World Cup an economic boon for New Zealand

2011-09-13 08:58

The Rugby World Cup was set to have a “profound” economic effect, as big-spending international visitors flock to New Zealand for the largest event ever staged in the country, a study said today.

The study, carried out by Britain’s Coventry University Business School, estimated 95 000 overseas visitors would spend NZ$782.5 million (about R4.9 billion) during the six-week tournament.

It said the long-term World Cup legacy for the host nation through tourism and business development would be even more valuable, totalling an estimated $1.21 billion (nearly R9 billion).

“The benefits of Rugby World Cup 2011 will be profound and far-reaching,” said the report, commissioned by tournament sponsor MasterCard.

“Such benefits will be both short- and long-term, local, global and felt both within the sport of rugby union and the global sport economy.”

It said the Rugby World Cup, billed as the third largest sporting event in the world, was expected to attract a cumulative global television audience of more than four billion people, providing invaluable exposure for New Zealand.

While the number of international visitors was down sharply on the 350 000 who attended the last tournament in France four years ago, the report’s authors noted they were likely to stay in the host nation longer and spend more money.

They said measures such as extending the half-time break from 10 minutes to 12 minutes and scheduling kick-off times later than normal was also set to increase the tournament’s television advertising revenue.

Late starts and extended breaks also meant fans were likely to spend more on food and drink while watching games, the report said, boosting revenues at both match venues and bars screening the tournament.

In total, rugby fans were set to down 7.5 million litres of beer and 7.35 million pies and sausages as they cheered on their teams.

The report also said the resilience that New Zealanders had shown hosting the tournament in the wake of February’s devastating Christchurch earthquake, which killed 181 people, would also reflect positively on the country.

While World Cup matches scheduled for the city had to be moved alsewhere, the report said the stoic response to the disaster could “bring to life the essence of local culture in a way that an advertising campaign never can”.

The study’s estimated spend from overseas visitors of NZ$782.5 million exceeds a forecast of NZ$700 million released by the Reserve Bank of New Zealand earlier this year.

Whatever the final figure, the World Cup will provide a welcome boost to New Zealand’s farm-based economy, which is struggling to shake off the impact of a lengthy recession that ended in mid-2009.

The inflation rate hit a 21-year high of 5.3% in the 12 months to June, as rising fuel and food prices pushed up the cost of living, while economic growth in the year to March was a modest 1.5%.

The cost of rebuilding Christchurch, estimated at more than NZ$15 billion, is also weighing on the economy.

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