The bid made some bold claims for the economic impact of hosting this tournament. There will be 445,000 visitors attending the tournament; their direct spend will be €800m. That amounts to just under €1,800 per visitor. Note that this is an average amount. Is this realistic?
The bid claims that the tournament will generate €1.5bn for the Irish economy. These are impressive numbers and it would be interesting to see the assumptions on which they are based, especially since Irish citizens have underwritten this bid.
Unfortunately, that’s not possible, so we will just have to take the IRFU’s and the Government’s word that the numbers stack up.
Of course, Ireland’s rivals for the tournament — France and South Africa — are just as dramatic in their claims for the benefits of hosting the World Cup for their economies. If anything is clear in this bidding war, it is that little is ever learned about the economics of bidding for and hosting major sporting tournaments.
World Rugby is guaranteed its fee of €120m, which is unsurprising since it has the monopoly power to award the tournament to the country it prefers. So, does hosting the tournament make sense for Ireland?
There are two critical planks to the Irish bid to host the World Cup in 2023.
The first is the economic return it will supposedly generate and the second is the legacy it will leave after the tournament ends.
The economic return is based largely on attracting foreign rugby supporters and getting them to part with their cash when they’re here. How many will come and how much they spend is very difficult to estimate. However, it is important to be cautious about this, and also more important to take account of the displacement effect on existing tourism.
During the London Olympics in 2012, international tourism numbers declined by 5% as regular tourists decided to avoid the high prices and disruption associated with the games.
It is likely that Ireland will experience a similar effect during the Rugby World Cup in 2023, which is spread throughout the country. Tourists may decide to give Ireland a skip rather than compete with rugby fans for scarce beds and restaurant tables. We don’t know if the 445,000 visitors claimed for the World Cup accounts for this displacement. If it is a net increase then we really would need to look at how the figures were calculated.
The hope is that rugby fans will spend more than regular tourists to offset the displacement effect, but the evidence for this hasn’t been presented.
The second issue on legacy points to the infrastructure, largely sporting, that will remain after the tournament ends. The new Páirc Uí Chaoimh in Cork has been developed partly to enable it to host a Rugby World Cup pool game. Other stadiums, including GAA ones, will be similarly redeveloped. This is not a credible legacy.
Ireland already has, by far, the most stadiums per capita in Europe. Ireland has one 25,000 capacity stadium for every 310,000 people. In England it is one for every 1.3m and in France one for every 3.5m. This is because of the popularity of gaelic games.
It means Ireland doesn’t need any more stadium development. These points don’t mean we shouldn’t host the Rugby World Cup. The least we, as citizens underwriting this bid, should insist on is honesty in the claims being made.
The tournament is unlikely to generate the economic benefits claimed. The legacy infrastructural benefits are minor.
Perhaps it is time to come clean with ourselves and acknowledge that a world cup in Ireland in not about long-term economic gains but short-term happiness.
Perhaps this should be seen as a consumption decision, not an investment decision. Irish people will enjoy a few weeks of top class sport and craic, and will feel good about ourselves for successfully hosting a major sports tournament.
Maybe that’s enough.
- Dr Declan Jordan is a senior lecturer in economics at Cork University Business School