With Brisbane to bask in G20 glory well after the mega stars have gone, it’s time for the city to count the cost and announce the dividend, not least to those who put up with the barricades and traffic horrors of the seven day lockdown.
Topping the list on the cost side, are the ball park $200 million trading losses to businesses from interruptions over the period including the forced closure on Nov 14 of most across the entire Brisbane local government area and extra holiday pay to staff.
The city’s brains trust also used upwards of $30 million for its massive public relations exercise to ensure the world’s media sent in their A-teams and that once here, there were plenty of good news stories to tell.
Fortunately, Brisbane is spared the $500 million or so price tag for policing and security – including endless briefings and training exercises – that falls to state and federal authorities to meet.
Touted as a “once in a generation opportunity” to raise awareness of the city’s attributes to the world, the object of strategists was to bring worldwide exposure and set up lasting relationships to exploit economic benefits for decades into the future.
Initial reports suggest the officially estimated $100 million boost to tills of local retailers, hotels and restaurants, was fanciful. The cash splash is likely to come in well short of half that sum and was restricted in the main to accommodation providers.
But what of the hyped future gains in tourism and business from the worldwide exposure of our lifestyle, art, geography and industry. And how much long term investment from our new best friends can we actually expect?
That there is some economic benefit to the much wider recognition of the name of a previously unheard of city is not disputed.
Think of Innsbruck, Sochi, Lillehammer and Nagano which were relatively unknown outside their own nations before hosting their winter Olympic Games.
But the lasting economic benefits from “mega-events” like the G20, is a subject of serious dispute among economists.
Studies investigating intangible concepts like “exposure” and “recognition rely very much on assumptions so precise results remain elusive.
The cost benefit analysis of the 2012 London Olympics is still ongoing but for Atlanta, its hosting of the Summer Olympics in 1996 produced a reported 35% increase in the value of tourism to the city.
In a 2004 paper entitled, “Economic Multipliers and Mega-Event Analysis,” Professor Victor Matheson of Maryland University contends that pre-event economic impact studies have a tendency to overestimate how much a one-time attraction like the G20 leaders’ summit will contribute to the local economy.
“As Vancouver found out when it hosted the 2010 winter games — and as Munich, Montreal and Moscow and others did before — estimates can be just that: a best guess, subject to the rough edges of reality.”
A G20 is not in the same league as an Olympics and even for its hosts cities, some have been left to add up large losses on their investments, for a long time after the luminaries vanished
In Brisbane’s case there will no doubt be future financial gains from exposure, recognition and relationships. But none of that will recompense businesses who have taken a direct hit to their bottom line from loss of production during the event.