02 December 2015

Can Japan replicate England’s success in 2019?

Zach writes*

It has been approximately three weeks since New Zealand made history after their third Rugby World Cup (RWC) victory over their Oceanic neighbour, Australia. For the avid sports fan this news would be nothing new, as they would have been part of the 2.2 million spectators watching the whole tournament unravel live in England.

The question, however, that struck was why would any rugby country push to become hosts for the world cup? Surely, the driving factor is not pure vanity? I would imagine that countries would gain some benefits from hosting the RWC, given the necessary readjustments to accommodate the influx of incoming people, or is simply out of pride?

The RWC was launched in 1987, and since its inception the game has expanded to the extent that it has helped attract an international audience. The country hosting, therefore, becomes susceptible to a variety of opportunities. The host, temporarily, becomes the epicentre of international [rugby] tourism and this becomes advantageous as it advertises itself to investors from the global market. Additionally, to develop infrastructure coupled with a lasting legacy.

Are England, along with the other 11 cities in and around the UK, lucky to have won the bid for the 2015 Rugby World Cup? For starters, such an event has a strong global platform, making it a real sporting spectacle that is hard to miss. There will be 20 countries spread across six continents. This World Cup would draw the most amount of international visitors, up to 466,000, and I am inclined to believe that this milestone will have positive impacts on the English economy and by extension the UK’s economy.

Upon getting the green light on becoming hosts for the Rugby World Cup, England and parts of the UK spent an astonishing £2.2 billion. The accountancy firm Ernst & Young, fortunately, calculated the money invested is not in vain. Given the number of expected international visitors, they predicted that an extra £982m will be added to the UK’s GDP and that international visitors will spend £869m. This was comforting to know as I am sure England did not want to be labelled as ‘worst prepared’ as Brazil did when it hosted the Football World Cup in 2014.

The influence of international visitors and their sheer quantity. It is calculated that many of these visitors will soak the most out of the UK and, consequently, are comfortable about splashing £200 on a daily basis, whereby games are watched live in pubs and bars. Furthermore, food expenditure form supermarkets will increase by a third during this event.

There are other benefits apart from the inflow of international visitors. In preparation for the tournament, host cities already benefited from £85m in infrastructural developments. The UK could easily mimic New Zealand, half their businesses saw their international networks boosted by hosting the tournament in 2011. Luckily this was the case, where the structural investment created 41,000 extra jobs. So quite clearly hosting the RWC is an investment worth risking and can only give rise to further internal investment.

Bottom line: Despite England’s poor performance in the RWC, hosting it served as a platform for economic growth. Given New Zealand’s success as host and recently England’s, we hope that Japan receives the same success.

* Please comment on these posts from my microeconomics students, to help them with unclear analysis, other perspectives, data sources, etc.

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