PORT ELIZABETH, South Africa – With crisp white roof panels resembling wind-blown sails, the new Nelson Mandela Bay Stadium is a $270 million example of how the world’s largest soccer tournament is helping stave off recession in South Africa.
The 48,000-seat venue, which sits across from factories and homes on a lake near the city center, will host eight soccer matches beginning June 11, when the FIFA World Cup comes to Africa for the first time. In the two years before construction concluded last May, the stadium provided almost 7,000 jobs.
For Port Elizabeth, a charming coastal city home to a large sea port and seven major auto makers including Volkswagen, Toyota and General Motors, the timing couldn’t have been better. The South African car market contracted by 27 percent last year, leading some companies to lay off workers.
GM now has about 1,000 employees at two soon-to-be-consolidated plants. They will produce nearly 30,000 light trucks in two models this year, up 5-7 percent from 2009 but a far cry from the nearly 75,000 vehicles the plants churned out in 2005, GM officials said.
With the auto industry woes, gearing up for the tournament has provided a burst of energy for the local economy, said Putko Mafani, World Cup marketing director for Nelson Mandela Bay, the metropolitan area of 1.3 million people anchored by Port Elizabeth.
In the short-term, the new stadium will employ thousands of workers, and nearby businesses will see a spike in tourist patronage, he said. South Africa expects more than 400,000 guests, and Americans have bought more tickets than fans from any other country.
Looking longer term, Nelson Mandela Bay will be left with an upgraded airport, better roads and a state-of-the-art venue for concerts, religious gatherings and hopefully (Mr. Mafani is keeping his fingers crossed) a soccer club from the country’s premier league.
Port Elizabeth’s story is common across the country. Most major cities, from Durban to Cape Town, and nearly every business sector, from hospitality to logistics to private security, have received government funds for improvements to welcome the influx of soccer fans from around the world.
Atlanta is one of 18 cities included in the U.S. World Cup bids for 2018 and 2022. Since hosting the Summer Olympics in 1996, the city has solidified its credentials for hosting big sporting events.
But it wasn’t always so. Before the Games, many didn’t think Atlanta could pull off the event. The city had to improve infrastructure and public safety. Every effort was made to help visitors see the city as a destination for global business.
Similarly, South Africa hopes to use the World Cup to showcase its business opportunities and overcome stereotypes, said Donald Gips, U.S. ambassador to South Africa. Crime and corruption are often cited as hurdles for doing business in the country.
“I think South Africa, while being a very complex country, it’s a beautiful country,” he said. “The more we can help show Americans the full picture of South Africa the better.”
Infrastructure investment by the South African government limited the length of its recession in 2009 while laying the foundation for incremental growth in the 3 percent range over the next few years, the ambassador said.
Upgrades include new stadiums, better railroads, “beautiful new airports” and a desperately needed metro system for Johannesburg, the Gautrain, which probably won’t be completed before the tournament, said Mr. Gips.
“(The investment) helped cushion the blow of the global downturn, and now consumer demand is starting to pick up here and business inventory is starting to pick up,” the ambassador said. “As the global economy turns around, the commodity piece of the South African economy will kick in as well.
Resource-rich South Africa has thriving financial markets and advanced technological infrastructure, but its first-world economy in some areas contrasts with third-world poverty in others. Although its $300 billion gross domestic product accounts for about 30 percent of Africa’s economic output, unemployment is chronically high, presenting problems for the government, which plays an influential role in the economy.
United Parcel Service Inc., which offers package delivery services and freight forwarding for importers and exporters in South Africa, will benefit directly from the billions of dollars in infrastructure investment, said Thore Saether, head of operations there.
South Africa’s government has long planned improvements, but the World Cup was a “great catalyst” for turning talk to action, Mr. Saether said.
“There seemed to be a lot of government views and ideas on what to do,” said Mr. Saether. “(The World Cup) just got everyone focused on dates and times, and they’ve moved on them.”
In Johannesburg, the seat of about half South Africa’s industry, it’s tough to find a roadway untouched by renovation, especially near Soccer City, a 95,000-seat stadium that will host the opening matches and the finals.
In the township of Soweto, hundreds of workers in hard hats and blue uniforms are putting the finishing touches on the venue, which has been remodeled with an earthy red and brown exterior to evoke the calabash, a gourd traditionally used as a bowl.
Many construction workers are coming from other sectors hit hard by the downturn, like mining, saidSebastian Mathews, a South African consultant and Georgia State University alumnus.
South Africa has the world’s largest platinum reserves and production. The metal is used in catalytic converters, which are standard issue in U.S. cars since the 1970s. When U.S. auto sales plummeted, so did jobs at platinum mines, Mr. Mathews said.
In a country where the unemployment estimates range up to 40 percent, the World Cup investment was timely, he said.
“The recession was something we watched on TV. We didn’t see it,” Mr. Mathews told GlobalAtlanta. “Our stimulus package was called the 2010 World Cup.”
For shop owners at the Maponya Mall, that boost hasn’t yet come. The modern retail complex, opened in 2007, saw many boutiques close as consumer spending dried up during the recession, said Palesa Mzizi, the mall’s marketing manager.
Black business magnate Richard Maponya built the mall in Soweto, a township formed when blacks were forcibly relocated from other areas of the city by the apartheid regime. The idea was to uplift a disenfranchised people.
“We wanted to build a place which was aspirational for the black people, to let them know that they didn’t have to leave their home to take part in the growth of South Africa,” Ms. Mzizi said.
Most nearby residents still can’t afford to shop there, but all of Maponya Mall’s nearly 200 stores are black-owned, and they employ hundreds of workers.
During the monthlong World Cup, the mall will stay open 24 hours a day. It expects to double December sales figures, which are usually 25 percent higher than other months because of the Christmas holidays, Ms. Mzizi said.
The Hyatt Regency Johannesburg, a five-star hotel located in Rosebank, a swanky district of shopping malls, hotels and restaurants, foresees a similar upswing after a difficult period.
“It’s going to be big for us,” Jann Gillet, the hotel’s France-born general manager, said of the World Cup.
Sports network ESPN has reserved 150 rooms for the duration of the World Cup, boosting occupancy rates that had slipped from nearly 90 percent to 60-65 percent from the economic doldrums of 2008 to the collapse of 2009, Mr. Gillet said.
An overwhelming proportion of hotel bookings recently have been made by Americans: 83.29 percent, to be exact, he said.
“I didn’t know that Americans liked football that much,” he added jokingly. While ticket sales in Africa and Europe have been lower than expected, they have surged in the U.S., possibly thanks to the U.S.team’s good showing in the Confederations Cup, another FIFA tournament held in South Africa last year.
Still, not all in the tourism industry are looking forward to the World Cup kickoff.
Mary Brooks runs Try Africa Tours & Conferences, a travel company in Johannesburg that brings women, mostly American, to South Africa for “wellness journeys” focusing on spa treatments and other leisure outings.
She has turned down World Cup business. Ms. Brooks, who travels to Atlanta every year to visit her daughter and promote her business, is advising her clients to wait until the high prices of flights and accommodations have subsided.
“Unless they are die-hard soccer fans, I would encourage them to schedule a trip when they could do more and spend more time for less money,” she said.
For South African Airways, bookings from international travelers are tracking ahead of expectations, but domestic bookings are slightly behind, said Ian Cruickshank, head of the airline’s World Cup preparations.
The state-owned flagship carrier, has flights from Johannesburg and Cape Town from New York andWashington via Dakar, Senegal.
Delta Air Lines Inc. offers daily nonstop flights to Johannesburg from Atlanta all year. The airline is adding a second flight for 15 days during the World Cup.
“We expect flights will be very full for summer travel to Johannesburg based on the strong demand trends we continue to see in the market,” said Delta spokesman Kent Landers.