We published this series of articles five years ago. We think they are still relevant, so we are republishing them now.
By Satish Sekar © Satish Sekar (November 27th 2009)
The Events Strategy
South Africans including Dr Danny Jordaan, the CEO of Africa’s World Cup, realised that sport offered the means to achieve those ends and would engage the new nation as well as unite them. All races love sport in South Africa. Itʼs a similar story in Brasil – well almost. Patience ran out with the cost and corrupt practices that had been tolerated there for years. People had other priorities, especially in such austere times. But few things can advertise a country like a sporting event – the Olympic Games and footballʼs World Cup being top of the food chain.
“We decided to follow a major event strategy,” said Jordaan. “We hosted the Rugby World Cup in 1995, the African Cup of Nations in 1996, 1998 the World Athletics Championship, 2002 the cricket world cup to sustain a development consciousness of a united nation in our country. We now had the cricket 20/20 World Cup in 2007. We have the motor-racing and a whole host of events”.
But South Africa was far from content. “We made a bid for 2004 Olympics, but lost out to Athens”, he said. “We made a bid for 2006 World Cup, but lost out to Germany and now we are hosting 2010 and what that has done is two things that is important: one is that South Africa was not forgotten after 1994; secondly and perhaps more importantly, through hosting all of those major events there was infrastructure improvement in our country.”
Jordaan is not just talking about sporting infrastructure, although there will be new stadiums and existing ones will be refurbished too. “It was not only the stadiums,” Jordaan said. “It was many other things – a number of hotels have been built in our country and investment, direct investment, as well as of course tourism. We have seen an eleven percent annual growth in tourism”.
Encouraging tourism was plainly part of the development strategy, but the events strategy has flaws. Once the event is settled – the bid successful – costs spiral out of control. Construction costs double or worse as there is no choice. You canʼt have a World Cup sub-standard stadiums. Some had to be built from scratch and others brought up to modern requirements.
This would cost. It was budgeted for, but that was before the event had to happen. Afterwards, the stadiums had to be built or refurbished and costs for materials and work rose as suppliers rewrote the laws of supply and demand. They realised they could demand more to supply what was needed and did so.
To make matters worse, the workers actually doing the constructing continued to be exploited and their safety was not the priority it should have been. There were serious accidents – fatalities even – but workersʼ rights still remained a low priority. This is not an issue confined to South Africa. Brasil is experiencing it now and Qatar too has attracted headlines about it.
Ukraine and Poland experienced spiralling costs too. And all hosts face another problem – private enterprise. Market-based economics is incompatible with a sporting-event development strategy. A mark up on prices is expected – inevitable even – but doubling, trebling or more of prices for accommodation is outrageous and short-sighted, especially in tourist-based economies.
South Africa is a beautiful country. So too is Brasil. These are countries worth visiting and to some extent dependent on visitors recommending them. Having visited both countries there is much to love about both, but I went to both during sporting events and also when there were none. The difference in price and also attitude was stark.
On both visits we covered sport too and observed attitudes. There was a marked difference. Prices were reasonable and people more welcoming too, as they knew you had chosen to be there because you liked their country and not because an event meant you had to be there. And this is the events trap. It is a chance to sell the country long term, but that will not happen if visitors feel ripped off afterwards. Nevertheless, Jordaan is having none of it. He believes in the strategy of using sporting-events to induce tourism.
“In 2007 we went beyond seven million foreign tourists into our country, so I think that through hosting major events we have been quite successful in keeping the focus on our country, developing South Africa as a country, getting the infrastructure improvement”, Jordaan says, “because in most countries in the period of liberation or democracy there is a decline in the infrastructure, especially those countries that went through the decolonisation process”.
He explains further. “In our case from 1990 to 2008 the infrastructure in our country has improved and is much better”, Jordaan says. “Our economy is much better and we had investment from Vodafone and investment in Standard Bank one of our banks in South Africa and that was over US $12 billion”.