By Marcus Leach
With the Rugby World Cup kicking off this morning (Friday) with New Zealand beating Tonga it seems that the tournament is going to be a hit both on and off the pitch.
The Reserve Bank of New Zealand published a report on the economic impacts of the tournament.
"The tournament is expected to attract a total of 95,000 overseas visitors, with these visitors forecast to spend $700 million in New Zealand," the report said.
"Domestic spending on the tournament is also likely to be significant, although some of this will be at the expense of spending on other items. If incomes increase as a result of the domestic and international spending in New Zealand, that would increase domestic spending even further over time.
"As with other major international sporting events, even after the final whistle there is still likely to be considerable debate around the nature and size of any medium-term gains. Factors like the operational costs of hosting and running the tournament, the capital costs of associated recreational infrastructure, the extent to which the tournament crowds out other domestic and foreign spending, and the imported component of additional spending must be taken into account, along with any possible longer-term gains in visitor numbers, when assessing the overall economic impact of the tournament.
"The estimates from the Reserve Bank are that Rugby World Cup visitor spending in New Zealand will total around $700 million over the final two quarters of 2011.
"This includes general visitor spending in New Zealand as well as the component of visitor airfares and package tours spent in New Zealand. This $700 million would be recorded as exports of services from New Zealand. Some of this spending will have already happened (e.g., ticket purchases). The national accounts are designed to capture economic activity when the service is delivered, not when the payment is made for it."
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