RWC 2011: a small tourism win

By Sam Richardson 26/10/2012

This just out from – the tourism sector had a small win from the Rugby World Cup:

Despite the brief boost from the Rugby World Cup last year, total tourism spending rose just 2.4 per cent to $23.4 billion in the year to March 31, according to Statistics New Zealand figures.

The Tourism Satellite Account shows international tourism spending rose only 1.6 per cent, or by $149 million in the March year. That was slightly down on the growth of 1.8 per cent in the year to March 31, 2011, before the Rugby World Cup.

Before you spot the problem here, it is also noted that:

“Growth in overseas visitor arrivals of 4.4 per cent, largely driven by the 2011 Rugby World Cup, contributed to this small increase in international expenditure,” satellites account manager Peter Gardiner said.
But the boost from the rugby was offset by the impact of the Christchurch earthquake early last year, which put off many foreign visitors to the South Island.

Now, to the problem. The 2011-12 March year experienced a slowing of expenditure growth compared to the 2010-2011 March year. As quoted from the article above, any gains from RWC 2011 appear to have been offset by a reduction in tourism spending from the Christchurch earthquake. Nonetheless, it is interesting that the gain in spending was $149 million for the entire year. I’m pretty sure the Reserve Bank projected the gain in spending from the RWC at around $700 million in August 2011 (and that was with only 95,000 visitors – the event attracted 133,200 visitors). The MED determined earlier this year (February 2012) that the actual international visitor spend from the RWC was in the order of $390 million.


The $149 million mentioned above is growth from the 2010-2011 March year. Last year was a year in which not only the Christchurch earthquake featured but we also saw the continuation of the world financial crisis and recession continue to buffet overseas economies and therefore impact upon tourism in this country. This leads me to a more specific question – what would have happened in the absence of the RWC? Would we have had no growth, or even a reduction in tourism spending from the previous year? It is a question that is almost impossible to know the answer to given that the economic impacts of earthquakes are unlikely to be standard across countries, so correcting for it is nigh on impossible.


In any case, we should be asking whether the injection in spending attributable to the RWC was truly beneficial to our economy. On the surface, it appears that it may well have been (in that it appears to have translated into an increase in foreign tourism spending in this country). Did spending attributable to the RWC actually offset not only the earthquake and the financial crisis but also the possible losses of regular tourism? These are complex questions to answer, but not impossible. It is a matter of untangling the effects as best as one can. Was it worth it? Well, public opinion was in favour after the All Blacks triumphed.


As an aside: A colleague and I are looking at this general question and evaluating the realised impact of the RWC 2011 on host cities in New Zealand. Interestingly, provisional results suggest that the aggregated figure is somewhere in the ballpark of $120 million (working paper link will be posted up in a future blog post once it is ready).