Factbox: How hosting Euro 2024 could impact the German economy

Stroeer SE & Co KGaA

14/05/2024 09:15

By Rene Wagner
       BERLIN, May 14 (Reuters) - Germany will be hoping for
sporting success as host of the 2024 Euros soccer championship
kicking off in a month's time, but it will also be looking for a
consumption boost from all the fans guzzling beer and staying in
hotels and rented rooms.
    Europe's largest economy is expected to grow around 0.3%
this year, slower than other large industrialised countries. The
following is an overview of how the tournament could give it a
welcome boost.
    
    WHO CAN HOPE FOR BETTER BUSINESS?
    There are 2.7 million tickets available for the four-week
event from June 14 to July 14. The hosting venues Berlin,
Munich, Cologne, Dortmund, Duesseldorf, Frankfurt,
Gelsenkirchen, Hamburg, Leipzig and Stuttgart can expect a rush
of domestic and foreign guests.
    "People are more active when it comes to travelling, for
example going to major events and concerts by international
stars," said Norbert Kunz, Managing Director of the German
Tourism Association (DTV).
    "It could well be that 2024 will be a new record year for
tourism in Germany – also thanks to the many enthusiastic
football fans who want to experience this event live."
    Breweries can also expect a boost.
    "Large football events in the past have shown that more beer
is drunk during the tournament than is normal in the summer
weeks," said Holger Eichele of the German Brewers Association.
During the 2006 World Cup, which Germany also hosted, beer sales
rose around 5% before and during the tournament.
    That would be especially welcome as 2023 was a difficult
year for the beer industry, with sales in the country falling by
4.5% to 8.4 billion litres, continuing a long-term downtrend,
according to government data. 
        
     WILL THE TOURNAMENT CREATE A CONSUMPTION BOOM?
     "The experience of the World Cup in 2006 shows that major
sporting events are not economic fireworks," said Michael
Groemling of the German Economic Institute (IW).
    Many consumers are likely to use the tournament as an
opportunity to buy a new television or drink an extra beer.
    "But they save money elsewhere: bratwurst instead of a
restaurant, a TV evening instead of going to the cinema," said
Groemling. "As a result, consumer spending is not necessarily
increasing but rather shifting." 
    Commerzbank economists say the economy could stagnate in the
second quarter - which includes the first half of the tournament
- after growing by 0.2% from January to March.
    
    WHO ELSE COULD BENEFIT? 
    Retail sales could receive a consumption boost if the home
team does well on the pitch, said a spokesperson for the
industry association HDE.
    "Only if the German national team survives the first phase
of the tournament can consumer sentiment also benefit,” the
spokesperson said. Grocery stores tend to do well during major
sporting events as fans stock up on drinks and food while
watching together.
    The booking portal AirBnB  ABNB.O  expects the Euros to
provide an additional tailwind for the rental of holiday
apartments.
    The advertising space marketer Stroeer  SAXG.DE  also
expects a boost, as well as sporting goods manufacturer Adidas.
World market leader Nike  NKE.N  has nine teams under contract
at the European Championships, Adidas  ADSGn.DE  six and Puma
 PUMG.DE  four.
    
    WHAT ABOUT GERMANY’S IMAGE?
    "A major sporting event can brighten the mood and improve
the image of the host country," said the IW's Groemling,
speaking about its allure at a time when foreign direct
investment into the country has fallen.
    "At the same time, the economy is shaped by expectations and
moods - the emotional return from the EM should not be
underestimated."

 (Reporting by Rene Wagner; Writing by Matthias Williams;
Editing by Hugh Lawson)
 ((matthias.williams@thomsonreuters.com;))