G20-Expo comparison is weird – Expo was a positive economic shock, G20 is a negative one for Brisbane

The Science and Technology Minister’s comparison of G20 to Expo is weird (see the Brisbane Times report G20 will give Brisbane an Expo 88 boost – Minister). I won’t deny there might be some long-term benefits from connections made and deals brokered at G20 side events, or that participating in the G20 is in Australia’s national interest, but it’s pretty obvious to me that the short-term impact of the G20 on Brisbane will be largely negative, while the impact of Expo was hugely positive.

Based on what many of my friends are up to, and on anecdotal reports from holiday destinations on the Gold and Sunshine Coasts and at Byron Bay, there will be an exodus from Brisbane over the G20 long weekend. I expect the negative economic impact of this exodus on Brisbane will more than offset any economic boost from visiting G20 leaders, their entourages and hangers-on. Contrast the expected impact of G20 with Expo 88, which had millions of visitors, and saw huge flows of people into Brisbane from elsewhere in Queensland, Australia and across the world. G20 is an event for a tiny global elite, while Expo was an event for the masses.

Furthermore, Expo has had huge, long-lasting impacts through the transformation of what was formerly a largely industrial area into a vibrant recreational precinct, South Bank.  I doubt the impact of G20 on Brisbane will be as long-lasting.

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12 Responses to G20-Expo comparison is weird – Expo was a positive economic shock, G20 is a negative one for Brisbane

  1. KT says:

    The only positive impact is the over-time paid to Police officers!

  2. Jim says:

    Gene

    I find it amazing that such a dubious claim about the benefits of the G20 has come from the Science Minister. Surely a Science Minister would be…. well….. more scientific…. and think about these things before making such claims.

    I also found his claim of a $100 million immediate injection into the economy more than a little optimistic. With 7,000 delegates, staff and reporters, that equates to about $15K per person for a few days. Sounds like economic BS to me.

    How much benefit will actually be captured in the short term? It is the economic surplus captured by local businesses that matters. Delegates are mostly just crowding out visitors that would have come if they could get a room.

    The little bit of anecdotal intelligence I’ve received is that the benefits are pretty negligible. For example, I know a manager of a hotel that will be hosting G20 visitors. Their occupancy rate is typically 85-90% over the weekend at this time of year anyway due to a lack of 5-star capacity in Brisbane. Their hotel with 100 rooms is expecting profits from accommodation to be $6,500 higher than they would would have been without the G20. Overall that averages out at $65 per delegate. They are expecting similar increases in profits from the increased food and beverage sales.

    If that hotel is typical fro Brisbane, then the actual increase on profits from room takings in Brisbane attributable to the G20 is less than $0.5 million in total. Clearly the tourism sector is not getting a big benefit from the G20 in the short term. And I doubt the long-term benefits will be much better. TV images of men in grey suits getting out of black cars and going into a conference centre does not a tourism campaign make.

    • Gene Tunny says:

      Great comment, Jim. I might make use of some of that info later this morning when I chat with Steve on 612 ABC Brisbane.

    • Mark Beath says:

      Good comment Jim. There was a recent report of a large increase in RevPAR for hotel accommodation in Cairns in September when the G20 finance talkfest was held. Higher room rates and occupancy would be expected but not sure the temporary higher room rate will have much flow on economic benefit? That meeting also coincided with the first weekend of school holidays and two prominent hotels, Rydges and Holiday Inn, were booked out with large police contingents. Feedback from a Holiday Inn staffer was that staff hours were cut over the weekend as in-house spend such as the restaurant slumped with the police replacing tourists. Perhaps the police just didn’t like the food specials the H.I put on for them? That event was obviously less disruptive than Brisbane but my observation and anecdotal feedback even so was that the city was generally relatively quiet and trade subdued. There were obvious exceptions to that with the Cairns Chamber CEO emphatic it had been a busy weekend because the bar at the Shangri-La had been going off. Well, der!

  3. Mark Beath says:

    When G20 was first announced there were many ridiculous media reports sourced from a South Korean organisation which included brand revaluations for SK corporations, risk premium reduction re North Korea, and infrastructure spending. There also seem to me to have been infrastructure spending here in Australia which is really not directly related to G20 at all I have a personal tale. Recent electrical infrastructure work between the Cairns CBD and hospital was conducted with drilling and associated works on the footpath outside my unit building. This pretty much destroyed the footpath and nature strip. As our body corporate representative I followed up and found this was a G20 project for new streetlights and underground power near the hospital. I’m not sure why it was a G20 project unless it was felt that delegates may not be able to navigate from the CBD to hospital emergency after a night out? Never mind it ended up with a footpath meeting between myself and nine (9) delegates from Council, Ergon Energy, a contractor, and sub-contractor to determine who was responsible and what would be done to rectify the damage. After the personal time I have spent on it I just hope it gets included in G20 costs!

  4. Jim says:

    There must be some pretty serious price gouging going on by some contractors doing stuff for the G20. I for one, will be investing an a barrier fence company as soon as possible. Why?

    There is a story in the Brisbane Times today. The security bill for the G20 is $100 million. The cornerstone of the security is 6,000 police and soldiers, but we are still making them ride push bikes!! Even if we assume the additional police are on overtime and all require accommodation and consumables to be supplied, this accounts for only $20-25 million at most (including the event in Cairns).

    Throw in a few helicopters, and that might add another $20 million.

    So did the guys supplying the fence and other security contractors really get paid $60 million?????????

    I would have thought the organisers of global conference focussing on economics in a time of extreme austerity would have been a bit more focussed on value for money.

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