Development Southern Africa Vol. 28, No.

3, September 2011

The 2010 FIFA World Cup highfrequency data economics: Effects on

international tourism and awareness
for South Africa
Stan du Plessis & Wolfgang Maennig
The 2010 FIFA World Cup in South Africa was undoubtedly a great experience for both soccer fans
and their South African hosts, and focused unprecedented and favourable media attention on South
Africa. Despite the tournaments manifest success, however, its short-term impact on international
tourism to South Africa, in the form of immediate positive effects on the economy, has turned out to
be much smaller than expected or even as reported during the tournament as this paper shows,
using high-frequency daily data on tourism. This sobering outcome may be attributable to
self-defeating expectation effects and this paper is a warning against overly optimistic economic
impact studies which could undermine the short-term benefits of major sporting events. The
paper also investigates the awareness effects of sport mega-events, and potential long-term
development effects, by using data from electronic social networks.
Keywords: sport mega-event; sport economics; tourism; self-defeating expectations; Google;
Facebook; social networks; 2010 FIFA World Cup
JEL codes: L83; R53; R58

1.

Introduction

The 2010 FIFA World Cup was clearly successful as a tournament and as an advertisement for South Africas capacity to host a global event. Expectations were high prior to
the tournament regarding the home teams performance and the tournaments magnitude
as a major event with the potential to benefit the South African economy.
The home teams strong performance, better than could reasonably have been expected,
was the source of much local pride. Further, the tournament was an organisational and
logistical success, contributed to the cultural appreciation of the game of football, and
was an advertisement for South Africas capacity to host a global event despite the sometimes pessimistic forecasts in the international media. An otherwise critical international
press did not contradict the summa cum laude grade assigned to the World Cup by
FIFA president Sepp Blatter (Reeves, 2010).
An economic analysis of the 2010 FIFA World Cup should be conducted at the micro or
managerial level of the Local Organising Committee (LOC) and of FIFA. The financial
outcomes of the LOC are not yet known. FIFA, which earned US$3.4 billion in
total commercial revenues, provided the LOC with US$423 million, an amount that is
Respectively, Professor, Department of Economics, University of Stellenbosch; and Professor,
Department of Economics, University of Hamburg, Germany. Corresponding author: stan@
sun.ac.za
ISSN 0376-835X print/ISSN 1470-3637 online/11/030349-17 # 2011 Development Bank of Southern Africa
DOI: 10.1080/0376835X.2011.595994

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considered to have been sufficient to ensure that the tournament was within budget
(Pedroncelli, 2010). The costs of the stadiums and the transport infrastructure were
almost entirely publicly financed, but these costs should not be attributed solely to the
2010 FIFA World Cup, since these investments have long-term benefits. It is too early
to assess the ultimate impact of these public investments on the long-term growth path
of the economy.
On a micro-level, there are always winners, losers and those who are unaffected by a
major event of this kind. On the one hand there are reports of increased demand for vuvuzelas, travel in luxury coaches, tour operators and tourist attractions close to the stadiums
(personal communication, Mariette du Toit-Helmbold, CEO, Cape Town Tourism, 25
June 2010). On the other, South African manufacturers seem to have been largely unaffected by the event (personal communication, Denny Thaver, Coface, SAs trade credit
protection company, 2 July 2010).
But there was also controversy: Many South Africans experienced the tournament preparations as disruptive (Tolsi, 2010). FIFAs prescriptive approach and the LOCs plans
were also controversial. Cornelissen (2009), for example, raises the concern that the
plans would entrench existing spatial inequality in the country, and Darkly and Horn
(2009) point out that owners of guesthouses were discouraged by the rigidity of the
FIFA and LOC requirements for accreditation.
To appreciate the total economic impact of a major sporting event, it is necessary to
move beyond data on individual enterprises and sectors to investigate the effect of the
tournament using meso and macro economic data. These data have the advantage of
aggregating possible increases in the incomes of individuals with the losses of others,
thereby presenting a general economic picture.
The paper starts with a discussion of the net tourist increase to South Africa during the
FIFA World Cup, as this is the major source of short-term economic benefit. We used
high-frequency data to estimate the likely tourist flow. After this follows a discussion
of possible reasons for the disappointing number of actual tourist arrivals after the optimistic estimates. But there have been other short-term benefits, including a feel-good
effect and longer-term gains in the form of image and improved international perception
of the economy. Evidence for these effects is discussed in the final section of the paper.

2. International tourism: The origin of short-term income and employment

effects
2.1 Optimistic expectations and their impact on tournament preparations
The additional impact on local income and employment of a major sporting event results
only from expenditures by non-residents visiting the event region. Expenditures by domestic residents on the event do not typically contribute to the impact of the event beyond
the immediate duration of the tournament; even if individuals purchase televisions and
other items used in relation to the event, the event usually affects the timing of the consumption decisions rather than the overall level of consumption and savings. Any
increased consumption by residents during the tournament is typically counterbalanced
by reduced demand in other months and other sectors. Nor did the public investment in
stadiums and infrastructure for the occasion of the tournament necessarily imply an
expenditure boost: with limited public finances, any additional spending on stadiums
will be compensated for by reduced spending on other public purposes, if not immedi-

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ately, then over time as the governments intertemporal budget constraint comes into
play.
This explains the emphasis on international tourism in ex ante impact studies of the effect
of the 2010 FIFA World Cup. The event raised high expectations: 230 000 foreign tourists were predicted to stay for an average of 15 days (Grant Thornton, 2004), and this
number even increased to 380 000 overseas visitors (Grant Thornton, 2008). To estimate
the impact of the tournament it is important to distinguish between international tourists
and overseas tourists since differences are to be expected between the spending patterns
of tourists from other countries in Africa and those from Europe, Asia and the Americas.
The optimistic forecasts with respect to tourist inflows were well received on the basis of
the perceived effects of previous large sporting events hosted in South Africa in the low
tourist season months, including the rugby and cricket world cups (Spronk & Fourie,
2010). By contrast, early warnings (e.g. Du Plessis & Maennig, 2007; Allmers &
Maennig, 2009) from World Cup host nations such as France (1998) and Germany
(2006) and from European Cup organisers that the net increase in the number of tourists
that accompanies such events is typically small or even insignificant received no
attention in the optimistic ex ante impact studies (e.g. Grant Thornton, 2004, 2008).
The optimistic expectations were reflected in the considerable private sector
investment in the tourism sector in the years leading up to the tournament. Table 1
compares the number of hotel beds available in the various categories of hotels in
2007 and 2010.
While there was considerable expansion over this period, especially at the luxury end of
the market, it would not be appropriate to attribute this solely or even largely to the
approaching 2010 FIFA World Cup. Instead, rising demand had long necessitated investment in extra capacity. Nevertheless, the approaching 2010 FIFA World Cup affected the
timing of these projects, advancing their completion dates in anticipation of the tournament. Some of this investment was of doubtful long-term viability, and there was a risk
that some of the new hotels would fail when room occupancy and rates per room dropped
after the tournament (Cokayne, 2010).
The available hotel beds listed in Table 1 exclude the many guesthouses in the South
African tourism sector. Regrettably, there is no formal estimate of the number of these
establishments and their available beds. However, the Department of Tourism reported
that prior to the tournament approximately one third of the accommodation pre-booked
through FIFAs MATCH system was non-hotel accommodation (DoT, 2010). The role
of this system was a major concern for the owners of guesthouses. Even before the
Table 1: The supply of hotel beds in South Africa
Level

2007

2010

Av. growth p.a.

5 star

8 013

10 295

8.7

4 star

12 585

21 049

18.7

3 star
2 star

23 714
3 559

26 698
4 185

4
5.5

1 star

3 156

3 645

4.9

Total

51 027

65 872

8.9

Source: Pam Golding Tourism & Hospitality Consulting (Pam Golding, 2010).

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tournament, Darkey and Horn (2009) reported survey evidence of these owners
misgivings about the manner in which the FIFA and the LOC arranged accommodation,
and 60% of the long-term bed-and-breakfast proprietors expected the tournament to have
a negative impact on their business.
2.2 Divergent estimates of tourist arrivals
Official data on tourist arrivals for the months covered by the tournament have been
released by Statistics South Africa. The data are shown in Table 2 for June and July
2009, and for the same months in 2010, covering the tournament, which started on the
11 June 2010 and lasted until the final on 11 July 2010.
The data in Table 2 are intended to reflect only tourist arrivals. However, the ability to
assess the purpose of a visit is imperfect and especially in the case of arrivals from mainland Africa these data include very substantial numbers of migrant workers in addition to
tourists. For that reason StatsSA published a separate monthly total excluding arrivals
from Africa (as well as unspecified arrivals) a convention we have repeated in
Table 2. Since the data in Table 2 are shown per calendar month, the final two
columns create a tournament month from the 2009 and 2010 data, by adding the
number that arrived in June starting on the 10th to the number that arrived in July
until the 11th. According to StatsSAs data, 109 621 more overseas visitors arrived
in South Africa during the tournament month than during the comparable days of 2009.
A number of alternative and notably divergent estimates of tourist arrivals are available
(Lapper & Blitz, 2010). High forecasts were in the order of 350 000, such as the Grant
Thornton prediction of 373 000 made shortly before the tournament (Baumann, 2010;
Business Day, 2010). Some estimates even exceeded 500 000, such as the estimate

Table 2: Official tourist data for June and July 2009 and 2010: Number of visitors
and their countries of origin
June

July

June

July

Benchmark

Tournament

Region

2009

2009

2010

2010

month

month

Europe

72 144

91 904

123 702

98 113

80 707

117 282

North America
Central & South America

25 502
4 605

28 951
5 699

50 902
47 188

32 068
11 731

27 274
5 092

45 314
35 621

Australasia

7 813

9 464

18 450

8 911

8 567

15 462

Asia
Middle East

13 999
2 794

15 704
5 124

30 914
6 189

26 209
6 010

14 905
3 681

29 909
6 259

Africa

376 280

461 630

421 074

494 815

414 658

456 296

Unspecified
Total

2 294
505 431

4 938
623 414

22 892
721 311

2 557
680 414

3 282
558 165

16 169
722 311

Total ex-Africa and unspecified

126 857

156 846

277 345

183 042

140 226

Increment

249 847
109 621

The benchmark and tournament months were constructed to match the number of days the tournament lasted in
June and July 2010, assuming that tourists would have arrived no later than 10 June 2010 and counting arrivals
until 11 July 2010.
Source: StatsSA (2010).

FIFA World Cup high-frequency data economics

353

reportedly made by the LOC midway through the tournament (Naidu & Piliso, 2010).
Estimates at the lower end were close to 200 000 (Du Plessis & Venter, 2010). On a
regional level, a survey conducted by Cape Town Tourism indicated that occupancy
levels in the Cape Town Metropole for the first two weeks of the tournament averaged
34% in the first week of the 2010 FIFA World Cup and 40% in the second week, with
positive effects for accommodation in the neighbourhood of Green Point stadium.
However, establishments that were further afield were disappointed in the number of
reservations (personal communication, Mariette du Toit-Helmbold, 25 June 2010).

2.3 High-frequency data on tourist arrivals

This paper compares such numbers with evidence from two sources. We use data first on
actual arrivals at the international airports and second on occupancy rates in the hotels of
the major cities. To begin the analysis, we note that the number of international plane
landings did not increase substantially between June 2009 and June 2010. Daily data
on plane landings at the three South African international airports in Johannesburg
(where the vast majority of international flights arrive), Cape Town and Durban were
collected from the ACSA (Airports Company South Africa) website www.acsa.co.za/.
Baumann et al. (2009) used similar data in an earlier paper.
The average number of international arrivals per day for all three airports on the dates of
10 June (the day before the opening ceremony of the 2010 FIFA World Cup and the first
day with a visible increase in arrivals) and 11 July (the day of 2010 FIFA World Cup
final) increased to an average of 133 from an average of 125 international arrivals in
the time period from 22 April (first normal flight day after Easter) to 9 June: an
average addition of eight plane arrivals per day (+6%).
To calculate the transport capacities, the specific types of planes landing in South Africa
were taken from the ACSA daily observations and combined with the typical and
maximal seat capacities, taken from http://flug.airego.de/ (Aircraft Encyclopaedia
www.flugzeuginfo.net/).
Figure 1 shows an increase in the daily seat capacities during the 2010 FIFA World Cup
period of some 11%, compared to the time period from 22 April 2010 to 9 June 2010,
before the Cup. In this April June period, the daily capacity was at about 29 980
seats, whereas it increased to some 33 350 seats (+3370) per day in the period from
10 June 2010 (the day before the opening ceremony and the first day showing a significant increase) to 11 July (the day of the final). Assuming that the available capacity was
fully utilised, this implies a maximum increase in capacity of some 107 800 seats.
This modest estimate is consistent with those made by Cape Town Tourism indicating
that the number of international arrivals in Cape Town was 44% higher in June 2010
than in June 2009 (personal communication, Mariette du Toit-Helmbold, 25 June
2010). First, the base period is modest: the number of international tourists visiting
South Africa in 2009 was sharply down from previous years. Total quarterly arrivals
from the USA, Great Britain and Germany, which make up approximately 45% of
total air arrivals, reached more than 250 000 visitors during the high season
from 2004 until the summers of 2007 and 2008 before dropping (during the first
two quarters of 2009) to levels not seen since 2003. Second, Cape Town Tourisms
estimate of international arrivals seems to include tourists who initially landed in
Johannesburg.

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Figure 1: Seat capacity of international flights to South African international

airports, 1 April to 2 August 2010
We now turn to the second method of estimating additional tourism from the 2010 FIFA
World Cup, that using hotel occupancy rates. Table 3 shows the hotel occupancy rates for
the three major centres of Cape Town, Durban and Gauteng for each month of June since
2007 and includes a tournament (2010) and benchmark month (2009) calculation,
following the method used in Table 2. Figure 2 shows the same data, but in terms of
the daily frequency for June and July 2010.
The data in Figure 2 should be read alongside the information on capacity expansion in
Table 1, which indicates that growth especially occurred in high-end accommodation.
Figure 2 shows the extent to which 2010 FIFA World Cup visitors used Gauteng as
their base for the tournament because of the number of stadiums in close proximity
and the easy access by road and air to more distant stadiums. The tournament month
is a useful abstraction for the purposes of identifying those tourists who arrived for
the FIFA World Cup. The daily hotel occupancy data for Gauteng showed an increase
over the comparable day in 2009 only from 10 June onwards. In Cape Town the
difference only emerges from 11 June onwards. The Gauteng hotels were fully booked
on the day of the finals, but within two days had returned to the level of 2009. As
mentioned above, the data on seat capacity for international flights support the same
abstraction.
Table 3: Hotel occupancy rates in the major cities and regions
Cape Town

Durban

Gauteng

June 2006

52.5

79.6

68.2

June 2007
June 2008

55
48.1

74.2
74.6

73.1
72.5

June 2009

49.5

67.3

54.9

June 2010
Benchmark month

51.7
45.7

61.8
70.9

77.3
53.9

Tournament month

64.1

60

85

The benchmark and tournament months were calculated as in Table 2.

Data source: STR Global.

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355

Figure 2: Hotel occupancy rates (as a percentage) in the major cities for June/July
2010
Note: Daily data for July 2010 not available for Durban.
Data source: STR Global.
Combining the occupancy rates for the tournament and benchmark months with the
number of available hotel rooms in the major cities gives a figure of 11 684 additional
hotel rooms occupied on an average day during the tournament (and an additional
5842 occupied guest house rooms). To complete the calculation we need an assumption
about the average duration of stay for international visitors. We base our assumption on
survey data from the 2006 FIFA World Cup in Germany, showing that European visitors
stayed on average six days while other overseas international guests stayed 11.4 days on
average. For the South African tournament we assume that African visitors stayed on
average for six days, other overseas visitors 11.4 days, and that South African visitors
who stayed in hotels did so for two nights on average. Finally, we assume that 80% of
the rooms were occupied by two persons and the remainder by single occupants. With
these data and assumptions the estimated number of additional overseas arrivals is
65 000, with another 26 000 African arrivals and 72 000 South African tourists.
2.4 Explanations for the lower than expected turnout
A number of factors are likely to have played a role in the disappointingly small tourism
impact of the 2010 FIFA World Cup. The first is the international recession. Our data on
arrivals compare the 2010 FIFA World Cup period to the days before and after the event,
which were affected by the crisis in the same manner. Without the crisis, the numbers of
tourists both before, during and after the event could have been substantially larger. The
effect of the recession may have been accentuated by South Africas geographic location,
being a long-haul (and therefore higher cost) destination for Europeans, Asians and
Americans.
The scholarly literature lists other potential reasons for major sporting events having only
a limited impact on tourism (e.g. Coates & Humphreys, 2000; Baade & Matheson, 2004;

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Du Plessis & Maennig, 2009; Allmers & Maennig, 2009): One important reason is the
crowding-out of normal tourists due to the noise, traffic jams and other disturbances.
In the South African case, there was considerable crowding-out in the hunting sector,
a market whose peak season is typically June (The Star, 2010), because overseas
hunters found that flights to South Africa were now more expensive and some were
fully booked, and that transport facilities were now catering for the tournament and
were thus very expensive to divert to the game lodges.
Two other reasons may apply in the special case of South Africa. First, the international
perception of the country as a dangerous location may have had a higher than expected
negative effect on the expected increase in tourist arrivals. Second, price crowding-out is
sometimes mentioned in the scholarly literature but rarely supported with data. In the
case of South Africa, a special form of price crowding-out may have been at work:
self-defeating expectations, i.e. the adverse impact on actual arrivals of exaggerated
price rises in the tourist sector, where these price rises were based on the ex ante anticipation of massive tourist arrivals.
Figures 3a and 3b show the seven-day moving averages (to adjust for systematic weekly
fluctuations) of prices for flights from Frankfurt, London, Madrid, Paris and Rome to
Johannesburg on fixed days during, before and after the 2010 FIFA World Cup. These
airports are the international hubs of the nations that were expected to have the most
influential soccer teams in the tournament.
The cheapest prices of such flights were collected on a daily basis beginning on 15
December 2009 via the publicly available internet portal www.billigflieger.de/, a
German online booking site. In the case of the flight connection between Frankfurt
and Johannesburg on 9 May 2010 (a date well before the 2010 FIFA World Cup) the
supply price between 15 December 2009 and 8 May 2010 varied by approximately
E350 for most of the observation period and by approximately E480 in the period
from the middle of March 2010 to the beginning of April 2010, with an average variation
of E387.2. For the same flight on 9 June 2010, prices were over E900 during the period
between end of January and the end of March. From that time forwards, there was a
downward correction in flight prices, possibly due to a combination of an intervention
by South Africas Competition Commission and the airlines realisation that they
would not be able to reach sufficient bookings for their flights at the inflated fares.
However, even after this correction prices for flights were consistently at least 50%
higher than in the non-World Cup periods.
Flight prices for the other connections between the major European airports and Johannesburg had similar developments to the one describe for Frankfurt. We restrict ourselves
to providing an additional Figure 3b for London.1 The price crowding-out effect
indicated by these figures may have been biased downwards because our statistics
exclusively use the cheapest flights and do not control for the number of seats available
for this price.
An additional factor that could have constrained demand was the relatively high local
tourist sector prices (in dollar terms). To illustrate this factor, Figure 4 shows the
Econex/Portfolio real price index in rand and dollar terms. Rand appreciation over
recent years also led to higher dollar prices for international tourists.

However, European data are available from the authors on request.

FIFA World Cup high-frequency data economics

357

Figure 3: (a) Prices for Frankfurt Johannesburg flight connections for flight dates
9 May, 9 June and 9 July. Seven-day moving average of the cheapest prices between
15 December, 2009 and 3 August, 2010. (b) Prices for London Johannesburg flight
connections for flight dates 9 May, 9 June, 9 July and 9 August. Seven-day moving
average of the cheapest prices between 15 December, 2009 and 3 August, 2010

Figure 4: Rand and US dollar tourist sector price index

Source: Econex.

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Table 4:

Average room rates per day rand constant 2006 prices

Cape Town

Durban

Gauteng

June 2006

649

549

544

June 2007
June 2008

724
805

626
733

670
810

June 2009

909

832

959

June 2010
Benchmark month

1983
1275

1429
827

2182
1461

Tournament month

2670

1254

3075

The benchmark and tournament months were calculated as in Table 2.

Data source: STR Global.

Further, higher than normal hotel prices may have affected the number of tourists visiting
for the 2010 FIFA World Cup. As with the 2006 FIFA World Cup, there is clear evidence
that the inflexibility of the tournament schedule improved the pricing power (in local currency) of hotels more than is usual for the season, and that improvement is reflected in the
average room rates (in rand, adjusted for inflation) reported in Table 4.
Although the hotel prices reported above were the actual prices, the decision to visit
South Africa was made weeks and months ahead of time based on prices quoted at
that time. We recorded the lowest quoted prices for hotel rooms collected on a daily
basis since 30 April 2010 via the publicly available internet portal www.hrs.de (the
data from this site are similar to those obtainable from www.hotels.com). Figure 5
shows that the lowest prices for accommodation in Johannesburg for 9 May and 9
August (both dates near to but outside of the 2010 FIFA World Cup period) were
more or less constantly between E45 and E50 per night over the entire data period.
By contrast, during the World Cup period it was not possible to book accommodation
for less than E120 per night at any point after late April. Advertisements for the cheapest
accommodation increased to approximately E700 for the night of 25 June if booked one
month in advance. Accommodation suppliers then obviously realised that they would not
find sufficient bookings at such a high price and reduced supply prices, but subsequently
it was still not possible to book accommodation for 25 June for less than approximately
E260. Similar observations are available for the other 2010 FIFA World Cup cities. The
same applies to the price quotations for car rentals.2
Air carriers, car rental agents and hoteliers enjoyed an enhanced price environment
during the 2010 FIFA World Cup, with rates doubling and tripling. Restaurants are
also likely to have profited handsomely, though we have no data to confirm this.
The negligible increase in the capacities of air carriers in combination with the sharp
price increases depicts an inelastic supply and high windfall profits for the sector. It
remains unclear, however, whether the modest supply reaction by airlines was due to
(i) internal information that, on the basis of their pricing strategies, no additional
supply would be needed or (ii) that the inherent logistical costs of changing the flight
schedules would have been too high to increase supply (personal communication,
Joachim Hunold, CEO, Air Berlin, 29 July 2010).
2

Details available from the authors on request.

FIFA World Cup high-frequency data economics

359

Figure 5: Prices for hotel accommodation in Johannesburg for the dates 9 May, 12
June, 25 June, 11 July and 9 August. Seven-day moving average of the cheapest
prices between 30 April, 2010 and 3 August, 2010, in euros

The economy of a host nation may well experience increased income from such price
effects, that is, higher prices may be accompanied by higher salaries. But slack labour
market conditions made it unlikely that labour would benefit greatly. Indeed, non-agricultural wages in South Africa increased on average by only 1.4% during the second
quarter of 2010, compared with an average quarterly increase of 3.4% over the preceding
four quarters, using seasonally adjusted data from the South African Reserve Banks
quarterly bulletin.
In the case of airfares, most of the profit (with the exception of South African Airways
flights) clearly went abroad. In the case of the hotel industry, no data on the capital shares
of foreign investors are available, but at least in the case of the international hotel chains
a high proportion of the profit did not stay in South Africa (Matheson, 2009).
The modest and sector specific economic benefits mentioned above are especially
frustrating given the urgent need for poverty alleviation in a society with deep
inequalities and widespread underdevelopment (see Van der Berg, 2010, for a description of these socioeconomic challenges). Against this background, winning the bid to
host the tournament raised expectations of a significant impact on poverty and inequality.
So optimistic were these expectations that Czegledy (2009) identifies indications of
millenarianism.
Pillay and Bass (2009), among others, also cautioned against raising expectations and
articulating the expected benefits of the tournament exclusively in pro-poor terms. Cornelissen (2009) added the concern that the legacy of the tournament would reinforce
existing spatial inequalities. But these words of caution did not resonate widely, and
the result was frustration with the ultimately modest impact on poverty and inequality
in South Africa.

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In summary, according to our data on additional international plane landings, we do not

see any evidence for a net increase in World Cup related overseas tourism beyond
approximately 90 000 to 118 000 persons. This range is consistent with StatsSAs estimated increment of 109 600 for the tournament month shown in Table 2. Even in 2010
FIFA World Cup cities, occupancy rates were far from 100% during the event period,
implying that the South African economy could not make full use of its resources.
Additionally, even this modest positive effect in June and July does not prove that the
tournament had a positive tourism effect because time-switcher effects have to be considered. In the cases of the 2004 European Cup in Portugal and the 2006 FIFA World Cup
in Germany, increased numbers of international tourist in the event months of June and
July were partly or fully offset by lower numbers in other months. It is conceivable that
tourists who would otherwise have travelled to the host nations during May or August
transferred their stay in a utility-maximising way to the FIFA World Cup months
(Allmers & Maennig, 2009).
Our results confirm previous studies on the effects of sport mega-events which, almost
without exception, find that the ex post measurable sport events effects are significantly
below the effects claimed ex ante by their organisers and sponsors, and that these events
generate scarcely any significant tourism, income or employment impact (e.g. Baumann
et al., 2009, and the literature cited therein).
However, our results go a step further. They make it clear that the overly optimistic forecasts themselves may have contributed to the smaller than expected tourism effect. The
over-confident expectations of the tourism industry, as reflected in its pricing behaviour,
were self-defeating because they dampened the enthusiasm of potential visitors and thus
also the potential increase in the number who visited South Africa for the Cup.

3. Other short-term economic effects and potential long-term effects

A feel-good effect might be the most evident positive outcome of a sport mega-event.
Nevertheless, only a few studies attempt to evaluate this phenomenon of benefiting
from an event without active attendance at the stadium, and they do so using the
concept of willingness to pay. Before the 2006 FIFA World Cup, only one out of five
Germans surveyed revealed a willingness to pay (WTP) greater than zero for the
2006 FIFA World Cup to take place in Germany (Heyne et al., 2010). On average, the
WTP was E4.26 per person which, with 82 million inhabitants, corresponds to approximately E351.5 million. After the 2006 FIFA World Cup, the proportion with a positive
WTP had increased to 42.6% and the average was E10.0, amounting to E830.8 million
for the whole country. It follows that this feel-good effect was one of the largest effects of
the World Cup.
While the feel-good effect refers most obviously to the impact on locals, there is a related
potential impact on foreigners due to an improved international perception of the host
country (Du Plessis & Maennig, 2007). There is at least preliminary evidence for such
awareness effects arising from South Africas 2010 tournament. Figure 6 uses the
number of Google hits as a proxy for awareness and plots the index of the number of
Google hits for the search words South Africa, Germany, Namibia and World
Cup 2010 for each day from 19 April 2010 to 3 August 2010. The data are a visual representation of the rising international awareness of South Africa, showing an increase of
approximately 60% during the 2010 FIFA World Cup period compared with April 2010.

FIFA World Cup high-frequency data economics

361

Figure 6: Index of the number of Google hits from 19 April 2010 to 3 August 2010
The same measure of awareness for Germany, possibly due to its national team performance, increased by up to approximately 40%, whereas for Namibia it did not increase by
more than 20% for any day in the observation period. The biggest increase in awareness
was for the 2010 FIFA World Cup tournament itself, which might suggest that only part
of the awareness of major events is directed towards the host country.
Google hits are a supply-side indicator, however, because Google records the number of
webpages relevant to a given keyword. From a media economics perspective, the
demand side is also interesting.
As a proxy, we counted the number of members of the Facebook groups South Africa
2010, My South Africa, Namibia and Super Bowl. Figure 7 plots the index of the
number of members of these Facebook groups for each day from 19 April 2010 to 3
August 2010 and shows that the number of members of My South Africa increased
by approximately 20%, well above the near-to-zero increase of the Facebook group
Super Bowl. It must be mentioned, however, that the number of members of the
group Namibia increased by nearly the same amount. In addition, the number of

Figure 7: Index of the number of members in Facebook groups from 19 April 2010
to 3 August 2010

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S du Plessis & W Maennig

members in the group South Africa 2010 increased by more than 170%, again relativising the awareness effect for the host country.
Besides awareness, another positive effect on the host countrys sporting environment
may apply in the long run: the positive effect of the new stadiums on spectator
demand. In Germany, the novelty effect of all stadium projects since 1963 was equivalent to a rise in spectator numbers of approximately 10% per match (Feddersen et al.,
2006). In addition, the average revenue per ticket increased due to the expansion of
the area for VIP and business seating, so the overall ticket proceeds may also increase.
These increased receipts improve the ability of a club to acquire top players in the international market, which, in the medium term, leads to increased national and international
competitiveness. The general impact of stadiums on urban development is studied by
Ahlfeldt and Maennig (2010b), and for the measurement of the external effects of
stadiums see Tu (2005) and Ahlfeldt & Maennig (2009, 2010a). For a discussion of
the potential effects of South African stadiums, see Du Plessis & Maennig (2009),
Maennig & Du Plessis (2009) and Maennig & Schwarthoff (2010, 2011).
New iconic stadiums such as those in Cape Town, Durban, Port Elizabeth and Johannesburg may also play a role in long-term urban development. There is no standard
definition of iconic buildings, but there are plenty of existing examples, such as the
Sydney Opera House, which is inseparable from the worldwide image of that city, and
the Guggenheim Museum in Bilbao, which has converted that previously neglected
city into one of the five most visited cities in Spain. It is currently open to debate
whether stadiums in general and the South African stadiums in particular fulfil the
requirements for such positive external effects.

4. Conclusion
The central theme of this paper is the claim that the economic impact of international
tourist arrivals during a FIFA World Cup such as the 2010 tournament in South Africa
will be considerably smaller, at least in the short term, than was widely expected prior
to the event. This phenomenon is not unique to South Africa but is the general result
of most ex post analyses of FIFA World Cups. The focus of this paper was on accurately
estimating tourist arrivals during the 2010 FIFA World Cup because the immediate economic impact must derive from these arrivals. We found a modest number of arrivals a
net increase in tourists of some 90 000 to 108 000 persons, which was much lower than
optimistic expectations which would have constrained the impact on local income and
employment. This result is consistent with Du Plessis and Venters (2010) estimated
tourist arrivals, which they used to calculate that the likely short-term impact of the
tournament was 0.1% of GDP.
It seems plausible that higher supply prices, in anticipation of very high demand during
the event, contributed to the modest number via a crowding-out effect. Prices for flights
to South Africa during the 2010 FIFA World Cup period were three times higher than
normal for bookings made between the end of January and the end of March 2010.
Although these prices dropped closer to the tournament, they remained at least 50%
higher than normal. A similar observation can be made for hotel prices and for price
quotations for car rentals. Partly because of South Africas elastic labour supply and
the near-zero capacity effects of the 2010 FIFA World Cup, the price increases
translated less into higher salaries than into higher profits for capital owners and
foreign investors.

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363

Overly optimistic forecasts by ex ante impact studies of approximately 400 000 overseas
visitors may have induced this pricing behaviour that damped down the potential
increase in the number of tourists. This is not an argument against the appropriate use
of ex ante impact studies. On the contrary, ex ante quantitative forecasts or measurements play an important role in sport event economics as in other economic areas. But
it is a warning that ex ante economic impact studies with overly optimistic claims
may induce self-defeating expectations. At present, it is not possible to determine the
likelihood of positive medium- or long-term effects of the 2010 FIFA World Cup; on
the basis of empirical studies of comparable sporting events, it appears that such
effects cannot be guaranteed (e.g. Hotchkiss et al., 2003; Jasmand & Maennig, 2007;
Hagn & Maennig, 2008).
Although the core criteria of economic performance (such as income and employment)
are usually the focus of impact studies, modern economics recognises other effects as
well, such as awareness and image effects. Our study indicated a rising awareness of
South Africa that may well be one of the largest short-term economic effects of the tournament. There is widespread agreement that the 2010 FIFA World Cup was successfully
hosted by friendly, relaxed and committed South Africans. The country takes pride in
having passed such an important test under the scrutiny of the world (Schifferle,
2010). The positive media coverage and visual documentation of an incident-free
2010 FIFA World Cup has given South Africa a chance to reintroduce itself to the
rest of the world. The depressing stories about crime, racial tension, HIV and power
shortages have been displaced by a host of positive new images. This could translate
into increased tourism and increased trade and attract foreign direct investors.
A channel by which the tournament could raise the long-term growth of the South
African economy is through the impact on local self-confidence. This new self-confidence is manifested in sporting affairs, as the revived plans to host the Olympic
Games may indicate. Beyond this, a poll conducted among 400 South Africans shows
that 85% of South Africans now have more hope for a positive future for all South Africans than they did before the tournament (Rasmussen, 2010). While the authors have
little doubt about the potential for long-term positive economic effects, it is too early
to find supporting statistical evidence. If our expectations also prove to be overly optimistic, then South African Minister of Sport Mankenkhesi Stofile may have been
correct when he said in 2007 that The memory of that tournament will be a lasting
legacy; in other words, we will have to look to less tangible benefits of such events
rather than hope for substantial economic enrichment.
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