Brazil, the host nation for the 2014 FIFA World Cup tournament to be held June 12 – July 13, 2014, is anticipating $11 billion USD in revenue from the popular event – an amount that is more than 20 times what was earned by South Africa when it hosted the event in 2010. The event in South Africa drew far fewer visitors than anticipated. In fact, the attendance rate in South Africa was just under 69 percent of what was anticipated.
Although the event left South Africa with just $513 million in total revenue generated, tourism industry groups are estimating that roughly 600,000 people will visit Brazil during the World Cup and will spend a combined $2.6 billion. Estimates by the same groups are also claiming that 3 million Brazilian nationals will attend the event and spend $7.9 billion.
The “World Cup Effect” – Will it Hit Brazil Like it did South Africa?
Many in Brazil are not buying into these numbers, and are actually using the lackluster South African numbers as proof. Many refer to South Africa as the most recent victim of the “World Cup effect” – a situation whereby the host country see more economic harm than prosperity from hosting the event. South Africa anticipated revenues of $900 million, but ended up with just under two-thirds of that amount. Similarly, the $4.5 billion invested to build stadiums and infrastructure has barely been recouped.
In a recent report on Brazil’s selection as the host city, written by Earnst & Young Terco, it was said that “…once the investments have been concluded and the World Cup has taken place, the positive impacts will remain based on the stakeholders’ ability to benefit from the event’s opportunities and legacies.” Whether this will be true for Brazil is yet to be seen, but some are already doubting the numbers. University of Maryland sport economist Dennis Coates says there is “…no evidence that the benefits promised by event organizers have ever materialized.”
By the numbers – World Cup in Brazil, 2014:
Year Brazil was selected as the host nation: 2007
Expected total economic impact: $107 billion USD
Expected economic impact from the event alone: $11 billion USD
Estimated new jobs: 710,000
Impact on tourism: $5.5 billion USD
Number of host cities in Brazil: 12
Hosting the World Cup in Brazil – an Opportunity Now – And the Future
One thing that attracts countries to vie for the chance to host the event is the potential indirect increase in tourism that can come as the result of international exposure through the media. But Brazil’s, tourism numbers have been stagnant in recent years, and as the quality of airports and other facilities declines, it leaves more questions than answers as to the effects of the World Cup on Brazil’s economy.
It should also be noted that if Brazil wants to make the positive effects of hosting the World Cup last, there will need to be definitive action taken to prolong the legacy of the event and capitalize on positive aspects of the event. This has been a problem in the past for cities that have hosted not just the World Cup, but also the Olympics and other marquee events.
June 12 – July 13, 2014 will be a turning point in Brazil’s history. Among a handful of nations to have the privilege of hosting the World Cup a second time, a lot has changed since the South American nation’s first go-round. If Brazil plays its cards right, and tourism numbers are accurate, the event will be a resounding success. However, if the predictions are wrong, and Brazil becomes the latest country to suffer from the “World Cup effect,” the long-lasting impact of a failed hosting of this event could have social and economic implications for years – even decades.