Why raising PPKM could help the sports industry revive

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

There will be no more restrictions on people’s activities and mobility, given that collective immunity among Indonesians has reached 98.5 percent in July 2022, he said at the Merdeka Palace here.

However, he asked all parties to remain cautious and vigilant to prevent the transmission of new variants of COVID-19 and a sudden increase 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, which have been held without spectators in recent years, has come as a breath of fresh air.

The decision to allow spectators to return to the stadium was not only aimed at reviving the matches, but also at stimulating the recovery of economic activities related to their implementation.

For example, it could increase demand for both large and small businesses involved in apparel manufacturing, ticketing, food and beverage, and merchandise sales.

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

The implementation of sporting events has the potential to completely revive economic activities in many sectors, which were paralyzed for about three years due to limited community mobility.

Return to normal in 2023

In other parts of the world, enthusiasm for sporting events has been fully revived since some time ago. It has also had a positive impact on other sports-related industries, for example, broadcasting and sponsorship.

The 2022 Global Sports Survey found that 56 percent of people around the world avidly watch sporting events — up from 43 percent two years ago.

The revival of the sports industry is also expected to soften the impact of the global recession, which is predicted to peak in 2023.

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

Although the global recession could reduce ticket sales, the financial institution estimated that this would not significantly affect the value of sponsorship and broadcast rights contracts.

In addition, Fitch Ratings noted that the sports industry generally performed well during 2022.

From another perspective, the implementation of major national and international sporting events could directly stimulate the revival of other sectors, such as tourism.

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

One needs to think no further than the huge impact of sold-out tickets at the various venues selected for the international competitions to be hosted by Indonesia in 2023.

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

The presence of spectators at the arenas would also be an opportunity to strengthen the development of sports tourism, which could have greater multiple effects on the tourism, sports and economy sectors.

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

Euphoria should be curbed

Global tourism 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 imposed travel restrictions due to the COVID-19 pandemic, the international organization revealed that arrivals in 2020 and 2021 fell to 406 million and 429 million respectively.

However, the UNWTO estimated that arrivals could rise to 65 percent of pre-pandemic levels by the end of 2022.

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

Hanoi’s tourism department reported that the games helped attract some 700,000 local tourists and 31,448 foreign tourists, although the host country did not fully ease travel restrictions at the time.

The implementation of the 2022 FIFA World Cup in Qatar has also been successful in attracting a large number of visitors.

According to FIFA data, 2.95 million tickets were sold during the Cup. The figure surpassed the number of tickets sold during the 2018 World Cup in Russia, which was 2.4 million.

Furthermore, the group stage match between Argentina and Mexico was watched by 88,966 spectators, making it the World Cup match with the largest stadium attendance since the 1994 World Cup.

The record was created at a time when the pandemic had not yet completely ended.

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

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

The abolition of PPKM will further increase the demand for sports equipment and various services accompanying the implementation of sports events.

The implementation of various global sporting events, such as the 2020 European Championship and the 2022 World Cup, seem to indicate that life is beginning to return to pre-pandemic ‘normal’.

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

Therefore, the euphoria around watching matches must not be excessive in order to suppress additional cases of COVID-19.

Therefore, the return of a large number of people to stadiums must be accompanied by the implementation of strict health protocols as well as better security for the safety of all those who monitor and manage sports tournaments.

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