Economic Impact of Rugby World Cup 2011 in New Zealand
New Zealand and Australia combined, hosted the very first Rugby World Cup (RWC) in 1987, which attracted more than 300 million viewers. This greatly helped put New Zealand on the map as a new tourist destination as it was previously quite overlooked and unheard of. Having the ‘All Blacks’ win the very first tournament this further assisted in the global impact this Major Event had on New Zealand as a country.
As a Major Event, the RWC is capable or appealing to a significant number of visitors as well as media coverage and economic benefits. The 2003 RWC held in Sydney generated such a vast number of visitors and had major media coverage that it qualifies as Mega-Event. This being the case it potentially moves the RWC 2011 into the Mega-Event category. This category encompasses events that are so large that they affect entire economies and global media.
“Their volume should exceed 1 million visits, their capital cost should be at least $500 million, and their reputation should be that of a ‘must see event… Mega-events, by way of their size or significance, are those that yield extraordinary high levels of tourism, media coverage, prestige, or economic impact for the host community, venue or organization.”
Getz (2005,p.6)
Getz (2005,p.6)
Since the evolution of Major and Mega Events, in particular Sporting events (such as the Tennis Open, Rugby World Cup, Olympics and Commonwealth Games) countries and cities are actively pursuing the ability to host said events. They are doing this, as they know the increasing benefits from hosting these events. The Rugby World Cup in particular made the leap from major event to Mega-Event in 2003 and hopefully this will again happen at this year’s 2011 RWC.
In the initial bid to gain the 2011 RWC, New Zealand claimed the promised a “stadium for four million”. New Zealand is beginning organise themselves to become a nation of four million hosts when it invites 20 competing nations along with approximately 85,000 rugby fans from around the globe. Following is a chart showing the average attendance per game at previous RWC and the estimated numbers for RWC 2011. Although they are lower other years, in comparison New Zealand (of all 20 Rugby World Cup nations) is the most secluded and furthest from all others within the world. Showing almost double in estimated attendance from 1987 is a high achievement considering those countries such as Wales and France are easily accessible by other nations in the competition.
This opportunity creates the chance for New Zealand as host country to raise its profile as a holiday and event destination to the rest of the world, enhancing its tourism, hospitality and event industries significantly.
Tourism in New Zealand contributes around 10 per cent of its gross domestic product (GDP). It also either directly or indirectly employs one in every ten New Zealanders. As such a prominent part of the New Zealand economy any form of positive impact would definitely affect the entire country for the better.
In 2006 Rugby New Zealand came up with an estimate of a $1.15 billion that would be generated by the RWC in total economic activity. They also estimated more than half a billion dollars would be added to the New Zealand economy during this period. An update on the report then suggested that RWC will further add $507 million towards New Zealand’s GDP. This is an increase of around 23 per cent more than initially estimated at the time of the bid for the 2011 RWC.
Rugby World Cup is broadcasted in over 200 countries and attracts a huge television audience of over four billion. With these numbers in an audience it clearly creates to opportunity for host nations to gain significant awareness and profiling, ultimately creating long term impacts on tourism. After the huge success of events such as the 2000 Sydney Olympics, tourists still flock to see the Olympic Park at Homebush 11 years after. Similarly with the RWC New Zealand has the great advantage to fully develop all their potential opportunities throughout this RWC journey.
Tourism New Zealand has a strong focus on ensuring all the rugby fans involved in the RWC 2011 are not just there to witness a great rugby tournament but are ensuring they also consider the activities and experiences they can have while staying in New Zealand. Furthermore from the marketing and promotional plans associated with the 2011 RWC New Zealand is hoping and has the chance to connected and form relationships with past, returning and new visitors generating tourism before, throughout and after the RWC.
Evidence of the impact and influence on the hospitality industry in particular is within the get packages and deals created in association with the RWC. For example the following are packages advertised “for the ultimate Rugby World Cup 2011 experience”. They are tickets included a range of travel or hospitality experience through official travel agents.
These packages were created specifically towards the RWC visitors and will help to generate more tourism for these 4 companies. Other evidence is within the incredible increase in available beds within hotels in Auckland. Accommodation availability within the past five years in Auckland has increased from 6,000 beds to a phenomenal 36,000 beds. Previous before the announcement of New Zealand’s success in hosting 2011 RWC there was an estimated 10,000 jump in available beds within the city during the 5 years. Offcourse with influence from the RWC this estimate has now tripled in size as to accommodate not only the expected visitors but hopefully also the numerous extra visitors and future guests to the country.
Furthermore within the hotel industry decisions in 2007 saw Rugby New Zealand announce that Williments Travel would manage a Centralised Booking Agency otherwise known as an “Accommodation Bank”. The main purpose of this accommodation bank was to be responsible for meeting and co-ordinating all the Tournament’s accommodation requirements. The following year in 2008, all major hotel groups within New Zealand had signed up to the accommodation bank. The aim is to be able to co-ordinate all the accommodation inventory to meet the Tournament’s requirements.
Another initiative is within the hospitality industry. The impact of the RWC has created a new joint venture between Eden Park, Auckland Rugby and the Experience Group. This group can provide visitors with the complete package; accommodation, travel to New Zealand and packages to get to the games and travel/activities throughout the entire country.
The RWC 2011 event will be on of global proportions which will cause most hotels to trade at almost close to completely full occupancy particular within those cities where the main games are such as Auckland, Wellington and Christchurch. As demonstrated in the below graph, the number of international visitors estimated will peak greatly during September and October. It is evident that with this projected peak the hotel occupancy will ultimately increase at least a minimal amount.
The Rugby World Cup 2011 is going to impact New Zealand as a country within its economy, within the hospitality industry, within the events industry and within the tourism industry. There will be substantial increases within the economy due to the major increase in visitors and tourists during the RWC period. It will impact the hospitality industry as it has already created a major boost in the packages and hotel deals being created throughout the industry. The impact on the event industry is that having New Zealand as a host of this potential Mega event, it allows the world to see the potential for other world events or even those smaller conference and exhibition events to be held within New Zealand. Finally the tourism industry is impacted in relation to preparing for the incoming visitors associated with the Rugby World Cup 2011.
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