India loses World Cup, but local businesses win big as tourist spending soars by 400%

NEW DELHI: Team Australia may have triumphed in the ICC Men’s Cricket World Cup last month but the Indian economy emerged as a winner as well, with local businesses such as restaurants registering up to 400% increase in spending by foreign tourists during the tournament, said a Mastercard Economics Institute report shared exclusively with ET.

“Australia had a better game on the day of the finals and took home the trophy. The other winner was the Indian economy,” said the report titled 'ICC Cricket World Cup: A boost to India’s economy’.

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“From small businesses, local eateries, mom and-pop stores, budget hotels to luxury accommodations and fine-dining restaurants – the multiplier impact of the ICC World Cup on the Indian economy has been an all-round win, underscoring the importance of sporting and other major cultural events on local and national economies,” said the report.

Quick-service restaurants in host cities saw an average increase of over 300% in spending by foreign tourists, or "cross-border spends", for three key matches – India versus Pakistan, India versus England and the final clash between India and Australia – compared to regular days, according to the report. The uptick in spending by foreign tourists was seen one day prior to the match, through the match day and a day after the match, it said.

For measuring cross-border spends, the report considered tourists from the United Kingdom, Australia, New Zealand, Bangladesh, Afghanistan, Netherlands, Sri Lanka, South Africa, United Arab Emirates and Singapore.

Gautam Aggarwal, division president, South Asia at Mastercard, said when the ICC World Cup comes to a cricket-loving nation like India, it is bound to leave an impact beyond the stadium.

“This report by the Mastercard Economics Institute examines that impact by evaluating the surge in cross-border and domestic spending by fans on travel, food, and hotels. During some of the key matches featuring team India, in-person restaurant spends increased by a whopping 400%,” Aggarwal told ET.

Domestic spends on online food delivery also saw a sharp increase of more than 100% on average compared to a normal week in Ahmedabad, Delhi and Mumbai for the two matches played in Ahmedabad, as per the report.

It said hotels and restaurants in the host cities of Ahmedabad and Lucknow and metros of Delhi and Mumbai saw incremental spends of Rs 2.3 crore around match days, a 36% increase compared to normal days, through both domestic and cross-border spends.

“For a robust economy with strong fundamentals, tournaments like these can act as a booster shot, as they go on to energise small businesses that power the local economy. Indeed, this year’s World Cup gave a significant impetus through cross-border spends in cities, such as Ahmedabad and Lucknow,” said Aggarwal.

Mastercard said its aggregated and anonymised data showed that the accommodation and food industries were the biggest beneficiaries as cricket fans from the country and around the world got together to cheer for their respective teams.

While the base for measuring the increase in cross-border spends during the India versus Pakistan match was a week earlier, for the India versus England match and the final it was two weeks earlier, since in the preceding week it was Dussehra and Diwali respectively.

During the much-awaited India versus Pakistan clash, in-person restaurant spending by foreign tourists (excluding on fast food) increased by 400% in Ahmedabad, although quick-service restaurants also benefitted, with tourists boosting spend by 40% in Ahmedabad. Domestic spend on online food delivery surged nearly 300% in Ahmedabad and roughly 30% in Mumbai.

During the final clash between India and Australia, hotels in Ahmedabad witnessed an increase of 56% and 52% by foreign tourists and domestic travellers respectively. Expenses on eating out increased manifold, with cross-border, in-person spending in quick-service restaurants surging more than 200% and in restaurants (excluding fast food) more than 100%, according to the Mastercard report.