Indian economy to see a boost from the ICC Men’s Cricket World Cup?

How can the world cup boost the Indian Economy?

The biggest carnival of cricket- the ICC Men’s Cricket World Cup 2023 is underway in India. For the next 45 days, fans from around the world will be either found staying glued to their TV screens or watching the matches live from the stadiums.

India being the hosts and a cricket-loving country, one can find talks about whether India will win the cup or not, who will be the top performers, etc. Well, the answers to these questions will eventually be answered as the tournament progresses. Adding to this excitement, the mega event also promises to have a significant impact on the Indian economy. But, how?

ICC Men’s Cricket World Cup 2023: An economic booster for Indian Economy?

According to an estimate made by a BQ Prime report and economists of Bank of Baroda, the Indian economy is likely to see a boost of $1.62 billion or $2.4 billion respectively which is a whopping sum of Rs13,500 crores.

Furthermore, estimations are also being made that TV and streaming viewership will likely generate a sum of Rs 105 billion to Rs 120 billion which includes TV rights and sponsorship revenue on a conservative basis. This sum of money is far larger than the sum of 552 million that was generated during the 2019 edition of the ICC Men’s Cricket World Cup held in England and Wales.

Why will the Indian Economy see a surge?

The ICC Men’s Cricket World Cup 2023 is being held across the length and breadth of the country. From the vibrant streets of Kolkata in the East, to the business of Ahmedabad in the West, or from the scenic mountains in Dharmshala in the north, to the coastal shores of Chennai, the tournament is being held across 10 major cities across India as fans celebrate the biggest carnival of cricket.

  • This signifies that fans from India and all over the world will journey in various directions to cheer for their respective teams. They’re securing match tickets, arranging accommodations in hotels or Airbnb’s, and savoring the renowned cuisines of each city, as each place boasts a diverse culinary offering.  Additionally, they’re venturing into the local tourist attractions, acquiring keepsakes and treasures unique to each state.
  • The aviation and hospitality sectors are also seeing a huge surge in benefits. Air traffic is increasing with a demand for more services in airports. Therefore, the companies that work with airports will remain busy during the tournament.
  • Hotels will also see a huge rise in benefits. An example can be derived from the hotel room prices for the India-Pakistan encounter in Ahmedabad. Prices are soaring in the skies and are 8 to 10 times more than the usual price. This is because a huge number of people are expected to witness this epic rivalry.
  • Economists have also predicted that since the ICC Men’s Cricket World Cup is being held in the country for the first time since 2011. It also lines up with the country’s festive season and therefore, this period is likely to see a surge in the retail sector and people are expected to make “emotional purchases on special items”.

Areas/cities in India that could see an economic boost soon

The direct financial factors where the ICC Men’s Cricket World Cup can impact the Indian economy are spending on airfares, hotels, stadium tickets, buying food and beverages, transportation, etc. Keeping these factors in mind, BQ Prime Research calculated the average per-person spending for five cities- Delhi, Kolkata, Mumbai, Chennai, and Ahmedabad. This was then used to calculate the average spending on all the 10 cities that are hosting the World Cup.

Attendees

100% occupancy was assumed for all the stadiums and based on this; the total number of attendees is expected to be around 24.8 lakhs. Data from the previous two World Cups were taken to calculate the percentage of guests. According to this, 20% are expected to be international guests, and 20% each are expected to be Indian’s from within and outside the city.

Attendees for the World Cup
Image Courtesy of India Times

Air Travel Costs

According to BQ Prime, air travel costs will include the travel expenses that an individual will take up which covers round-trip expenses to and from the hosting cities. Important to keep in mind- international travel expenses are not included as they will not flow to Indian airlines.

chart of airfare expenses
Image Courtesy of India Times

Hotel expenditure

The spending on hotel stay was calculated using the per night stay cost including all taxes for three-, four-, and five-star hotels.

chart of Accomodation expenses
Image Courtesy of India Times

Match tickets

This covers the price of match tickets that an individual will spend at each venue.

chart of match day tickets
Image Courtesy of India Times

Food and Beverages

This includes the spending on food and beverages per day in three-, four- and five-star hotels.

chart of food expenses
Image Courtesy of India Times

Intercity Travel

For intercity travel, expenses are included considering the round-trip between the airport and the stadium. An extra cost of Rs 350 is also included for each visitor for any additional expenses.

chart of intercity travel expenses
Image Courtesy of India Times

Direct Impact

If we total up all the factors mentioned above, the sum of all these costs will be the direct cost that a person will take up. However, it varies from city to city. If a fan is from within the city, then the average cost for these fans will be Rs 7,600 per match which will sum up to Rs 755 crore. The average costs for Intercity and International visitors are estimated to be around Rs 32,100 per match. This takes the total sum to Rs 4,781 crore.

chart of direct impact
Image Courtesy of India Times

Indirect Impact

According to BQ Prime, international tourists coming to India spend about 30% of their budget on airfares and the remaining 70% on tourism and associated expenses.  Therefore, the average round-trip costs for international travelers from the 9 participating is expected to be Rs 63,000.

Hence conclusions were drawn by the  BQ Prime report which suggested that international travellers are expected to spend around Rs 5,705 crore in India during the ICC Men’s Cricket World Cup 2023.

Conclusion

The total direct and indirect impact was calculated and it was around a whopping Rs 11,750 crore. On top of that, an extra 15% impact can be expected for other additional spending on merchandise sales which includes buying from local vendors. This was estimated by an economist who spoke vehemently on the economic surge that the Indian Economy is likely to see.

Considering all the factors, the total economic impact of the ICC Men’s Cricket World Cup 2023 on the Indian Economy is estimated to be around a whopping sum of Rs 13,500 crore or $1.64 billion at prevailing exchange rates.

However, economists have also predicted that the ICC Men’s Cricket World Cup may also lead to inflation. The reason is that the price rates of air tickets and hotel rooms have gone up during this time. Furthermore, due to the ongoing festive season, the costs of services in the informal job sector in the 10 host cities might increase as well.

Overall, inflation may rise between 0.15% to 0.25% in October and November. To conclude it can be predicted that the ICC Men’s Cricket World Cup will have a positive impact on the Indian economy rather than a negative one.

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