Factbox-How hosting Euro 2024 could impact the German economy
BERLIN - Germany will be hoping for sporting success as host of the 2024 Euros soccer championship kicking off in a month's time, but it will also be looking for a consumption boost from all the fans guzzling beer and staying in hotels and rented rooms.
Europe's largest economy is expected to grow around 0.3% this year, slower than other large industrialised countries. The following is an overview of how the tournament could give it a welcome boost.
WHO CAN HOPE FOR BETTER BUSINESS?
There are 2.7 million tickets available for the four-week event from June 14 to July 14. The hosting venues Berlin, Munich, Cologne, Dortmund, Duesseldorf, Frankfurt, Gelsenkirchen, Hamburg, Leipzig and Stuttgart can expect a rush of domestic and foreign guests.
"People are more active when it comes to travelling, for example going to major events and concerts by international stars," said Norbert Kunz, Managing Director of the German Tourism Association (DTV).
"It could well be that 2024 will be a new record year for tourism in Germany – also thanks to the many enthusiastic football fans who want to experience this event live." Breweries can also expect a boost.
"Large football events in the past have shown that more beer is drunk during the tournament than is normal in the summer weeks," said Holger Eichele of the German Brewers Association. During the 2006 World Cup, which Germany also hosted, beer sales rose around 5% before and during the tournament.
That would be especially welcome as 2023 was a difficult year for the beer industry, with sales in the country falling by 4.5% to 8.4 billion litres, continuing a long-term downtrend, according to government data.
WILL THE TOURNAMENT CREATE A CONSUMPTION BOOM? "The experience of the World Cup in 2006 shows that major sporting events are not economic fireworks," said Michael Groemling of the German Economic Institute (IW).
Many consumers are likely to use the tournament as an opportunity to buy a new television or drink an extra beer.
"But they save money elsewhere: bratwurst instead of a restaurant, a TV evening instead of going to the cinema," said Groemling. "As a result, consumer spending is not necessarily increasing but rather shifting."
Commerzbank economists say the economy could stagnate in the second quarter - which includes the first half of the tournament - after growing by 0.2% from January to March. WHO ELSE COULD BENEFIT?
Retail sales could receive a consumption boost if the home team does well on the pitch, said a spokesperson for the industry association HDE.
"Only if the German national team survives the first phase of the tournament can consumer sentiment also benefit,” the spokesperson said. Grocery stores tend to do well during major sporting events as fans stock up on drinks and food while watching together.
The booking portal AirBnB expects the Euros to provide an additional tailwind for the rental of holiday apartments.
The advertising space marketer Stroeer also expects a boost, as well as sporting goods manufacturer Adidas. World market leader Nike has nine teams under contract at the European Championships, Adidas six and Puma four.
WHAT ABOUT GERMANY’S IMAGE?
"A major sporting event can brighten the mood and improve the image of the host country," said the IW's Groemling, speaking about its allure at a time when foreign direct investment into the country has fallen.
"At the same time, the economy is shaped by expectations and moods - the emotional return from the EM should not be underestimated."
Source: Reuters
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