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Introduction
FIFA World Cup is one of the largest soccer tournaments in the world. It is scheduled to occur in 2022, and the host country will be Qatar. The FIFA World Cup is one of the prestigious and widely popular sports events, which gives a hosting nation a number of benefits. These include improving the brand image of a country, increasing the inflow of tourists across the globe, and an opportunity for Qatar to present its hospitality and inner traditions.
The Economic Impact of Qatar Hosting the FIFA 2022 World Cup
Economic Impact
It is important to note the fact that hosting any major sports events, such as the FIFA World Cup, is highly expensive, and it requires an allocation of large amounts of resources. According to estimations, Qatar is planning to spend a total of $200 billion on hosting the given event (Fattah). Evidently, this will be a major budget expenditure, which will have an impact on the countrys economy.
Impact on Real Estate Before and After the World Cup
However, allocating the budget funds can pay off in the long run due to the fact that real estate value might increase with a growth in the influx of foreign money. In addition, new tourists and investors will get an opportunity to see and evaluate Qatars infrastructure. It can significantly raise the prices of real estate in the region because the demand for these assets will grow.
Impact on Banking
In addition, hosting the FIFA World Cup will also mean that foreign tourists and potential investors will exchange their currencies for Qatari riyal. The main reason is that besides buying tickets for the event, tourists will also spend on hotels or rent, food, and other expenses. This process will inevitably occur through Qatars central banking system. Thus, there will be a substantial demand for the local currency, which will strengthen and make it more valuable.
Challenges During World Cup
The major challenge for Qatar hosting the FIFA World Cup is the fact that the country needs to complete all construction and related projects on time. The critical segments of infrastructure need to be adjusted for easy navigation of visitors. The units of the event monetization must be put in place in order to increase the potential returns in terms of profit because a certain part of allocated resources should be regained.
Risk of FIFA
Moreover, it is important to understand that there are a number of risks associated with hosting the FIFA World Cup in Qatar. Firstly, the hosting nation consists of a Muslim majority with Islam as a state religion. Therefore, there can be certain controversies regarding alcohol, LGBT, and qualification issues of teams from Israel. Secondly, the weather in Qatar is especially hot, which needs additional expenses to eliminate the given problem.
FIFA Regional benefits
Business Tourism
Qatar, as a hosting country, and other Gulf Cooperation Council (GCC) members can greatly benefit from an increased influx of business tourism. This means that a certain number of visitors will not only visit these nations to be a part of the FIFA World Cup but also conduct specific business-related activities. These individuals will seek out potentially profitable and prospective deals in the region, which can be considered as a foreign or outside investment.
Hotel Rooms
In addition, the event can significantly impact the local hotel business in the GCC region. FIFA World Cup takes several days to be completed, and thus, all visitors will need a place to stay. It is highly important for hotels in Gulf countries to be fully prepared for a substantial increase in demand for hotel rooms in order to maximize the profits and leave a great impression of hospitality on visitors.
Retail Shops and Transport
Shopping and transportation are other major business segments that will be directly affected by the growing influx of tourists. Many people will actively shop in Qatar and other GCC countries to not only purchase basic necessities but also experience the local food. In addition, visitors will need transportation in order to attend the event and tour across the nation for sightseeing. Therefore, it is critical for the transportation system in the Gulf region to meet the demand of potential event attendees.
Labor Market
In order to properly serve the needs of all people visiting GCC countries for the FIFA World Cup, the labor market will expand. It is due to the fact that local businesses, such as hotels, shops, and other event-related organizations, will experience a certain increase in demand for workers. Therefore, new jobs and vacant positions will have to be filled, which will, directly and indirectly, affect the labor market.
Conclusion
In conclusion, the FIFA World Cup 2022 will incur costs, risks, and benefits to Qatars and GCCs economy, infrastructure, and the local environment. The economic impact is manifested in the fact that a large sum of money will be spent on hosting the event with a possibility for return on investment. Local banks and real estate can increase their assets because tourists will need Qatars currency, and foreign investors might show interest in the regions real estate. However, there are a number of risks and challenges of hosting the FIFA World Cup for Qatar, such as completing all projects on time and adjusting local policies for foreigners. In addition, there are potential benefits in terms of hotels, business tourism, retail shops, transportation, and the labor market.
Work Cited
Fattah, Zainab. Qatars $200 Billion Dash to World Cup Hits a Construction Cliff. Bloomberg, 2019, Web.
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