Playing the perfect host
With a number of matches in the Euro 2020 football championship to be played in Dublin, what is the real economic impact of a major sporting event?
South Africa spent hundreds of millions on stadium infrastructure for the 2010 World Cup that would have no real future value or usage after the event. Photograph: Clive Mason/Getty Images
While they can impact greatly in economic terms and there are also huge benefits for society in general, major sporting events are not always a positive for a host country. Look at South Africa during the 2010 World Cup – hundreds of millions were spent on stadium infrastructure that would have no real future value or usage after the event, while money was diverted away from grassroots to spend on vanity infrastructural projects.
For Ukraine and Poland 2012, large stadia were built to host major fixtures, which are now near obsolete or have second- and third-division teams playing at the grounds, with not nearly the draw to fill them.
In most instances, the host country will have to underwrite and guarantee the cost of staging the event, while most of the profit goes to the promoters.
Ireland is in the lucky position that it will be hosting a number of Euro 2020 matches at the already-built Aviva stadium, which will be called the Dublin Arena for the duration of the tournament, so will not have to incur any of the infrastructure costs normally associated with staging a major event.
And in doing so it is expected to bring a total of €99 million into the economy.
“Benchmarking estimated spend for out-of-state fans to previous Six Nations events here and our own assumptions about the average spend by Irish spectators attending the games suggests a total benefit of €99 million for the four games,” Phillip O’Sullivan, chief economist at Investec says.
Industries that are likely to benefit most from this tournament and others like it include transport, tourism and hospitality.
Hotels, bars, restaurants, airlines, ferry companies and tourist attractions are all likely to be the big winners when tournaments like this take place, with a lot of out-of-state fans likely to spend a couple of days in the country.
‘Very professional offering’
“Ireland is fortunate in having a very professional offering to visitors. We have a generally very well-invested stock of accommodation offerings to visitors, world-famous bars and a vibrant food scene ranging from the country’s 14 Michelin-starred restaurants to more mainstream offerings. Having hosted many important sporting events over the years, the experience honed from those will enable the sector to capitalise on the opportunities presented by the Euro 2020 games,” O’Sullivan says.
However, capacity is likely to be an issue. Recent STR data, which benchmarks hotels, show that Dublin has the highest hotel occupancy rates in Europe, although several thousand additional hotel rooms are likely to be added to the capital’s stock before Euro 2020.
“We note that the effect of these extra rooms will likely be part-offset by the recent curbs on Airbnb lettings. Dublin’s capacity issues are not only limited to the accommodation segment, with public transport and the capital’s main roads already suffering from congestion issues at peak times. The additional demand produced by tens of thousands of visiting fans presents a challenge to those tasked with keeping Dublin moving,” O’Sullivan says.
Large sporting events have a good economic impact on business in general and there is a positive correlation with large sporting events and local business turnover, John Gillick of AIG says. “You just need to look at the numbers attending and what their needs and plans are, so everything from hotel rooms, B&Bs and Airbnb to cater for the travelling fans to the food, pub/hospitality, merchandise and transport businesses that get an uplift around big games,” he adds.
Major sporting tournaments are always a great lift for the country too, in terms of collective mood.
“Sport brings people together socially and emotionally, and that is positive, especially when your team wins,” Gillick says.
“Hotel capacity can be an issue, plus over-charging of accommodation, drink, food and transport around big sporting events can lead to a negative experience,” he adds.
Sarah Colgan, managing director of Along Came a Spider, says Dublin hosting a number of the Euro 2020 matches will be a valuable stepping stone to Ireland being chosen as host nation for more major sporting competitions in the future, and that has to be a good thing.
GAA, soccer and rugby are the leading sporting events to take place in this country currently, but golf is also having a major impact.
Emer McGrath, partner at KPMG Ireland, highlights the role of major golfing tournaments in helping promote the game, while making a big contribution to the local economy.
“2019 sees the British Open come to Royal Portrush for the first time since 1951, the Irish Open is at Lahinch and the Northern Ireland Open features both a men’s and women’s tournament – all of which will provide a welcome boost to tourism away from our main cities,” she says.
“Given the positive impact that the matches will have in terms of temporary employment; tourism / hospitality spend; and, by extension, the exchequer, we see the games as being very welcome for the country,” O’Sullivan says.