Major Sport Events and Long-Term Tourism Impacts

Abstract

Hosting major sport events can cause positive shifts in tourism demand on a long-term basis, but the additional revenues might not counterbalance the investment costs that are required of the host destination. Whether positive shifts have actually occurred cannot be measured solely by counting the additional number of tourists. Increases might also come from positive shifts in supply. Megaevents require expensive investments in sport facilities, as well as in nonsport city-related infrastructure. These investments must fit into the city’s long-term plan to make the event economically successful. The demand from tourists can subsidize the production of goods and services that are characterized by the advantages of economies of scale. This provides local residents with goods and services that they otherwise could have only consumed outside the region. Many of the benefits from sport events fall into the category of public goods. This represents a rationale for governmental funding if those who benefit are driven by free-rider incentives. The prospect of governmental funding, however, provides motives to exaggerate the socioeconomic value of the events. This complicates the job of deciding which events to support and by how much.