Cricket World Cup 2023 In India To Boost Consumption By At Least $1.6 Billion
The economic impact is estimated to be more than twice the combined boost of the previous two editions.
Remember April 2, 2011? The night India won the cricket world cup for the second time, and an ecstatic Ravi Shastri's cheering on air: “Dhoni finishes off in style. A magnificent strike into the crowd. India lifts the World Cup after 28 years.”
As the country hosts its fourth cricket world cup, millions of Indians will sit inside stadiums or in front of televisions nervously, speculating and twiddling their thumbs, rooting for the team to repeat the feat again after 12 years.
Regardless of the result, the Indian economy will be more than a billion-and-a-half dollars richer, according to BQ Prime's calculations. And that's a conservative estimate.
The ICC World Cup 2023 that kicks off next month will see fans from India and overseas fly into different cities; buy tickets to watch matches at stadiums; book hotels to stay; eat and drink at restaurants-to-roadside food stalls; purchase memorabilia and merchandise; visit tourist destinations and do more.
Aviation and hospitality sectors will be the key beneficiaries.
Air traffic will surge along with a significant uptick in the demand for airport services. Hotels, too, are set to reap the rewards from the world cup frenzy, with room rates soaring eight to 15-fold for bookings during the India-Pakistan clash, according to multiple reports.
Demand for restaurants and fast-food chains is set to surge, catering not only to tourists but also the millions of Indians opting for home delivery.
According to BQ Prime's calculation, the combined economic impact of such direct and indirect spending during the tournament would be at least $1.6 billion. That's more than three times the economic impact of $347.2 million in the 2015 Australia-New Zealand edition and $447.8 million during the 2019 U.K. world cup.
How We Calculated It
The direct financial impact factors in spending on airfares, accommodation, stadium tickets, food and beverage, and intercity travel by domestic and foreign travelers. It also covers Board of Control For Cricket In India's spending on infrastructure and renovations for the event.
The average per person spending was calculated for five cities—Delhi, Mumbai, Kolkata, Chennai and Ahmedabad. This was then used to calculate spending on each match at 10 cities in India that are hosting games.
Ahmedabad was included in the initial five since it will host two high-stakes games: India versus Pakistan and the finals.
Assuming 100% occupancy across all matches in all stadiums, the total number of attendees are estimated at 24.8 lakh. Based on data for the past two world cups, an average 20% of the visitors are international and 40% each are Indians from outside and within the home city.
The primary expenses an individual will incur includes airfares, hotel accommodation, stadium admissions, food and beverage, intercity transit and tourism.
This covers round-trip expenses to and from the city hosting the match on dates coinciding with high-stakes matches. The international travel costs are excluded, since these would not necessarily accrue to Indian airlines.
This is calculated based on average per night tariff of three, four and five-star hotels during the world cup.
This is simply the price of the match ticket for each of the cities.
Eating And Drinking
This covers three meals a day, priced at three, four and five-star restaurants. One meal is assumed to be low cost.
Expenses are computed by considering a round trip between the airport and the stadium. An extra allocation of Rs 350 is added to cover additional travel costs for each visitor.
The Direct Impact
The sum of all these costs mentioned above will be the direct cost per match for an individual fan. And it varies with each city.
For instance, an attendee travelling from Delhi to Mumbai will spend Rs 30,200, while the one travelling from Mumbai to Delhi will spend Rs 29,600.
Cost Per Attendee
The average cost for visitors from within a city stands at Rs 7,600 per match, implying a total cost of about Rs 755 crore.
Intercity And International
The average cost is estimated at Rs 32,100 per match. With 14.9 lakh intercity and international attendees, the total direct impact of this cohort will be Rs 4,781 crore.
This only factors in international travellers, assuming they wouldn’t spend significantly on airfares just to watch matches.
Tourists coming to India spend an average of 30% of their budget on airfares and 70% on tourism and associated expenses, according to estimates shared with BQ Prime by a travel agency.
The average round trip costs for travellers from nine participating countries, other than India, is Rs 63,000. The remaining 70%, therefore, works out to Rs 1.47 lakh.
Since the 70% also includes the direct spending to watch a match, that is deducted. So, an international attendee is estimated to spend at least Rs 1.14 lakh on tourism.
In all, international travellers are estimated to spend about Rs 5,705 crore on tourism in India during the world cup.
According to media reports, the BCCI is spending Rs 50 crore on each of the 10 World Cup stadiums, totalling to Rs 500 crore spent on infrastructure and stadium-based renovations.
So, the total indirect financial impact from tourism and infrastructure is estimated at Rs 6,200 crore.
Total World Cup Impact
The combined direct and indirect impact is Rs 11,750 crore.
Over and above that, an additional 15% impact is assumed to account for other smaller and diversified spending on merchandise sales for buying from local vendors, according to estimates by an economist, who spoke on the condition of anonymity.
That takes the total estimated economic impact of the Cricket World Cup 2023 to Rs 13,500 crore, or about $1.64 billion at prevailing exchange rates.