Popular sports events like World Cups and Olympics can actually give a significant boost to the economy. Even though these events involve large investments on things such as venues and infrastructure, many countries worldwide compete to win hosting rights of major sporting events. These events bring significant economic, reputational and social benefits for the hosting country.
The hotel industry of the country is the first to benefit from the hosting of any big event. The hotels witness an increase in business due to influx of players, celebrities and spectators from all over the globe. In order to make the best of this opportunity, the hotels even hike the prices of rooms and all associated services. This is the reason why sports events are usually organized in the tourist attracting destinations to lure the visitors for extended stays.
Even a daylong event at a popular destination can encourage extended stays adding to the profits of the hotel industry. For instance, the sporting events such as the FIFA Confederations Cup and the Lions Rugby Tour in 2009 in South Africa helped the country to get out of the recession and boosted the tourism industry, which had suffered massively due to appreciating rand, which was inflating the expenses of the tourists.
Apart from hotels, other local entertainment businesses like gentlemen clubs and strip clubs also prepare to entertain the guests from other countries. These clubs usually get almost negligible media attention, but when a major sports event is held, these practically become hospitality businesses catering to a large number of male tourists. These clubs besides providing for adult entertainment, offers a combination of great food, drinks and fun.
The reach of a sports event goes much beyond the stadium where it is held. Loads of people spend time in sports bars and pubs and shell out more money than they normally would to maximize the fun of watching a match. All major bars and hang out joints put up large displays especially for showing live events.
Sports events do not just bring along short term benefits, but also many long term economic benefits for the host country. The country usually sees large inflows of money during the event. These events also have a positive impact on job creation and infrastructure development. However, before committing to large investments, host countries should carefully weigh the advantages of the sporting event. Economic impact studies should be carried out to confirm the long term benefit and economic feasibility of the event.