Brazil is expecting to bring home more than $11 billion in revenue from the 2014 soccer World Cup, more than 20 times what South Africa earned for the previous World Cup in 2010.
The Brazilian Institute of Tourism estimated that around 600,000 tourists will visit the country next July and that they will spend approximately $2.6 billion, while the 3 million Brazilians estimated to attend will spend about $7.9 billion.
South Africa’s World Cup in 2010 did not turn out to be the economic success it was predicted to be, with only 309,554 people arriving to see the event out of the estimated 450,000 visitors. The African nation made $513 million.
South Africa is the best example in recent years of the “World Cup effect,” in which host countries are more harmed economically from hosting the event. The country, which was ecstatic to host its first World Cup, estimated revenues of $900 million and ended up making about 60 percent of that. By the end of 2010, South Africa had made back only 11 percent after a $4.5 billion investment to build and renovate stadiums and infrastructure.
Will Brazil go the same road? Sport economists like University of Maryland professor Dennis Coates think so. “There is no evidence that the benefits promised by event organizers have ever materialized,” he said in a study, which pointed out that when the World Cup was hosted by the U.S. in 1994, the average host city experienced an income reduction of $712 million relative to predictions.
Patricia covers Latin America for the International Business Times.
Before joining IBT in March 2013, she worked at BBC America in New York, La República in Lima...