Tennis tournaments, with their global appeal and fan following, have a significant economic impact on host cities and countries. As times progress, international awareness of what is known as ‘the sport of the elite’ has increased, resulting world renowned economists such as Romain Gauriot to research on the money involved within the sport. It’s worth noting that while tennis has economic implications, the sport itself is also influenced by broader economic factors including sponsorships, championship money, and money invested in infrastructure and facilities.
For starters, benefits to the economy of the host country are influenced by a boost in tourism experienced during major championships including the four major Grand Slams of the year. It’s safe to say that aside from the annual summer and winter vacations, the four cities experience peak tourism during this time. For example, according to a report by Deloitte, the Australian Open in 2020 generated AUD 387.7 million (approximately USD 279.7 million) in total tourism spending in Melbourne, including accommodation, food, transportation, and entertainment (source: Tennis Australia). The hotel accommodation industry is also at high occupancy. For instance, the Wimbledon 2019 saw an average hotel occupancy rate of 99% in London, with some hotels even reporting 100% occupancy (source: STR).
When world ranked tennis players participate in a championship, top-notch sporting facilities are a must. While the construction of these stadiums require a hefty initial investment, they benefit the local economy in the long run as they attract future events and induce sports tourism. As a matter of fact, according to a study conducted by Forbes Finance, in the year 2017, Wimbledon generated a $289 million revenue, which was 6.5% greater than their earnings in 2016. Along with that, the US open posted a revenue of $335 million in the same year, a 9.8% gain from 2016. This is a clear indication in the rise of the economic benefits that come with the sport, and today, tournament organisation committees compete to outrun one another.
Since there are two sides to every coin, there is also an economic downside that comes with hosting tennis tournaments. First off, the cost of hosting these tournaments is exorbitant. For example, the estimated cost of hosting the 2020 Olympic Games in Tokyo, which included tennis events, was around $12.6 billion (source: Statista) Chances of failure in generating the desired revenue by the championship or the cost exceeding projections can lead to a major debt for the local economy. Lastly, regular business flow is disrupted and is a cause for protest by the the locals. For example, a study conducted during the 2019 US Open estimated that local businesses in Queens, New York, experienced a 50% decrease in revenue during the tournament (source: amNewYork).
While tennis tournaments have their charms of strawberry and cream during Wimbledon matches and cries of “Allez” throughout the Rolland Garros, they can also pose a hefty financial load on host countries. Nevertheless, the magnificence of the sport continues to keep the audience hooked and the viewership of tennis is only seen rising. Thanks for reading!
Citations
Trapasso, Clare. “Some Queens Leaders Say U.S. Open Isn’t Good for Local Businesses.” New York Daily News, 10 Jan. 2019, www.nydailynews.com/new-york/queens/u-s-open-queens-article-1.1439502.
Australia, Tennis. “AO 2020 Delivers Record Benefits to Victoria.” AO, ausopen.com/articles/news/ao-2020-delivers-record-benefits-victoria#:~:text=In%202020%20%24387.7%20million%20of,to%20more%20than%20%242.71%20billion. Accessed 5 June 2023.
Minassian, Grace. “Why Wimbledon Leaves $60 Million on Centre Court.” Forbes, 6 Aug. 2018, www.forbes.com/sites/graceminassian/2018/06/27/why-wimbledon-leaves-60-million-on-centre-court/?sh=7601610bc68e.
“UK Hoteliers Take Advantage of Wimbledon Demand, Raise Rates.” CoStar, www.costar.com/article/495925014/uk-hoteliers-take-advantage-of-wimbledon-demand-raise-rates. Accessed 5 June 2023.
Published by Statista Research Department, and Dec 9. “Italy: Italian Tennis Federation Revenues by Source 2019-2020.” Statista, 9 Dec. 2022, www.statista.com/statistics/1109652/revenues-of-the-italian-tennis-federation-by-source/.
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