2014-05-28

Key Takeaways from Hosting Such Mega Global Events Include A Boost to National Identity and a Legacy of Infrastructural Improvement

International property consultancy, Colliers International’s latest white paper titled “FIFA World Cup 2014: Brazilian Goals” explores the returns and impacts of the previous FIFA World Cups have had on the host nations, and what it means for the host country this year – Brazil.  The White Paper draws its analyses and conclusions on experiences dating back to the World Cup held in Mexico in 1970.  

The study revealed that most of the benefits of hosting the World Cup are indirect and long term; therefore, making it difficult to directly quantify.  Nonetheless, the findings suggested that measuring the success or failure largely depends on the host nation’s motivations for holding the event, which are not necessarily limited to financial gains. 

Mr Roger Hobkinson, Director of Destination Consulting at Colliers International EMEA, says, “We must consider the motivations of a country (and its cities) for hosting so that a balanced review of the net benefits can be made.” 

In addition to raising the profiles of the country and its cities, as well as enjoying and promoting the sport, the common core motivations of the hosting countries also include asserting a regional and international role on the global political platform – demonstrating modernity and transparency; and bringing forward infrastructural and real estate projects – supporting national, regional and urban economic development strategies. 

In fact, an interesting finding from the review of these motivational factors is the use of stadia as catalysts for urban development, which has really only gained popularity since the World Cup held in Italy in 1990. Hosting the World Cup also acts as a catalyst for the renewal of facilities. 

A common theme that runs through nearly all the World Cups is a legacy of infrastructural improvement.  It is, therefore, tempting to conclude that the key result of seeking and committing to hosting a mega event, such as the World Cup, is the practical galvanising of national and political resolutions to focus on delivering major infrastructural projects that may have been unrealised on the national agenda for a considerable number of years. 

Therefore, the net gains for Brazil from hosting the World Cup this year will be substantial, though indirect, in the coming years following the event.  They include the following: 

  • It is expected that selected stadia in Brazil will be the catalysts for urban economic and real estate development. The greatest beneficiaries are likely to include Arena de Sao Paulo (Sao Paulo), Arena Pernambuco (Recife) and Estadio Pantanal (Cuiaba).  
  • Infrastructural and modernisation projects, which also support economic development, are brought forward in a far shorter time than would have been expected without the World Cup.  Thereafter, a legacy of infrastructure remains, accompanied by improved roads, transport connections and telecommunications, all of which might have not otherwise been realised. 
  • While direct economic gains are unlikely to be substantial, especially since visitors are likely to be crowded out during the month of the event, it is observed that a marked increase in leisure and business visitors in the years following mega world events, such as the World Cup and the Olympic Games. 
  • Both the upcoming World Cup and the 2016 Olympics will introduce Brazil to the global stage.  These mega events will act as a giant advertisement for Brazil and its host cities, showcasing them as places in which to invest, visit and live.  

Mr Walter Boettcher, Director of Research & Forecasting at Colliers International EMEA, says, “If you wish to promote a country and its main cities as a large corporate might promote its own brand; hosting a World Cup or any other mega events would deliver success.  In contrast, if you wish to make a commercial profit, or if you want to increase popular support in your country, ample evidence suggests there are far easier ways to achieve these very different goals.” 

Mr Simon Lo, Executive Director of Research & Advisory Services at Colliers International Asia, shares similar views, “Looking closer to home, Asia’s experience in hosting the World Cup is in 2002, during which Korea and Japan co-hosted the event.  There were some positive impacts on Japan before and during the games, such as an increase in the number of foreign visitors and a short boost to GDP.  However, the World Cup is limited to football and its impact was different to Japan’s experience with the Olympics, which has a wider appeal to a wider audience.” 

He continues, “In South Korea, the results were more tangible.  185,000 jobs were created and there was certainly an allure to tourists, with 139,600 visitors for the World Cup and 93,200 indirect visitors.” 

The next World Cup in 2018 will be held in Russia, where there are already announcements that nine new stadia planned plus others undergoing major upgrades, coupled with infrastructural improvements, add up to a current price tag of €20 billion.  Planning work is reportedly advancing well with all stadia slated for completion by autumn 2017.  

For many reasons, this promises to be a fascinating World Cup event, showcasing an open, modernised Russia and generating a positive profile for Russia around the world.