre-2010 and 38 per cent during the course of this year. Foreign tourism will account for 16 per cent of the gross impact. The majority of economic spend comes from national governments 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 spend by cities and provinces.

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

In terms of the World Cup impact on jobs, the figures are 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.”