The World Cup Effect

The World Cup Effect: Requirements and Costs of Infrastructure

The World Cup, an international football tournament, is the largest single-activity sporting event in the world, drawing fans from every continent and stirring deep strains of national pride. The 2018 World Cup in Russia started this week and will run for a month. Along with the locals (not to mention the millions of viewers worldwide), over 1.5 million visitors from 154 different countries are expected to arrive in Russia to root for their country. Qatar will host in 2022, and the United States, Canada, and Mexico will collectively host in 2026.

Hosting the World Cup is a great honor, and one that many countries fight for. But hosting does not come without its drawbacks. It can be a very costly event with no guarantees on economic return. Any country that hosts the World Cup must meet strict infrastructure requirements, amongst many other standards set by FIFA, the international governing body for football. These minimum requirements include criteria for stadiums, hotels, transit, and communications and electrical grids. In fact, 70% of the bidding process comes down to already having the infrastructure in place or demonstrating plans and commitments to ensure criteria will be met.

  • South Africa spent approximately $4 billion on World Cup preparations.
  • Brazil spent an estimated $15 billion in World Cup preparations.
  • Russia will be spending over $14 billion on infrastructure costs beyond stadiums – constructions projects that created 220,000 domestic jobs. This comes out to about $1 billion per tournament host city.
  • Oil-rich Qatar has earmarked $220 billion to host the World Cup (and no – that is not a typo). They do not have existing stadiums and have only a fraction of the required infrastructure, so they are starting from scratch in many areas. Further, they are taking the opportunity to show off to the world the luxury and opulence of Qatar.

Having the proper infrastructure in place can be the key to success for an event of this scale. And in some countries, the promises of an updated infrastructure, along with the potential for increased tourism dollars, are a huge driver in placing a bid and garner the most support from the locals.

Read ahead to learn more about some of the requirements, costs, and impacts of infrastructure upgrades.

 

Stadiums

 FIFA Requirement: FIFA requires 12 stadiums that each have a minimum capacity of 40,000 – 80,000, depending on which matches will be played there. Additionally, each team needs its own base camp training site, as well as a training site at each stadium. The 2026 World Cup will start to require 14 stadiums and 150 training grounds.

Stadium construction and renovation is one of the biggest costs in hosting the World Cup. In most countries, existing stadiums are placed in major cities, but FIFA prefers that stadiums be spread throughout the country. Thus, many of the new stadiums are constructed in smaller, more far-flung cities that don’t necessarily have a football team to use the arena later and that can’t support such large-scale construction in the long-run. Stadiums are expensive to build and manage, they often take up scarce and high-value real estate (since they must be located near city center), and they are difficult and costly to maintain afterwards. South Africa spent $1.3 billion on building and refurbishing stadiums, Brazil spent $3.5 billion, and Russia spent $3.8 billion.

With future operating costs of $32,000 per stadium per year on average and only 10% of seats filled at future events, these arenas are all but destined to a future of underuse and degradation. For this reason, stadiums are also one of the most controversial aspects of hosting the World Cup, as they contribute very little to each city’s infrastructure after the tournament has ended.

 

Transportation

FIFA Requirement: FIFA requires that each stadium has an airport nearby, and each airport must have a minimum capacity of 1,450 passengers per hour.

Countries need to be able to accommodate the temporary demand surge in cities nationwide, including terminals, passport control and immigration checkpoints, runways, fueling stations, and roads leading in and out of the airport. In some cases, structures such as terminals are built with the intention of being temporary, as this influx of visitors is only for a very short period of time.

Further, there needs to be an adequate way to efficiently funnel tourists from the airport to the stadium, including rail lines, shuttles, and areas for taxi services. While these systems will efficiently move visitors from transit hubs to venues, the challenge is in building infrastructure that is beneficial in the long run.

South Africa invested $2.6 billion on upgrading their transit infrastructure for the 2010 World Cup.

 

Accommodations

FIFA Requirement: FIFA requires 72 base camp hotels for teams and referees, as well as 4 hotels per stadium location. For spectators, they require 1,760 – 8,080 hotel rooms in each host city, based on which match will take place there.

Hotels need to be able to accommodate the huge influx of both foreign and domestic fans. Brazil, unable to meet the demand for hotel rooms, brought in 6 cruise ships to provide an additional 10,000 rooms. But doing so required the port to be revamped – a $7 billion project. At the cost of $45 billion, Qatar is building an entire city from scratch that will include 22 brand-new hotels, turning a vacant desert into a luxury 450,000-person, 38-square-mile metropolis. They are also building an off-shore luxury resort.

The 2018 World Cup will take place at 12 venues in 11 cities. Russia has constructed over 108 new facilities, including 96 training sites for the World Cup, as well as 27 new hotels, 26 transport facilities, and updates on 13 hospitals. One of the biggest challenges in hosting the World Cup is making these new facilities usable after the tournament is over. For example. Russia plans on turning the training sites into afterschool centers for children. Qatar is planning on disassembling their stadiums, breaking them down, and rebuilding smaller stadiums in developing countries. Brazil recycled components of training facilities to build primary cycles. And they are working on plans to turn some of their stadiums into affordable housing.

North America just won the bid to host the 2026 World Cup, with Mexico and Canada each hosting 10 games and the United States hosting the other 60, including all matches from the quarterfinals onward. But for the first time ever, the field will expand from 32 teams to 48 teams and from 64 matches to 80 matches, which could place an even greater strain on infrastructure and resources. Fortunately, the US has a well-established economy and most of the infrastructure already in place to handle a massive event like the World Cup.

 

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