The FIFA World Cup is one of the largest sporting events, attracting a huge number of tourists and requiring significant financial investment. The tournament organization affects many areas: the hotel business, transport, construction, services, and trade. The impact of the championship on the host country’s economy can be both positive and controversial, depending on the level of preparation, planning, and subsequent use of infrastructure. Let’s consider what changes occur in the economy and tourism before and during the tournament.
Growth of the Flow of Tourists: How Does It Impact the Host Country?
Each World Cup usually attracts a huge number of foreign tourists, as was the case in Brazil in 2014 – 1 million and Russia in 2018 – 3 million guests. A significant increase in tourism has a strong impact on the economy due to the increase in revenue not only from the hospitality industry but also from the service sector, transport, and even retail. At the same time, it creates serious problems for the infrastructure of the cities chosen as hosts. Without careful preparation, there may be a shortage of accommodation, overcrowding of public transport, and increased strain on water and electricity systems. Some shipowners resort to converting their ships into hotels that can easily accommodate hundreds of people. During peak hours, it becomes extremely difficult to book plane, train, and bus tickets, leading to temporary paralysis of the transport system.
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The Impact of the World Cup on Construction Works and Infrastructures
World Cup hosting centers require investment in infrastructure before the games. Stadiums are under construction, new airports are built, train stations are refurbished, and new roads are laid out. In South Africa, about 3.6 billion dollars were spent to enhance infrastructure in 2010, and that expenditure crossed a whopping 10 billion dollars in Russia in 2018. These cities also sustain considerable investments in sports tourism, which is projected to grow exponentially. Infrastructure spending on transport hubs is particularly high, especially since it is a requirement that the city centers must be commercially accessible.
Apart from sporting sites, a great amount of money is also allocated to:
- New metro and rail stations
- New hotel complexes
- Improved security and surveillance systems
- Fan zones and designated parking spaces
- Modernized power and water supply systems
However, not all of the built infrastructure is used after the end of the tournament. In some countries, stadiums become unprofitable due to the lack of regular spectators, and investments in high-speed rail routes do not justify themselves due to low enger traffic. Some cities are forced to remove the new structures entirely because of the high maintenance costs.
Who Earns More in Hotels, Restaurants, or Transport Services?
The World Cup typically increases the number of bookings people make, leading to a hike in accommodation fees. Brazilian prices saw a hike of over 500 percent during the 2014 World Cup in certain regions. Owners of rental houses have also benefitted during this time, renting their apartments for brief periods to international tourists.
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Aside from the accommodation sector, catering and transport also experience substantial increases in their profits. Restaurants, cafes, and bars, especially those located near stadiums or tourist attractions, increase the average bill, while taxi companies and car rentals increase their fares. Often, flights and train tickets to the host cities are completely sold out long before the tournament begins.
Jobs: Short-Term and Term Prospects
The preparation and organization of the World Cup creates tens of thousands of jobs in both the private and public sectors. The construction of stadiums, roads, and hotels employs a wide range of people, including engineers, architects, builders, electricians and plumbers. Large infrastructure projects may also require the hiring of foreign workers if there is a shortage of local skills.
During the event, jobs in transport, security, hospitality, and retail increased. Around a million jobs were created in Brazil during the 2014 World Cup, but a huge number of these jobs were lost after the event.
The ability of the World Cup to influence the labor market in the long term depends primarily on careful forecasting and planning, as well as market demand for newly built facilities. Some countries manage to make good use of new stadiums and hotels, thereby offering many permanent jobs, while in others, the facilities fall into disuse and lead to mass layoffs. Some of the facilities allocated for the 2010 South African tournament were severely underutilized, leading to job losses and rising operating costs.
How the Championship Changes the Country’s Economy: Long-Term Effect
Like every great sporting event, the World Cup has far-reaching impacts, both good and bad, that are hard to ignore. The infrastructure and tourism industries greatly benefit from the tournament, and is a perfect example. After the championship in 2006, they saw foreign tourism increase by 14% in just one year. South Africa also had the same results due to inflowing international flights from newly constructed air routes in 2010. In some cases, it’s the host country that benefits the most in projecting its developed infrastructure toward being chosen for other significant athletic competitions, international expositions, or continental championships.
Not everything goes smoothly or as predicted, which has been the reality for many countries, which had to deal with unused sporting projects. Brazil is a prime example of this with the newly constructed Manaus stadium, which is virtually unused because local football clubs can’t fill the seats. The same happens with a number of sporting facilities in South Africa that can’t meet local sports league demands.
Some nations are, however, tackling the problem of how to sustain large stadiums by turning them into multifunctional complexes for hosting concerts, exhibitions, and business functions.
