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Boom or bust for World Cup hosts?

Tuesday, July 08, 2014 - 02:47

It's semi-finals day at the World Cup and Brazil is enjoying the benefits of having 600,000 tourists in the country. But as Ivor Bennett reports many aren't so convinced the economic impact of hosting the tournament will be that significant.

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Their sunburnt skin makes them easy to spot. The European tourists aren't used to Rio de Janeiro's baking heat. And then there's the Argentineans - the distinctive blue and white stripes covering vast swathes of the city's iconic Copacabana beach. SOUNDBITE: Ivor Bennett, Reuters Reporter, saying (English): "90,000 tourists are expected here in Rio during the World Cup. They're not just here for the football of course, but also for beaches like this. Now according to the local authorities, they'll deliver a huge boost to the region's economy, to the tune of 450 million dollars." For Brazil as a whole, the estimates are impressive. 600,000 tourists, spending 3 billion dollars. Tourism minister Vinicius Lages. SOUNDBITE: Vinicius Lages, Brazilian Minister for Tourism, saying (English): "The money that is going to be generated through the games is not that important of course. But in the long-term, the infrastructure that is being built, the services that is being qualified, the projection of Brazil as a destination, that will be, in the long-term, the most important impact on our economy." Brazil is promising over 3.5 million new jobs to come from hosting the World Cup, along with a 0.4% boost to GDP every year for the next 5. But the evidence from the last two tournaments suggests otherwise - both South Africa AND Germany falling far short of expectations. Many expect Brazil to be no different - a Reuters poll predicting a bump of just 0.2. percent on growth. Pedro Trengrouse is professor of sports business at Rio's FGV university. SOUNDBITE: Pedro Trengrouse, Professor of Sports Management and Business, Fundacao Getulio Vargas, saying (English): "Rio de Janeiro and Sao Paolo, if you look at these two cities, you see that our hotels are always full, so we are always receiving tourists. So we are just changing tourists, because people are coming here for the World Cup, and some people who would come without the World Cup, are not coming now." Street vendors though are desperate to cash in - turning Rio into a sea of yellow and green. While souvenir and shirt sales are expected to rise, most retailers here are predicting revenues to plummet during the tournament - in some cases by as much as 70 percent. A glut of public holidays could mean industry suffers too - the sector predicting losses of up to 120 million dollars. Sergio Duarte is director of the region's industry federation. SOUNDBITE: Sergio Duarte, Director, Federation of Industries of the State of Rio De Janeiro, saying (Portuguese): "The other week only Monday and Friday were full working days, that's going to harm industry a lot. Some won't be able to stop production for example. Those industries will double their costs because they'll have to pay overtime. So there will be big losses for the sector." One thing Brazil is guaranteed is exposure - with half the world's population expected to tune in. The challenge now is to project a positive image. With scenes like this, it'll be hard not to.

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Boom or bust for World Cup hosts?

Tuesday, July 08, 2014 - 02:47