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Cup Runneth Over: Will The World Cup Be Worth The Cost For Brazilian Tourism?




12 Jun, 2014

Thursday’s match pitting Brazil against Croatia at Sao Paulo’s Arena Corinthians marks the opening of the 2014 FIFA World Cup. Brazil is spending billions of dollars to stage the event, and government officials have promised that the global football tournament (soccer to North Americans) will not only drive travel and tourism to Brazil, but improve economic fortunes in the 12 cities that will host matches.


Yet in the weeks leading to the tournament, protests across Brazil indicate that not everyone is satisfied the World Cup will generate long-lasting tourism growth or economic and societal improvements. Protestors are angry over the billions spent on World Cup stadiums and infrastructure, even as many Brazilians struggle with what they consider inadequate transportation, employment and public services.


As Brazil prepares not only for the World Cup but the 2016 Summer Olympics, which will take place in Rio de Janiero, many question the ability of international sports events to generate sufficient returns.


In other words, will the 2014 FIFA World Cup be worth the cost?


Big Spending


In all, Brazil is spending $7.9 billion on infrastructure in preparation for the World Cup, including $3.6 billion on stadiums, $3.6 billion on public transportation and $89.4 million on tourism-related projects. The funds will go to 42 “urban mobility” projects including 17 new expressways, five new subway stations and light rail terminals, plus 13 bus rapid transit lines and two new light rail vehicle systems.


Through BNDES, the Brazilian Development Bank, the country has invested $2.2 million in projects to improve waste management in the 12 host cities. And during the World Cup’s 45 days, Brazil will double the number of public safety officials at its country’s airports.


“Several projects were finalized for the events and they will leave a major legacy that will improve the country's capacity to receive tourists,” said Vincente Neto, president of Embratur, the Brazilian tourism board. “For example there was renovation and expansion of 27 airports, hotel capacity is up and we now have more than 450,000 rooms. We have trained 92,000 skilled workers in many different sectors, including hospitality. From the point of view of exposure, the gain is incalculable.”



There is little doubt the World Cup will draw widespread global attention. The 2010 final match between Spain and the Netherlands was viewed by 3.2 billion people, or 46 percent of the Earth’s population. The 2014 match events will utilize an estimated 71,000 hours of broadcast television time, and the 12 Brazilian cities that will host this year’s World Cup matches will welcome millions of Brazilian fans and hundreds of thousands of foreign visitors and media, who will spend nearly two months sampling the host cities’ cultures and daily living. Most of the 2.6 million available tickets to World Cup matches have been sold, FIFA reports. And while revenue from those ticket sales goes directly to F the direct economic impact of World Cup visitors’ hotel stays, dining, shopping and sightseeing activities will total millions of dollars.


Yet not all Brazilians are convinced Brazil’s World Cup spending will bring lasting benefits. Despite the country’s overwhelming passion for “the beautiful game,” many are dissatisfied Brazil has seemingly placed the sport ahead of other priorities. Recent protests have included a strike by subway workers that paralyzed traffic in Sao Paulo, Brazil’s biggest city. Although the workers eventually suspended the strike, they have warned that they may resume the walkout once World Cup matches begin.


Furthermore a Pew Research Center study cited in The New York Times found that only 34 percent of Brazilians think the World Cup will help the economy. Another 39 percent say the tournament will actually hurt Brazil’s image around the world. Also a recent poll from Datafolha, a Brazilian media organization, 48 percent of Brazilians favor their country’s hosting the tournament, down from 79 percent in 2008.


Fleeting Fortunes?


There is some evidence that large-scale sports tournaments do not return lasting benefits to communities. In 2006, the European Tour Operators Association (ETOA) released a study that reported tourism in countries that hosted the previous five Olympic Games did not grow, but in fact declined in the years before and after the event.


The study found that Australia’s 10 percent growth in visitor arrivals turned into a decline two years before the 2000 Olympics, and growth remained stagnant for two years following the event. Nearby New Zealand on the other hand maintained steady growth throughout the decade from 1994 to 2004.


In 2006, the European Tour Operators Association (ETOA) released a study that reported tourism in countries that hosted the previous five Olympic Games did not grow, but in fact declined in the years before and after the event.


The ETOA study also claimed such events offer no long-term tourism benefit. Using the 1992 Barcelona Olympics as an example, the report said that city’s tourism growth following the Olympics trailed comparable European cities including Prague and Dublin.


Sensitive to such issues, leaders including Brazilian president Dilma Rousseff have defended the country’s World Cup investments, saying they will not only produce economic and tourism gains but satisfy the nation’s passion for football at the highest level. Brazil “will show its passion for football” once the tournament begins, said Rouseff this week.


Neto adds, "Brazil has gained a lot of experience in organizing large events with great success, as was the case last year with the FIFA Confederations Cup [a pre-World Cup tournament held in 2013]. We feel that Brazil is well prepared to receive many tourists during the games.”


Moreover some recent World Cup experience contradicts the ETOA findings. According to South African Tourism (SAT) officials, more than 309,000 tourists visited the country for the 2010 FIFA World Cup, and South Africa continues to register double-digit tourist arrival increases each year since the event.


“Since 2009, from the World Cup numbers to now, we have grown by 21 percent,” said Sthu Zungu, president of South African Tourism North America. The growth has continued through present times: the U.S. accounted for nearly 350,000 tourist arrivals in South Africa in 2013 according to SAT data, a 6.7 percent increase over 2012.


Moreover, a survey conducted among South Africans in the aftermath of the event found that 97 percent felt the event had “improved the country’s reputation.”


Keeping Score


In the case of the 2014 World Cup, Embratur officials assert that the “considerable efforts” to prepare for the event “far outweigh the impact of some delays that ultimately will not interfere” with the tournament’s success.


They cite a survey by the Economic Studies and Research Institute Foundation (FIPE) at the University of Sao Paulo, completed in partnership with Brazil’s Ministry of Tourism, which found the Confederations Cup added $4.3 billion to the country’s gross domestic product (GDP) in 2013. Embratur officials say the 2014 World Cup will generate three times that total (about $13.4 billion). And of the $3.58 billion invested in new World Cup stadiums in five cities, one-half of the funds were from BNDES loans, which they say will be repaid through World Cup proceeds.


“Undoubtedly, the world's eyes are on Brazil."- Vincente Neto, president of Embratur


At the least, Brazil’s costly new stadiums should be utilized even after the World Cup ends, if for no other reason than the fact that the sport is so revered here. The new facilities will undoubtedly be used by local and regional professional teams and leagues. During the 2013 Brazilian championship the average attendance at the six stadiums built for the 2013 Confederations Cup was 88 percent higher than that of the older stadiums, say Embratur officials.


“Undoubtedly, the world's eyes are on Brazil,” said Neto. “This is an excellent opportunity for tourism in Brazil, which will be beneficial for the country, not only for the period of the World Cup, but also for the future.”


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