Insurance & Actuarial New business South Africa

Foreign fan fare

Whatever the state of the global economy, SA expects a spending boost from thousands of World Cup football visitors next year.

A “scenario analysis” by the Bureau for Food & Agricultural Policy reckons 300,000 - 500,000 foreign fans will come for the tournament. They will stay for 10-20 days and spend, on average, à280 (R3200)/day each. The calculation is based on amounts spent during the 2006 World Cup in Germany. “It is likely foreign visitors for the World Cup in SA have at least the same budget,” the bureau says.

The report was commissioned by the Red Meat Producers' Organisation to assist the industry's planning. Because of global economic uncertainty it developed four scenarios around the number of visitors, average length of stay and countries of origin. It estimates between 3m and 10m individual overnight stays in SA will be paid for during the tournament.

Indications are that all the match tickets will be sold. For Germany 2006, applications for tickets were more than four times the number available. “Even if the economic crisis dampens demand, it's probable all the available tickets will be sold.” It's not known whether fans will travel alone or with families.

The worst-case scenario is 300,000 arrivals. Ticket applications indicate about 25% of those coming will be from the US; 10% from each of the UK, Germany and Holland; 8% from Brazil; 7% from Australia and 5% from each of Italy and France.

This tells the bureau that total meat consumption will increase by between 760t and 2700t. “The biggest impact will be on the high-value fresh cuts for the hospitality industry. To maximise the positive impact of the 2010 World Cup, the red-meat industry must have the right product, the required quality and the correct volume for a very specific period, at the correct location.”

However, “foreign spectators can change their consumption patterns if they do not find the products or quality that they are used to at home”.

Another uncertainty is how the local population will change its travel, holiday and consumption habits during the tournament. “In Germany, the hospitality industry actually reported a downturn of business because local travellers did not travel during the event. Local consumption habits might also change because locals decide not to eat out but rather stay at home.”

Source: Financial Mail

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