Business

Japan expects to reap ¥437 billion in economic benefits from hosting Rugby World Cup

by Junko Horiuchi

Kyodo

Organizers say they expect the Rugby World Cup to bring ¥437.2 billion in economic benefits, pinning their hopes on the 400,000 foreign visitors who are projected to visit Japan for the tournament.

As that estimate only takes into account the impact before and during the tournament, and not afterward, real success depends on whether the Japanese rugby community, sports-related companies and host cities can carry on the effects to boost budding businesses, analysts say.

An economic impact report by the Japan organizing committee of the Rugby World Cup, released in March 2018, says that the tournament to be hosted in Asia for the first time since the inaugural edition in 1987 could attract up to 1.8 million fans, including 400,000 from overseas.

The World Cup, taking place in 12 venues in 12 cities from Sept. 20 to Nov. 2, will generate an estimated total of ¥437.2 billion, resulting in a boost in Japan’s gross domestic product worth ¥216.6 billion, an increase in tax revenue valued at ¥21.6 billion and the creation of 25,000 jobs, according to the report.

“Fans from faraway countries tend to stay longer, with some staying as long as several weeks,” the report said. “Visitors who come to Japan for the tournament are expected to spend an average of ¥20,000 per day, giving their stays a sizeable economic impact.”

Takayuki Katsurada, senior vice president in the regional planning department at the Development Bank of Japan, said the organizers’ estimated total output can only be achieved if the inbound travelers spend as much as expected.

“The key is whether Japan can offer convenient and attractive services for foreign travelers that encourage them to stay and spend,” Katsurada said. “There is a language barrier and foreigners also still tend to have an image that Japan is prone to natural disasters and (therefore) unsafe.”

A survey conducted last fall by the Japan Tourism Agency found that local governments face such problems as too little in the way of hotel accommodations or emergency preparedness, as well as overcrowding and poor behavior by visitors in areas with popular tourist destinations.

According to analysts, regardless of whether the projected economic impact of the Rugby World Cup comes true, initiatives to link sports to businesses need to be further strengthened if Japan wants to maximize the benefits from the Rugby World Cup.

Japan, which has traditionally put an emphasis on the educational and cultural aspect of sports rather than the economic potential, has seen little growth in sports-related markets, prompting the government to push for a boost in investments in the industry as part of its growth strategy.

The government has set a target to expand the sports-related sector, estimated to be worth ¥5.5 trillion in 2015, to ¥10 trillion by 2020 and ¥15 trillion by 2025, by hosting world-class sports competitions and promoting sports-related businesses both at home and overseas.

“While the sports boom may continue through the Rugby World Cup and the 2020 Tokyo Olympics, it is certain to lose its attraction afterward,” Katsurada said.

“For sustainable growth, it is important that Japan proactively puts out a message that sports can be a new business,” he said.

He cited hospitality services for VIPs, stadium and arena management, sports-related tours and the offering of high-tech devices, such as sound and display systems for viewing sports as potential areas of expansion.