Economic Impact of Sports Tourism in Australia

Question: Describe about the Economic Impact of Sports Tourism in Australia. Answer: Introduction Sports tourism refers to the movement of tourists from one region to another region for the purpose of viewing a sporting event. There has been a significant increase in the number of tourist in the last decade for sports tourism. During such events the tourists contribute to the growth of the local economy, which would not be there under normal circumstances. In addition there is development of infrastructure and also generation of employment. It has also been found that during sports mega event there is an increase in the sales of TV and tablets (Thorne 2016). In addition, it has been found that a sports event gives a feel good effect. It has been that local residents spend more due to the feel good effect, thus contributing to the economy. In a study commissioned by the European commission (2012), it has been found that sports tourism contributes to the increase in Tourism, Education and Fitness and media. Sports tourism contributes significantly to the growth of the hospitality industry in certain countries in the European Union. In some of the North-Western European countries the supply of fitness goods economically benefits certain organizations. In addition sports education contributes to the economy of most of the countries of Europe. In the present assignment we review the previous studies done on the impact of sports tourism on economy of the local region. Thereafter we develop some questions and develop some hypothesis for the present research proposal. We also develop a methodology to study the hypothesis. Finally we give a brief outline regarding the expected research outcome and provide a conclusion. Literature review In Australia the tourism industry is a growing industry (Chen and Bailey 2014). It had a growth of $103 billion in 2013 to $105 billion in 2014. The tourism sector is expected to grow to approximately $119 billion by 2022. Sport tourism forms a significant part of this tourism industry. Australia with New Zealand co-hosted the ICC championships in 2015. The attendance on the final day was more than 90,013 people. The cricket world cup (2015) saw significant foreign investments and thereby lowered the requirement of initial capital investment and thereby the overall burden of capital procurement was significantly diminished (PwC CWC 2015). The sports extravaganza had 595,000 visitors with 145,000 international visitors. The sporting event saw the GDP of Australia grow by AUS$460 million. Many infrastructure developments took place as a result of the tournament. The tournament also opened the avenues for future developments. A study undertaken by Ernst Young on behalf of Confederation of Australian Motor Sports (CAMS) found that in 2013 the Australian motor sport industry generated $2.7 billion in direct industry investments (Ernst and Young CAMS 2013). Besides this the sporting body also created 16,000 jobs. According to the report $12 15,000 are spend per year by the participants for sports related activities. They spend upto$60,000 per year for purchase of vehicle related products. CAMS contributes significantly to the regional economy through the use of sports tracks, travel behaviour of participants and also the distribution of participants. A study commissioned by the European commission (2012), investigated the impact of different aspects of sports (tourism, education, goods) towards the growth of the economy. The study found that factors of sports tourism are benefited the most. It also found that the factors important for the sports hotels, air transport, fitness goods have a substantial amount of economic growth. The study found that sports tourism enables the growth of both the economy as well as the employment. It was also found that Winter sports tourism to certain countries contributes to both employment and hospitality sector. According to a study by La Trobe University (aflvic.com.au 2014) Community football clubs contribute significantly towards the growth of the economy. For every $1 investment in Community football clubs there is a return on investment to the tune of $4.4 in social value. The report found that the local football clubs contribute to local business and hospitality industry. According to the Street Ryan Economic contribution report a local football club on an average contributes $630,000 towards the growth of the economy. Sports tourism is all about the experiences of the people (Shipway et al. 2016). An understanding of sports tourism reflects on the places visited and the activities undertaken by the sports tourists. The study suggested that for the growth of sports tourism, the tourist should be provided with good vivid experiences. The study also noted that much needs to be done in the field of cycling sports to make it a successful sports tourism event. In a report about the AFC world cup of 2015, tourism Australia estimated that there would be 30,000 overseas fans (tourism.australia.com 2015). The fans would not only be visiting the five locations where the matches would be played but also other venues of interest. This according to PricewaterhouseCoopers will contribute to the GDP to the tune of A$23 million. A sports mega event attracts a huge number of tourists and also growth in infrastructure (Li and Jago 2013). Tourists at a sports event contribute to the economic growth of the local economy. These economic benefits can be from the sale of tickets and in the hospitality sector. Also the tourists visiting other locations near the sporting event contributes to the growth of the economy. In addition, during a sports mega event employment is generated. The employment generation can be in the form of infrastructure development and officials and other staff required for the event. Sports have contributed to the economy of South Africa (Marumo, Lubbe and Pelser 2015). The world tourism organization in 2001 estimated that sports tourism contributes to 4-6% of the GDP to the country. Sports tourisms contribute to the employment, hospitality and growth of infrastructure of the region. Tourism infrastructures like event sites, transportation facilities, tourist attraction sites and airports see a modernization of their facilities. Research Questions and Hypothesis The aim of the research is to access the impacts of sports tourism in Australia. To attain the aim of the study, the researcher needs to follow the objectives of the research: To evaluate the economic contribution of the sports tourism facilitated by the government of Australia To assess the infrastructural growth prospects of sports tourism of Australia To investigate the hotel occupancy rate during the sports event incurred in the recent times Research question The questions of the research are the present business research proposal are: Does sports tourism contribute to the economic growth of the local region? Is there infrastructure growth during a sports event? Is there increase in hotel occupancy during sports event? Hypotheses Based on the above research questions the hypothesis for the present research is Sports tourism has no significant impact on local economy Sports tourism does not contribute to the infrastructure of the city Sports tourism has no contribution to the hospitality sector Operational Definitions The average spending per visitor is defined as the amount of money that each visitor spends at a foreign location. The multiplier and capture rates are defined as the net amount of money that goes towards the economy of the local region. Research methodology: Analysis of the data collection method: The research must be systematic in nature to attain the aim of the research. The primary research will be conducted for accumulating the quantitative data from the sample respondents. In this research, the survey will be conducted to know more about the perceptions regarding the sports tourism in Australia. Sampling Techniques The number of spectators at the sports events is the main respondents of the research. 50 respondents will be chosen to participate in the survey process. However it is important to follow the random sample technique while choosing the respondents for conducting the survey process. In this context, it is quite justifiable to choose the random sample technique for collecting the universal views of the respondents regarding the sports tourism. No significant categories of spectators view of a particular sport can be collected because the broader perspective of views needs to be analysed regarding the research topic. Method of Analysis The collected primary data will be analysed through quantitative research design method. Freeman (2015) gives a brief explanation of the method to evaluate the economic impact of sports tourism during a sports event. To evaluate the impact the primary task is to find the number of spectators at the meet, and from this number find the number of non local tourists. Then the next step would be research the average spending by the tourist (Gibson, Kaplanidou and Kang 2012). Next we calculate the number of days the sports meet would continue. The next step would be to find the cost of living in the location. Thus the average daily spending by the touring party can be found. With some research we could find the total spending by the tourists. Thus we can find the economic impact of a sport event. Gantt chart Week 1 Week 6 Week 10 Week 13 Week 14 Introduction Literature review Data collection Data analysis Conclusion Figure 1: Gantt chart of the research Research Process For the purpose of the present research the data regarding the number of tourists during a sports event would be collected. The data would be collected both from the hospitality industry as well as spectators at the sporting venue. The data on the number of tourists would be used to calculate the expenses during the sports meet. This would then be used to evaluate the impact on the economy. Expected outcome of the research Previous audits conducted by Price Waterhouse Coopers, Ernest and Young on Australias mega sports events have shown that sports events always contributes to a growth in tourism of the country. The audits have also shown that factors like employment increase, growth in infrastructure, feel good effect have contributed to the growth in the economy. Previous studies have shown that such sports meet also brings in money by way of contributions from sporting bodies. All this contributes significantly to the growth of economy and GDP of the country. The present research will show how the economy of the region is benefited with the help of sports tourism. Conclusion Thus it can be concluded that sports and tourism are related with each other. In addition we also find that tourism during sports events contributes positively to the growth of the economy. The present research will analyse to some extent the effect of sports tourism on the economy, employment gains to the local economy. The present would also analyse other factors which have positively contributed to the growth of the economy. The research would also provide whether sports tourism has any negative impact on the economy. References aflvic.com.au (2014) Value of Community Football Club, La TRobe Univesity, Victoria Chen, G. and Bailey, G. (2014). Tourism Forecasts - Autumn 2014, Tourism Research Australia, Canberra. Ernst and Young CAMS. (2013). Economic Contribution of the Australian Motor Sports industry, Ernst and Young, Australia Freeman, K.M., 2015. Inexpensively estimating the economic impact of sports tourism programs in small American cities. Indiana Business Review, 90(1), p.1. Gibson, H.J., Kaplanidou, K. and Kang, S.J., 2012. Small-scale event sport tourism: A case study in sustainable tourism. Sport Management Review, 15(2), pp.160-170. Li, S. and Jago, L., 2013. Evaluating economic impacts of major sports eventsa meta analysis of the key trends. Current Issues in Tourism, 16(6), pp.591-611. Marumo, M., Lubbe, S. and Pelser, T. (2015). Sport tourism as a developmental initiative in the economy of Mafikeng. African Journal of Hospitality, Tourism and Leisure, 4(2). PwC CWC. (2015). Economic impact and benefits analysis of the ICC World Cup 2015, Pricewaterhouse Coopers, Australia Shipway, R., King, K., Lee, I. and Brown, G. (2016). Understanding cycle tourism experiences at the Tour Down Under. Journal of Sport Tourism, 20(1), pp.21-39. SportEcon, 2012. Study on the contribution of sport to economic growth and employment in the EU: final report. Thorne, R. (2016). Economic impact of sporting events. [online] The Independent. Available at: https://www.independent.co.uk/student/shu/economic-impact-of-sporting-events-10260570.html [Accessed 1 Dec. 2016]. tourism.australia.com. (2015). AFC Asian Cup to give Australian tourism a free kick. Retrieved from https://www.tourism.australia.com/news/Media-Releases-2015-afc-asian-cup.aspx