As the global recession forces SA to brace for a tougher year ahead, there is a light glimmering on the horizon — the 2010 Soccer World Cup.

The event is expected to draw nearly half a million foreign tourists into the country, 4.1 percent more than the number that would otherwise come. The estimated R8.5bn they will spend is 14 percent more than would otherwise be the case, according to a study released on Friday by UK accounting firm Grant Thornton.

Overall, the World Cup will inject R55.7bn into gross domestic product (GDP) in 2010, helping growth to rebound after an expected slump next year.

"The real win will be the ongoing growth in tourism," said Gillian Saunders, a principal at Grant Thornton International.

Tourism is one of SA's fastest- growing sectors, accounting for eight percent of GDP and providing fertile ground for job growth.

Saunders says the event will create 415 400 new jobs, up from an estimate of 381 327 last year. It will also generate a further R19.39bn in tax revenues.

Six weeks of hectic activity

There would be six weeks of hectic activity, as the soccer teams would be arriving in SA two weeks before the month of matches begins. "Transport infrastructure will be our biggest challenge."

Spending on infrastructure for the event is seen at R17.4bn, excluding that on high-speed Gautrain rail network.

Despite SA's reputation for violent crime, the number of overseas visitors — those from outside Africa — have continued to climb steadily, rising 5.4 percent so far this year, according to government agency Statistics SA.

Some economists think that if the global downturn is as bad as feared, there will be fewer tourists coming to the World Cup. Saunders said this was unlikely, given the nature of the event and its supporters. ETM economist George Glynos shared that view.

"Of course the global recession will deter some would-be visitors, but if we have a structurally weaker currency SA will look like a very attractive holiday destination," he said last week.

A destination event

"It is a destination event, one of the world's biggest sporting events with a large amount of interest — it won't dry up just because of the credit crunch."

Glynos believes that the spin off effects of the event will contribute significantly — between one and 1.5 percentage points — to GDP growth during the year, which he sees at 4.1 percent.

Saunders thinks that the event will boost the value of GDP by at least two percentage points in 2010. But the real benefit will come from the boost to tourism from overseas visitors in the years afterwards, she says.

This is based on what has happened in other countries who have hosted the World Cup in the past.

She sees a 60 percent rise on business and event-related tourism in 2015, compared with 2005.

Business Day


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