RWC: Australia's expectations bore fruit

Australians spent A$136.6 million on tickets for the Rugby World Cup in 2003. Photo / Brett Phibbs

New Zealand is unlikely to unleash a river of gold from the Rugby World Cup, with immediate gains almost certain to shrink over the next few years despite greater global exposure of the country and its businesses.

But studies of Australia's experience after the 2003 Cup suggest there will be real benefits in the short-term at least, especially for tourism but also for companies able to grab the coat-tails of corporate visitors.

Longer-term gains are harder to determine, but may continue beyond Cup memories as they blend into much harder to define economic and business patterns.

Australia's expectations for the Cup were ambitious: A$494 million ($621.6 million) in additional industry sales; an extra 4476 full and part-time jobs in 2003; an additional A$55 million in federal revenue; an extra A$289 million to GDP; more than 1.8 million tickets generating almost A$200 million; and an additional A$27.3 million in longer-term tourism sales in 2004 and 2005.

Initial indications tended to support the forecasts.

Growth hit a four-year high in the final quarter of 2003, with "significant economic activity and revenue" reflecting booming demand for services such as bars, hotel rooms, restaurants and local transport.

A Deloitte study commissioned by Rugby World Cup Ltd in 2008 gave further evidence of Cup gains, reporting that 65,000 international visitors on stays of between 15 and 36 days spent A$262.3 million, generated A$324.8 million in extra industry sales, and contributed A$190.5 million in GDP.

Australian Rugby Union figures were equally impressive: more than 50,000 international tourists, and an overall A$1 billion economic impact.

But the most comprehensive and widely quoted survey was a study of the economic impact made by URS Finance and Economics for the Department of Industry, Tourism and Resources.

This found that the Cup had followed the patterns of other major international sporting events, producing significant short-term gains that diminished with time.

The report said the economic impact had been considerably smaller than the Fifa World Cup or the 2000 Sydney Olympics, although major construction work would have boosted the Games. And the Cup's impact had been significantly larger than the Melbourne Spring Carnival, the Formula One Grand Prix and the Australian Tennis Open.

The study said that of the 1.8 million spectators at Cup games, an estimated 65,000 were international rugby supporters who visited Australia primarily because of the RWC, mainly from Britain, Europe and New Zealand, with about 20 per cent from Africa and the Americas. On average, they stayed for about three weeks and spent A$6300 each, with a total A$410 million splurged on Cup tickets and holidays.

Australians themselves spent A$136.6 million on tickets and an estimated A$142.6 million on trips to interstate games. Most of the total was spread across packaged tours, international and domestic air fares, self-drive transport, petrol and other transport costs, shopping, food, drink and accommodation, gambling, entertainment and communications.

Judging the long-term impact was more difficult. The URS study said large events appeared to have some impact on subsequent tourism numbers, mainly through promotion effects and likelihood of repeat visits, but the effect seemed to be limited in the longer term and small in comparison to overall tourist numbers.

Surveys for the Sydney Olympics showed that only 5 per cent of international visitors to Australia in 2000 had been influenced by the Games. A year later this had fallen to 1 per cent, and to 0.6 per cent in 2002.

Australia is a long-haul flight for most of the country's international tourism market and, with distance and time, the cost of travel is an important consideration.

"The cost of a ticket is likely to represent a higher proportion of a cost of holiday than, say, for a traveller between European countries," URS said.

Its study estimated that in 2004 and 2005, the RWC would have generated an additional 5755 international visitors, spending an extra A$27.3 million. After 2005, any RWC influence on international visitors would have diminished.

"Tourists visiting Australia one or two years after the event are likely to have a wide variety of motivations [and] while promotion of Australia during the RWC television coverage may be a factor in the travel decisions of international visitors, it is likely to be only one of a wide range of motivations."

Similarly, the study said, while business expenditure conducted during the tournament had a very clear and specific motivation related to the hosting of the Cup, it was difficult to envisage companies increasing their investment in - or trade with - Australia solely on the back of some executives visiting the country to attend RWC matches.

"Investment and trade decisions are typically based on the extensive business research and analysis over long periods of time," the study said.

"While an executive's interest in Australia might have been piqued or enhanced by their attendance of the RWC, it is likely to be only one of many factors, albeit a very important one."

But the study said the government agency Austrade had reported several significant trade and investment negotiations during and immediately after the Cup, including large lobster sales to France, property management software contracts with South Africa, and yellow-tail kingfish exports to Singapore. Austrade also directly attributed other deals to the Government's Rugby Business Club Australia programme, involving export deals worth A$44.6 million - eight to first-time exporters - with more than 600 other companies either about to sign contracts or expecting foreign sales in the two years after the Cup.

In all, Austrade told URS, more than A$190 million in export deals had been secured by Australian companies by 2004, covering food, wine, health, information technology and telecommunications, selling to India, France, South Africa, China, Britain, United States and Singapore.