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Rugby: $4 bil. benefit expected for World Cup in Japan amid tourism boom

Rugby: $4 bil. benefit expected for World Cup in Japan amid tourism boom

Rugby World Cup organizers say they expect the upcoming major sporting event in Japan will bring in 437.2 billion yen ($4 billion) in economic benefits, pinning their hopes not only on sales of tickets and goods but spending by up to 400,000 expected foreign visitors.

As the figure only assesses impacts before and during the tournament from Sept. 20 to Nov. 2 and not afterward, the real success is whether Japanese rugby communities, companies and host cities can carry on the effects to boost the country’s budding sports businesses, analysts say.

The economic benefit impact report by the local 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, to take place in 12 venues in 12 cities across Japan for 44 days, will generate a total output of 437.2 billion yen, resulting in a boost in the country’s gross domestic product of 216.6 billion yen, an increase in tax revenues of 21.6 billion yen and the creation of 25,000 jobs, the report said.

“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 20,000 yen per day, giving their stays a sizeable economic impact.”

Takayuki Katsurada, senior vice president at the Regional Planning Department at 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,” he added.

A survey by the Japan Tourism Agency, conducted last fall amid the sharp increase in foreign visitors in recent years, showed that local governments face issues such as a shortage of accommodation and emergency preparedness but also headaches due to traffic jams and poor tourists’ manners in areas with popular tourist destinations.

While the projected economic impact of the Rugby World Cup may be achieved, the country’s initiative to link sports to businesses ne to be further strengthened if the country wants to maximize the benefits from the Rugby World Cup, the analysts say.

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

The government has set a target to expand the country’s sports-related market, which was at 5.5 trillion yen in 2015, to 10 trillion yen by 2020 and 15 trillion yen by 2025, through the hosting of world 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, naming various 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 sports viewing, for example.