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The country will benefit in the long run from the World Cup. The profiling of South Africa and future spin-offs have always been the real benefit, says Grant Thornton.
THE 2010 FIFA World Cup™ is expected to gross about R93-billion, 62 percent of which will be generated prior to kickoff and 38 percent during the course of the year.
Gillian Saunders, director of strategic solutions and principal at Grant Thorton
Most of the economic investment in the tournament comes from the national government's spend on infrastructure and other operational expenditure. This is a significant increase from initial budgets, growing from R17,4-billion in 2007 to R30,3-billion, with an additional R9-billion or more being spent by cities and provinces.
This is the forecast of Grant Thornton, an independent accounting and consulting firm, which reached its conclusions through consultation and statistics from FIFA and the 2010 FIFA World Cup Local Organising Committee South Africa.
This year's net additional economic impact is forecast at 0,54 percent of the gross domestic product (GDP) - this is comprised of an estimated 0,48 percent from the additional net of foreign tourism and 0,06 percent from FIFA spending. According to Grant Thornton, this is significant because this year's GDP growth is estimated at 2 to 2,5 percent, 0,5 percent of which is accounted for by staging the World Cup.
Addressing a large contingent of journalists at the firm's Sandton offices, Gillian Saunders, the director of strategic solutions and principal at Grant Thornton, noted that foreign tourism during the football showpiece would yield about 16 percent of the gross impact.
Job figures
Figures for job creation during the tournament were very encouraging, Saunders said. She projected that about 695 000 annual jobs would be sustained. Of these, 280 000 would be sustained in 2010 while 174 000 would be sustained by the net additional economic activity, by at least year end. This was an economic measure of annual jobs sustained by economic activity and not new jobs created, she explained.
Joburg is a key host city of the World Cup, where the opening and final matches will be held. Several of its stadiums have been earmarked to serve as training venues and some of the preliminary rounds will be played in Joburg. Overall, about 15 of the 64 matches will be played in the city - 10 matches in the group stages, two Round of 16 matches, two quarterfinals and the final.
Visitors are expected to flock to Joburg, host city to the final of the 2010 World Cup
"We continue to be upbeat about the impact of the World Cup," Saunders added. "The stadia will be full and it will be [a] great event. The profiling of South Africa and future spin-offs have always been the real benefit of hosting an event of this magnitude."
Saunders expected World Cup visitors to stay longer and spend more throughout the month-long football tournament. "Indications are that overseas tourists will stay an average of 18 days compared to the 14 days used in the original projections. If they stay longer they spend more, because we work on spend per day."
The total number of visitors initially projected had dropped by about 22,7 percent. "Given the recessionary conditions as one element, I think part of the change is in the patterns in which we expect tourists to behave in the country."
World Cup visitors are expected to flock to Joburg because of its tourism allure and accessibility to sports precincts and other much-needed amenities and facilities.
Revised figures
Grant Thornton had revised figures taking into account the fact that the recession was slowly abating, and that tickets sales were encouraging. About 3,05 million World Cup tickets are expected to be sold.
On average, overseas tourists would spend about R30 200 per trip in contrast with the R22 000 forecasted earlier, she added. The average spend had been predicted based on an analysis of current tourist spending trends as well as "dipstick" surveys of potential visitors and expenditure by visitors for other sporting events such as the Lions' Tour.
Grant Thornton expected foreign World Cup visitors to attend an average of five football matches per person, up from the 3,4 matches previously projected. This was in contrast with an average of 2,6 matches attended by foreigners at the last World Cup in Germany.
With fans snapping up World Cup tickets, stadiums will be full
The company extrapolated that about 105 000 of the 373 000 World Cup visitors would be without tickets, 85 000 of whom would be from Africa, coming here for a short visit. The forecasted 105 000 was down by 16 percent from the 125 000 non-ticket holders predicted previously, said Saunders.
Visitors
About 228 500 overseas ticket holders were expected to attend the World Cup, most of whom would come from the United Kingdom and the United States, accounting for 38 percent of ticket sales. Ticket sales to Africans accounted for only 2 percent, with 11 300 Africans currently holding tickets.
African ticket holders were initially projected at 48 145, a difference of -77 percent, Saunders said. Given evidence of huge interest from the continent, this indicated that there had been a failure in distribution channels and unaffordable pricing.
FIFA's initial ticket allocation was about 3,7 million.
World Cup visitors were initially forecasted at around 483 000, however because of unprecedented circumstances this number had decreased substantially to 373 000. Because the gross economic impact had increased extensively, this would have a bearing on the net.
More than anything, Saunders said one of the spin-offs of the World Cup was that it would be able to refute any malicious perceptions about the country and would increase South Africa's international stature and profile.
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