Why lifting PPKM could help sports industry score a revival

One day before New Year’s Eve, President Joko Widodo (Jokowi) announced his government’s decision to withdraw the implementation of community activity restrictions (PPKM).

There are no more restrictions on people’s activities and mobility, considering that herd immunity among Indonesian people has reached 98.5 percent in July 2022, he said at the Merdeka Palace here.

Nevertheless, he urged all parties to remain cautious and vigilant to avoid the transmission of new COVID-19 variants and the spike in infections in the future.

The decision came as a relief to all parties. The move to return people’s daily activities in all sectors to ‘normal’ or pre-pandemic levels, including the implementation of sporting events that have been carried out without spectators in recent years, came as a breath of fresh air.

The decision to bring the spectators back to the stadium was not only to enliven the games, but also to encourage the recovery of economic activities related to their implementation.

For example, it could increase demand for large and small entrepreneurs involved in clothing production, ticket sales, food and beverage businesses, as well as merchandise sales.

It is not difficult to imagine that if the matches could be watched directly by large crowds again, as before the COVID-19 pandemic, there would be a huge multiplier effect on the people’s economy.

The implementation of sporting events has the potential to fully revive economic activities in many sectors that have been paralyzed for about three years due to limited community mobility.

Back to normal in 2023

In other parts of the globe, the enthusiasm for sporting events has been completely revived for some time now. And it has a positive impact on other industries related to sports, for example, broadcasting and sponsoring businesses.

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The Global Sports Survey, conducted in 2022, found that 56 percent of people around the world are eager to watch sporting events – an increase from 43 percent two years earlier.

The recovery of the sports industry is also expected to reduce the impact of a global recession, which is projected to peak in 2023.

Based on the Global Sports Outlook 2023 published by the leading American financial institution Fitch Ratings, it was estimated that the economic value of the sports industry will return to the pre-pandemic ‘normal’ this year.

Although the global recession may reduce ticket sales, the financial institution has assessed that it will not significantly affect the contract value of sponsors and broadcasting rights.

In addition, Fitch Ratings observed that overall the sports industry performed well through 2022.

From another perspective, the implementation of major national and international sporting events can directly disrupt the recovery of other sectors, such as tourism.

The impact of tournaments on the tourism sector can be seen through the increase in hotel occupancy rates and transport ticket bookings.

One does not need to think further than the great impact of sold-out tickets in various places selected for the international competitions organized by Indonesia in 2023.

For example, the Pertamina Mandalika International Street Circuit, which hosts the MotoGP, Istora Gelora Bung Karno for the Indonesia Open BWF World Tour Super 1000, as well as the stadiums in the six cities that host the FIFA U-20 World Cup.

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The presence of spectators at the venues would also be an opportunity to boost the development of sports tourism, which could have greater multiplier effects on the tourism, sports and economic sectors.

In fact, the United Nations World Tourism Organization (UNWTO) recently noted that sports tourism is one of the fastest growing tourism sectors.

Need to fight the euphoria

Global travel activities have grown rapidly in recent decades. According to UNWTO data, 1.5 billion international tourist arrivals were recorded in 2019.

Meanwhile, when most countries implemented travel restrictions due to the COVID-19 pandemic, the international organization noted that the number of arrivals in 2020 and 2021 dropped to 406 million and 429 million respectively.

However, UNWTO estimates that the number of arrivals could grow to 65 percent of pre-pandemic levels by the end of 2022.

The recovery of international tourist visits in 2022 was supported, among other things, by the implementation of various international sports events, for example the 2021/31st SEA Games in Hanoi, Vietnam, from May 12 to 23, 2022.

The Hanoi Tourism Department reported that the Games helped draw about 700 thousand local tourists and 31,448 foreign tourists, although the host country had not fully relaxed travel restrictions at the time.

The implementation of the 2022 FIFA World Cup in Qatar was also successful in attracting many visitors.

According to FIFA, 2.95 million tickets were sold during the cup. The number surpassed the number of tickets sold during the 2018 World Cup in Russia, which stood at 2.4 million.

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In addition, the group stage match between Argentina and Mexico was attended by 88,966 spectators, making it the World Cup match watched by the most supporters in one stadium since the 1994 World Cup.

The record was created at a time when the pandemic was not completely over.

Therefore, the termination of PPKM could be an opening for a livelier and more encouraging implementation of sports events.

In addition to making sports competitions more interesting, it will increase the economic value of the sports industry and accelerate the recovery of the national economy.

The revocation of the PPKM will further increase the demand for sports equipment and various services that support the implementation of sporting events.

It seems that the implementation of various global sports events, such as the 2020 Euro Championship and the 2022 World Cup, indicates that life has begun to return to the pre-pandemic “normal”.

Nevertheless, as President Widodo emphasized, we must remain vigilant and cautious.

So the euphoria about watching the Games should not be excessive to suppress additional COVID-19 cases.

Therefore, the return of large crowds to stadiums must be accompanied by the implementation of strict health protocols as well as better security for the safety of everyone participating in and managing sports tournaments.

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