In the previous article, we discussed the concept of sports tourism. We have seen how sports tourism has a wide definition and includes many different types of travel activities. We can say that there is evidence to support the claim that the presence of sports leagues and franchises does lead to an increase in tourism in any particular region.

However, there is another assumption being implicitly made here. The assumption is that tourism is inherently a good thing for the economy. This is believed to be the case since many countries around the world spend money in attracting tourists to their nation for sports tourism. However, this may not necessarily be the case. Many countries have also experienced many negative economic effects of sports tourism.

In this article, we will have a closer look at both the positive as well as negative economic effects of sports tourism in order to enable the reader to have a better understanding of the subject.

Benefits of Sports Tourism

There are several benefits of sports tourism. Some of the important benefits have been listed below:

1. Tourism Increase: Needless to say, the presence of sports tourism can lead to an increase in the presence of tourists in the city. Also, since a lot of these sporting events are held annually, the increase in tourists is not temporary. Instead, business owners can count on increasing the footfall of tourists every year. This is particularly helpful to the travel and hospitality sector such as hotels, restaurants, bars, and bus operators. Once the tourists are in the city, they also spend time visiting other tourist attractions there. Hence, the overall economic activity increases.

2. High-Margin Businesses: It needs to be understood that not only do sporting events increase the tourism revenue in a given country but they also lead to the creation of high-margin businesses.

   Sports fans are known for their dedication to their teams. Hence, they are generally not price-sensitive. It is, therefore, possible for local businesses in a city to sell high-value branded items with high-profit margins to such fans. Items such as apparel and memorabilia have a high-profit margin. Hence, the state also earns more in the form of direct as well as indirect taxes.

3. Improved Infrastructure: Lastly, sports tourism leads to the creation of sports infrastructure in the city. This sports infrastructure can be used by regular citizens when it is not being used by the team. The end result is that the government is able to provide a better standard of living to its citizens without having to spend a lot of tax dollars.

Disadvantages of Sports Tourism

The positive economic impact of sports tourism has been well publicized. However, there is very little mention of the negative economic impact. Some of the details related to disadvantages have been mentioned below:

1. Law and Order Expenses: It is a known fact that sports fans tend to be very passionate about their teams. This also leads to the creation of rivalries between fans belonging to different teams. It is possible that this rivalry could escalate into some form of violence. Such violence has been witnessed between the fans of many football teams in Europe.

   Hence, it is imperative for the city that is hosting such events to be prepared for such violence. The end result is that the policing costs as well as other expenses related to law-and-order management need to be increased. This causes a drain on the economic resources of the city.

2. High Maintenance Costs: It is true that the presence of sports clubs leads to the creation of sporting infrastructure in a city. However, it is also true that there are significant maintenance costs related to the creation of sporting infrastructure in any city.

   The tourism-related revenue from these venues may not be able to fulfill the requirement of maintenance costs and there might be a huge shortfall which the government may have to pay if they do not want the stadium to be in a state of disarray.

3. Not Sustainable: The increase in tourism activities as a result of sporting events is not permanent. The tourists only keep visiting the city as long as the event is being held.

   If the event is held in a different city, then the same tourists as well as their tourism dollars end up moving to a different city. Therefore, it can be said that the increase in tourism is temporary and not sustainable over the long run.

4. Negative Social Impact: When tourism to a particular city increases beyond a certain level, it can become a nuisance for the residents.

   For instance, bars, pubs, and other establishments may become a hub for anti-social activity. Also, the prices in the city may become expensive for everyone. As a result, inflation is caused and the purchasing power of the local citizen ends up being reduced. This loss of purchasing power may be several times greater than the additional tax revenue generated by the government.

5. Environmental Costs: Last but not least, it is possible that there might be an environmental impact as a result of certain types of sports tournaments.

   In general, the operation of more buses, trains, airplanes as well as air conditioners leads to an increase in the pollution caused by the city. It is common for proponents of sports tourism to not take such costs into account while displaying their calculations.

The bottom line is that sports tourism can lead to an increase in economic activity in a region. However, that may not always have to be the case. As mentioned above, there are several ways in which it can impact economic activity negatively as well. Hence, it is important to have a careful evaluation before deciding to use sports tourism as an economic model for a city.