Friday, February 19, 2010

Oops! Fifa Concedes 2010 Ticket Gaffes

Fifa and South Africa and some of those in the travel industry clearly overestimated the global demand for high-priced tickets as part of high-priced trips to the 2010 World Cup.

Fifa's first clue? Beyond the quite-public grousing by officials in several countries ... and the sticker shock expressed by just about every fan who priced the trip ...

Fifa's first clue? Less than four months ahead of South Africa 2010, only 2.1 million of 2.9 million tickets have been sold for the planet's biggest sports event. That is, more than one-fourth of all tickets (27.4 percent) remain unsold.

And now Fifa concedes it didn't quite get this right. A startling admission for an entity that rarely allows that it gets anything less than perfect.

The biggest fallout from these miscalculations: Fifa is going to all but give away 800,000 or so tickets to South Africans. Which is nice for the poor people of South Africa, but bad for the bottom line of the ledgers for Fifa, the organizers and the South African tourist industry.

This event was overpriced from the first day. And then when fans actually began to try to figure out how much travel and lodging would cost ... ticket demand fell dramatically.

I don't know how many tickets Germans eventually bought, but a month or so again they had purchased only about one-third of their allotment of 20,000-plus tickets.

Even England didn't buy its full allotment, and English enthusiasm for its national side is as crazy-giddy as it has been in years. Well, since at least 2006.

Instead of reacting to that flabby demand, and adjusting ticket prices downward (and allowing the travel market to adjust its unrealistic expectations, as well) ... Fifa is going to downgrade high-cost "category 2 and 3" tickets to "category 4" -- and sell them for about $20 each.

Fifa lives in terror of stadiums that are not full, especially when the host nation has just spent billions on building them. It looks bad on TV, too, when matches are played in half-empty stadiums. (And will South Africans pay even $20 a pop to see, say, Honduras and Chile? ... New Zealand and Paraguay? ... North Korea and Portugal?)

How Fifa and the organizers miscalculated so badly is puzzling. South Africa isn't geographically close to any of the usual sources of traveling soccer fans. That is, Europeans or Americans (North and South). It is a long, expensive flight to South Africa from anywhere in the First World, and Fifa had to know that South Africa's hotel industry would try to wring every last dollar/peso/pound out of the tourists, complicating the expense in the middle of a global economic slowdown.


Look for the resale price of tickets to plummet, now that more than a quarter of them have just been re-priced at something that seems rather like "free" to residents of the First World ... and watch for airline prices and hotel charges to fall off a cliff. Because 800,000 fewer foreigners are coming to town, and now we all know.

If you happen to hold tickets ... well, our condolences for buying at the higher prices ... but if you haven't yet purchased your plane ticket or booked your hotel ... wait at least a few weeks and let the panic set in.

Look for a massive shakeout of the tourism side of this, and far better prices than you could have hoped for even a few days ago.

Fifa just burst the overpriced balloon of financial expectations on this World Cup.

It now is about filling stadiums and saving face. Not about making money, anymore. At least not a fraction of what Sepp Blatter and the boys could have counted on flowing in ... had this event been held in the First World. Or had they done a realistic assessment of likely demand.

Rather a mess. Rather.
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