The World Cup will begin when Qatar hosts Ecuador in the first match on 20 November. The World Cup will end on 18 December, when the final is played at the Lusail Iconic Stadium with 80,000 seats. Qatar will be the focus of the world in the weeks to come, as it is the smallest nation by land area that has ever hosted the event. Qatar will want to impress, having faced criticism since winning the bid. Expect the spectacular.
Qatar won’t just be featured on TV screens or mobile devices around the world. Over 1 million tourists are expected to travel and inject much-needed economic stimulus. Berthold Trenkel has stated that Qatar wants to impress visitors with more than football. In the past few months, several new hotels, water sports resorts, and theme parks have opened. The Lusail Winter Wonderland will open on 1 November, a tourist island that offers a variety of attractions. According to the website, it is the ultimate entertainment and lifestyle celebration.
Are these expectations for increased tourist numbers realistic or just hype?
This question has been on the minds of economists for a while. Politicians often make bold claims about the tourism impact of mega-sports events such as the FIFA World Cup when countries bid to host them. These numbers are often used to convince taxpayers to pay for the extra costs of building new infrastructure. An event attracting so much attention from around the world would increase its appeal and attract new audiences.
Swings and Roundabouts
Nevertheless, many economists have said that there are reasons to doubt the predictions.
A major factor to consider is displacement. Tourists who would visit a particular destination may decide to stay home because of an event of this magnitude, which reduces the number of net arrivals. The size of the displacement can be affected by a number of factors, including the season during which the mega event is held or the type. The Summer Olympics will likely attract more tourists than the Basketball World Cup.
The size of the tourism boom can be as strange as the countries that qualify for an event. In a paper from 2017, we showed that Thierry’s handball during a qualifying game between France and the Republic of Ireland for the 2010 FIFA World Cup allowed France to qualify for finals. This brought nearly 30,000 more tourists to South Africa, creating over 6000 jobs.
This is because France has a larger population than Ireland. This means that despite France’s poor performance, there are more tourists in South Africa than Irish tourists who would have come if Ireland had qualified.
We first tried to answer the question of how mega-sports events boost tourism more than ten years ago. In 2011, our first article showed that, on average, hosting an event like the FIFA World Cup and the Olympic Games increases tourism by around 8%. The average effect was large, but it masks some variations across the events we studied. For example, the Summer Olympics were a big event, while the Rugby World Cup had a smaller impact.
We published a paper. We updated our data (now including all tourist arrivals between 1995 and 2019), expanded the selection of mega-sports events (from six up to eleven), and we implemented new techniques for estimating the gravity model. We also tested more hypotheses.
The findings
Our updated analysis has made us even more skeptical about the tourism impact of mega-sports events. We still see a positive and large effect of hosting the Summer Olympic Games, a whopping 18.2%. However, most other events show no negative changes.
For example, hosting the Cricket World Cup reduces tourist arrivals. The fact that the event is usually held during the peak tourist season and in rich countries is a part of the explanation. The displacement effect is greater than the number of new visitors.
Some might argue that the biggest benefit of hosting an event is the increase in tourism numbers after the event, not necessarily during it. This was tested, and we found that the legacy effect is very small. We find that there is a greater anticipatory effect. Host countries tend to welcome more tourists one or two years before an event.
Hosting a mega sports event signals the country’s willingness to welcome tourists and investors, as well as the international community.
Our analysis is not one of cost-benefit. In order to properly assess the economic benefits that can be gained from hosting a sporting event, which includes tourism, the benefits need to be weighed against costs such as the construction of new stadiums and transportation networks.
Given the importance of tourism in a new bid for a country, it is important to question whether these promises have ever been fulfilled.
The conclusion also has implications for future bids. Our findings showed that tourism in developing countries increased more than in developed countries. The next three Summer Olympic Games are scheduled to be held in France (US), Australia, and France. The next two FIFA World Cups will be hosted by Qatar, as well as a joint effort between the US, Canada, and Mexico.