Wel­come to Rus­sia

Host looks for World Cup to score eco­nomic goals

Global Times - Weekend - - SPORTS -

De­spite sell­ing mugs and or­na­ments at Moscow’s top sou­venir mar­ket, Alexan­der does not ex­pect a huge boost when hordes of flush fans de­scend on Rus­sia this sum­mer for the World Cup.

“You would think that the World Cup would be great for sell­ing sou­venirs, but not for us,” said Alexan­der, a vic­tim of pre-emp­tive an­titer­ror mea­sures that will shut most of Iz­mailovsky and other out­door mar­kets.

His case begs the ques­tion, “what will be the eco­nomic im­pact of the World Cup re­ally be for Rus­sia?”

An in­flux of hun­dreds of thou­sands of soc­cer fans will set cash reg­is­ters ring­ing, but will it pro­vide a last­ing boost to Rus­sia’s lack­lus­ter econ­omy?

A study con­ducted by the McKin­sey con­sul­tancy for the lo­cal or­ga­niz­ing com­mit­tee es­ti­mated “the com­bined im­pact of the 2018 World Cup on the GDP of Rus­sia will be around $15 bil­lion, which ex­ceeds the im­pact of sim­i­lar cham­pi­onships in Brazil, South Africa, Ger­many and South Korea, and is sec­ond only to the re­sult of Ja­pan.”

While that sounds big, it is mostly in­vest­ment in sta­di­ums and trans­port in­fra­struc­ture, and when bro­ken down over the six years that prepa­ra­tions have been un­der­way, the im­pact is less than 0.2 per­cent of Rus­sia’s an­nual out­put.

Those in­vest­ments didn’t help Rus­sia avoid a re­ces­sion in 2015 and 2016 and over­all growth is only ex­pected to reach 1.5 to 2.0 per­cent in the com­ing years.

No mean­ing­ful im­pact

“The games will last just one month and the as­so­ci­ated eco­nomic stim­u­lus will pale in com­par­i­son to the size of Rus­sia’s $1.3 tril­lion econ­omy,” said Kristin Lin­dow, a se­nior vice pres­i­dent and an­a­lyst at Moody’s rat­ing agency.

“We do not ex­pect the World Cup to make a mean­ing­ful con­tri­bu­tion to broader eco­nomic growth.”

How­ever the McKin­sey study fore­casts the eco­nomic im­pact from the games to in­crease by up to a third over the next five years, pri­mar­ily due to a boost in tourism.

“Over­all, in my opin­ion the World Cup will in­crease tourism to Moscow by 10 per­cent,” Moscow Mayor Sergei Sobyanin said in a recent in­ter­view on RBK tele­vi­sion.

He es­ti­mated this lift would in turn boost the city’s an­nual tax rev­enue by nearly a quar­ter of a bil­lion dol­lars.

But Igor Niko­layev, di­rec­tor at the FBK Strate­gic Anal­y­sis In­sti­tute in Moscow, said he was skep­ti­cal of such fore­casts.

“Hold­ing the World Cup is no guar­an­tee that a con­sid­er­ably larger num­ber of tourists will come,” he told AFP.

He pointed to Rus­sia’s ex­pe­ri­ence with the Sochi 2014 Win­ter Olympics, when the num­ber of for­eign tourists rose by nearly 1.5 mil­lion the fol­low­ing year, a mod­est 4 per­cent in­crease, only to tum­ble by over 9 mil­lion in 2016, ac­cord­ing to UN fig­ures.

And the spike in in­ter­na­tional ten­sions – Western sanc­tions over Rus­sia’s an­nex­a­tion of Crimea and a sep­a­ratist con­flict in east­ern Ukraine – that dam­aged Rus­sia’s pull as a tourist des­ti­na­tion isn’t likely to go away any­time soon.

Prices boom

Nev­er­the­less or­ga­niz­ers re­cently said they ex­pected at least 600,000 in­ter­na­tional vis­i­tors to the World Cup.

And even if it is closer to the 1 mil­lion the state tourism agency is fore­cast­ing, that is no flood when con­sid­ered against the rel­a­tively low 24.6 mil­lion vis­i­tors Rus­sia re­ceived in 2016.

And it is less than the 1 1.6 6 mil­lion boost Rus­sia re­ceived in 2014 for the Sochi Win­ter Olympic Games.

But with nearly 700,000 Rus­sians also ex­pected to at­tend matches, ho­tels and res­tau­rants in game cities are likely to see plenty of busi­ness.

The Didu restau­rant on Moscow’s cen­tral Myas­nit­skaya street has crafted a soc­cer goal over its en­trance with a mas­sive ball bounc­ing on top to at­tract soc­cer fans.

“We’re wel­com­ing for­eign guests,” said man­ager Maxim Zakharov. “We’ve set up the goal, hung up flags, put up a huge plasma TV… but we haven’t raised prices.” Tour guides will also be busy. “We ex­pect we will set a record this year thanks to the World Cup,” said Vy­ach­eslav Kholopov at Moscow Pri­vate Tours, adding most tours were al­ready fully booked.

He put the in­crease at roughly 50 per­cent from an or­di­nary sum­mer.

Apart­ment rent­ing site Airbnb said its hosts would house nearly 177,000 vis­i­tors dur­ing the World Cup.

It did not pro­vide price data but a ran­dom sur­vey of 20 apart­ments listed on Airbnb in cen­tral Moscow found most had tripled prices from the rate in late May, with one host seek­ing to ob­tain 14 times more.

A sim­i­lar look at ho­tels on Book­ing.com found many were seek­ing 2-3 times more for a room com­pared to late May.

Photo: VCG

Cus­tomers pose out­side the official 2018 FIFA World Cup store sell­ing FIFA-branded goods in Saint Peters­burg on May 20.

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.