Will SA - and particularly its tourism sector - really benefit from hosting the 2010 soccer World Cup?

Global competition for hosting sporting competitions, conferences and other mega events has soared on the promise of financial return.

In just 15 years SA, which is considered a long-haul destination by developed countries, has hosted the 1995 rugby World Cup, the Africa Cup of Nations, the UN World Conference on Racism, the World Summit on Sustainable Development and the cricket World Cup.

Preparation for FIFA's soccer spectacle, however, has rivalled all these events. Local investment in infrastructure escalated dramatically, and the host cities, particularly Johannesburg, still partly resemble construction sites.

The allure of huge foreign-exchange inflows, job creation, a boost to tourism, infrastructure and even urban regeneration make hosting such events attractive propositions.

Positive spin-offs not guaranteed

But positive spin-offs are not guaranteed.

Given SA's staggering investment in the World Cup, the findings of a UN World Tourism Conference hosted by SA last week are sobering.

The cost implications for national budgets, social and environment effects and branding disasters can reduce the benefits, experts warn.

Greg Clark, local economic & employment development chairman for the Organisation for Economic Co-Operation & Development, says cities should be more strategic about choosing to bid for "the right" event.

The deciding factor, he says, is whether preparing for the event will enhance and accelerate a city's existing economic development plans, or achieve a completely different set of outcomes.

Careful risk management should be included in a strategy.

Make or break SA's reputation

"Reputational risks, which could be affected by security, ticketing and other service provision, could have the biggest effect," says Ian Goldin, director of the James Martin 21st Century School at Oxford University.

Getting these basics right could make or break SA's reputation in tourist markets. The 1976 Montreal Olympic Games were a disaster for the Canadian city, and are a good example of how not to do it, says Goldin. Montreal's citizens were against the bid to host the games, and costs spiralled so high that the city was left with a 30-year debt.

The blow to its image affected tourism for years afterwards - a long and painful legacy of the games.

Preparations for last month's Winter Olympics in Vancouver focused on improving public transport and sporting venues. However, a participant died during the games, and the city is not sure when it will recover from the high cost of hosting them.

SA suffered reputational damage

Sydney's Olympic Games in 2000 yielded good follow-on tourism, investment in Australia and real economic benefits. But the games were not an accidental success, says the head of tourism at Australia's resources, energy & tourism department, Jane Madden.

Careful consideration of the costs and benefits was undertaken. Elaborate strategic marketing plans were drawn up.

Crucially, Madden says, the plans were aligned with the Australian government's existing policy and strategic framework. This included a vehicle, Business Club Australia, which used sport as a business connector: the games were used as a platform for forging trade and investment relationships with other countries.

It may be too early to assess SA's handling of the soccer World Cup, but the country has already suffered reputational damage.

Push down number of foreign tourists

Regardless of their validity, concerns about security, hefty increases in hotel room rates, the state of readiness of stadiums and the absence of public transport have captured the attention of the foreign media.

Tourism operators say this negativity, coupled with the strong rand, will push down the number of foreign tourists expected to travel to SA in June and July.

However, addressing the UN conference in Sandton last week, President Jacob Zuma insisted that SA had a vision for the World Cup.

"We realise that we are not only working towards 30 days of football. We are building our country." Building new infrastructure would take SA into the future, Zuma said.

This vision has to extend beyond the event. Key to achieving this, says Goldin, is ensuring that the time and energy spent on hosting the event itself is not at the expense of its legacy and impact.

Unlike public health risks like swine flu, these are risks that can be managed.

Financial Mail