Guess Which One is the Minister of Tourism

Here’s something that shouldn’t surprise you: Tourism is up in South Africa.

“‘The country recorded 1.02 million foreign visitors during June 1 to July 1, up from 819,495 a year earlier, the [South African home affairs] department said. ‘This figure is expected to rise further as the FIFA World Cup enters the semi-finals and the final phases of the tournament.’”

That represents a 25% increase year-over-year.

We’re not sure we can agree with the assessment from the unnamed official behind that quote though. There are only four teams left. And the stadia to be hosting the last four matches are finite in size. So why would they expect another wave of visitors? Having 31 foreign nationalities following teams around your country to play three games each would, on the surface, seem to be a bigger tourist draw than four teams playing twice, especially considering some people in that latter group are people who have already been counted in the June numbers.

Also, when compared with the jump in tourism in the previous quarter, the 25% increase looks appallingly modest. South Africa attracted close to 2 million visitors from January to March of this year (the country’s prime tourist season). That’s a 21% jump over same period from the previous year.

Some of that can be attributed to a $100M marketing campaign the country ran ahead of the World Cup. But the fact that tourism across the board is up makes a little harder to isolate the additional marginal increase from just the World Cup.

Remember that the pre-tournament projections for total visitors were adjusted down. If you take the previous year as the baseline (and this is admittedly way imperfect but probably gets you in the ballpark) then the World Cup attracted just under 200,000 additional tourists, That falls well short of the 450,000 initially projected, as well as the 350,000 revised-down projection. When you consider that South Africa spent $4.6 billion on hosting the tournament, that leaves a huge gap between the costs and the immediate economic benefit.

Accordingly, South Africa is taking a long term view of the benefits then. From a statement yesterday by Tourism Minister Marthinus van Schalkwyk: “The overwhelming positive international coverage has surpassed even our most optimistic expectations. The goodwill that has been unlocked cannot be measured in monetary terms.”

Actually, it probably can. That is what economists do, right? Try to quantify things that aren’t easily calculated to measure their economic impact? So, it’s putting a good spin on the numbers—and let’s not discount it totally as there will definitely be long-term positive impact to South Africa for hosting a largely successful tournament (i.e. free of major incidents off the pitch)—but it’s almost tantamount to admitting that the real, immediate, and quantifiable monetary income falls well short of what everyone was hoping for.

If you check out Soccernomics (and yes, we’ve been alluding to that an awful lot over the past couple of months with an almost fanatical reverence because it is just so spot on with so much of analysis), hosting a World Cup simply doesn’t have the positive economic impact that proponents often claim it does. But what it does do is make the people of the host country “happy” (and we’ll avoid a detailed conversation of how that is measured here). To that point, “Archbishop Desmond Tutu has compared [hosting the World Cup] to the euphoria experienced at the fall of apartheid in 1994.”

That’s gotta be worth something. But whether it’s worth the billions spent in a country with so many other social priorities is the lasting question from this World Cup. That and whether FIFA can be dragged out of the cenozoic era with its views on technology.