How major sporting events impact the economies of their hosts


It has long been debated whether major sporting events are really worth the hosts’ time and resources, so we’ve taken a look at a couple of case studies to explore the potential economic impact of major events.

If we look at this year’s Rugby World Cup, it is clear a significant capital expenditure was required to improve Twickenham stadium. The redevelopment of the stadium alone cost £76 million. In addition to this, there is a commitment by training grounds and match venues to improve their facilities and by host cities to make long term infrastructure enhancements. These pledges have meant that an additional estimate of £85 million has been invested. With these costs just scratching the surface, there is a total estimated spend of just under £1 billion yet the estimated return for the economy is £2.2 billion. So where is the return expected to come from?

Major events such as the Rugby World Cup and Olympic Games bring many benefits that can have significant impacts on economic development. One of these benefits is employment. During the London Olympic Games in 2012 more than 46,000 people worked on the Olympic Park and Olympic Village – 10 per cent of whom were previously unemployed. In total there were over 100,000 jobs created across London due to the Games.

Just one year after London entertained the world, the British government announced the UK economy had already seen a £9.9 billion trade and investment boost as a direct result from hosting the Games. One of the main areas of the economy that benefited from the Games was the construction industry which had given the UK economy a £7.3 billion boost.

Many major events however are justified not only by job creation and trade but on the basis of tourism and visitor expenditures. It is just 12 short weeks until Milton Keynes hosts its first Rugby World Cup match between France and Canada so organising a good fan zone is of the upmost importance. It has been estimated, based on the various ticketed events and the capacity of the area, that Milton Keynes can expect a boost to the economy of around £56 million.

This injection of tourism won’t just have a financial impact but will also provide a sense of community within the town. Local businesses and community groups have been encouraged to get involved and offer suggestions about what they could do to ensure that any visitors they do have, receive the best experience possible.

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