In South Asia, cricket is a great unifier. Families, friends and acquaintances come together to cheer for their team. Companies often organise outings/tours around matches for their employees. The city in which the match is being hosted sees stadiums, restaurants, bars and even the streets buzzing with excitement. The ICC Cricket World Cup being hosted in India promises to bring all that excitement, along with an economic boost. We call it “cricketonomics,” the economic impact that the ICC Cricket World Cup brings, beyond the pitch.
Ripple effects in local economies are manifold. Apart from the short-term boost in revenues, sporting events help put destinations on the map of both domestic and international tourists. Investment in stadium capacity, infrastructure and logistics have multiplier effects on growth as the money spent ripples onwards through the economy. When the ICC Cricket World Cup comes to a large country like India, matches are played across cities. The location of the most popular matches are sometimes determined by stadium capacity and facilities, benefitting those local economies more than others.
The ICC Cricket World Cup being hosted in India promises to be a thrilling melange of sports, entertainment, emotions and much more. This deluge in activity is expected to lead to increases in consumer spending across industries, particularly hospitality – hotels, restaurants - sports and merchandise stores. Enthusiastic fans from overseas are also expected to travel to cheer for their teams.
History is often a great predictor of what is to come, and to understand the potential impact of the ICC Cricket World Cup, it’s useful to look at previous series. Our analysis finds that the IPL series played earlier this year led to an increase of 25% in in-person average daily spend in restaurants during match days vs. non-match days. The ICC Men’s T20 World Cup hosted in Australia in 2022 saw a surge in cross-border spend by South Asians travelling to different cities across the country where matches were hosted. Hotels, restaurants and sporting stores benefitted.
The ongoing ICC Cricket World Cup in India is expected to be a blockbuster event for economies, retailers and of course, all of us! May the best team win!
City of Ahmedabad ready to defeat the favourites - Mumbai and Delhi
Background for cricket newbies!The Indian Premiere League (IPL) is a cricket league in India which follows the twenty over match format called Twenty20. This year it was played from March 31-May 29 between ten teams that all together played 74 matches across 12 cities [1] in the country. Each team plays seven matches in its home stadium and seven matches elsewhere. Chennai and Ahmedabad both hosted the knock-out matches post the league stage and Ahmedabad hosted the finals this season.
More matches, more swipes - cricket, food and much moreThe IPL frenzy brings along with it a cocktail of adrenaline rush, dopamine and more. Watching the match at home with family or out at a bar with friends or at the stadium warrants an extra slice of pizza, a bag of popcorn or just a cold drink! A meal to follow the match to celebrate or console depending on your team’s performance often takes one to their favourite eatery or to order takeout. A single match can witness a conflicting bag of emotions – from hope to despair in minutes.
Mastercard aggregated and anonymised data shows an increase of 25% in in-person average daily spend in restaurants during match days vs. non-match days [2] . Increased activity enabled by the desire to go out is probably the biggest driver of this increase. Mumbaikers and Delhites lead this increase, in sync with eating out being more popular in the bigger cities. Commuting distances might also warrant a pit stop at a restaurant after work to watch the match or from the stadium to back home.
Moreover, the finals hosted in Ahmedabad in the Narendra Modi stadium, which can house more than 130,000 people, led to an additional ~5 percentage point growth in spend in restaurants vs. what was seen during the other matches played in city.
Chart 1: Growth in spend in restaurants/bars during matches
SOURCE: MASTERCARD ECONOMICS INSTITUTE
IPL results in an overall boost to the consumption economy. In order to capture the impact (outperformance) [3] of IPL on spend, we have created a synthetic index of cities [4] using PhonePe [5] data. The quarter in which IPL was played – Q2 of 2023 -- saw an outperformance in spend of nearly 1.3% of total spend in that quarter from the IPL cities vs. the outperformance that was seen in the last 4 quarters in which IPL wasn’t played. Bengaluru, Ahmedabad, Chennai and Delhi were amongst the cities that recorded the highest outperformance. Ahmedabad and Chennai could have benefitted as the knock-out matches after the league stage were played in both these cities and the finals were played in Ahmedabad.
Chart 2: Synthetic city outperformance in spend
The cricket-crazy nations of South Asia often see fans travelling overseas to watch matches. One major cricketing event, the ICC T20 World Cup, took place Oct. 16 - Nov. 13, 2022 in Australia.
Pent-up demand as borders were opening in Asia, coupled with the lure of being amidst all the excitement and cheering for your team boosted travel.
Aggregated and anonymised Mastercard data suggests an increasing growth in spend [6] in hotels and restaurants from the beginning of October by outbound travellers from South Asia, peaking in the first half of November 2022.
Timeline – Sixers to ducks of spendingLooking at spend across cities in Australia, the peaks and troughs in spending track the matches:
Chart 3: Growth in spend vs. 2019 across cities in Australia
Jerseys, bats, balls, stumps driving spend!Sporting-toy stores were the biggest beneficiary of the World Cup with growth in spend during the event vs. the same days in 2019 and vs. rest of 2022 showing large increases. Providing some insights into behavioral economics, spectators often indulge in buying sports paraphernalia. These could comprise merchandise and other items sold in small stores or from vendors near stadiums that are often used to cheer during the match, as well as mementos, memorabilia and sports equipment to carry home.
The large number of matches being played in Adelaide resulted in the city’s outperformance in spend on hotels, restaurants and sport stores relative to the other cities. Melbourne saw a fall in spend in hotels vs. the same days in 2019 possibly due to a high base, while showing high growth vs. the rest of 2022.
Chart 4: Growth in spend across industries by city
Note: more bats higher growth, more stumps lower growth
As we enjoy the coming days of the ICC Cricket World Cup, we leave you with a few concluding thoughts. As early as August 2023, hotel prices in Ahmedabad (where India vs. Pakistan and the finals will be played) had surged 10 times, as seen on Google searches and hotel aggregator websites. Hotels across categories, from luxury to budget, are expected to be fully booked. The comparative advantage of hotels, restaurants, and local authorities in Ahmedabad vs. other cities is worth considering.
International travel corridors which offer a direct flight connection to cities where key matches are being played for example, Dubai to Lucknow, with Lucknow hosting the India vs. England match, could see large inbound tourism inflows – once again benefiting airports, hotels and local economies in these cities. Restaurant and bars could see a surge in spending across the country as could merchandise/sports stores.
Synergies through tourism could help position cities as tourist destinations not only during the event but after as well. This would provide a boost to local businesses and the economy and help reposition the destination, acting as a catalyst for long-term change.
Footnotes
1 Ahmedabad, Bengaluru, Chennai, Delhi, Dharamshala, Guwahati, Hyderabad, Jaipur, Kolkata, Lucknow, Mohali, Mumbai
2 event period: IPL matches +/-1 day in respective cities, comparator set: June - July 2023
3 Outperformance – spend in cities that matches were played vs. spend in synthetic cities
4 Cities similar in population and number of Phonepe users to the cities in which the matches were played. Synthetic index of cities is calculated based on a modelled outcome of a city’s spend activity over a period, if not for the existence of a certain event.
5 Phonepe is India’s largest digital platform with 46% of UPI (Unified Payments Interface) market share. https://www.phonepe.com/pulse/about-us/. UPI is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing & merchant payments into one hood. It also caters to the “Peer to Peer” collect request which can be scheduled and paid as per requirement and convenience. https://www.npci.org.in/what-we-do/upi/product-overview
6 Indexed to the same month in 2019
About the Mastercard Economics Institute
Mastercard Economics Institute launched in 2020 to analyze macroeconomic trends through the lens of the consumer. A team of economists, analysts and data scientists draws on Mastercard insights - including Mastercard SpendingPulse™ - and third-party data to deliver regular reporting on economic issues for key customers, partners and policymakers.
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