Bachelor Thesis, 2008
72 Pages, Grade: 1,8
Table of Content
V. List of Tables
VI. List of Appendices
VII. List of Abbreviations
1.1. Problem Definition
1.2. Key Objectives
1.3. Structure of this work
2. Literature Review
2.1. Impacts of Mega Sport Events on Tourism
2.1.1. Economic Impacts of Mega Sport Events
2.1.2. Socio-Cultural Impacts of Mega Sport Events
2.1.3. Ecological Impacts of Mega Sport Events
2.1.4. Political Impacts of Mega Sport Events
2.1.5. Impacts of Mega Sport Events on Cooperation and Networking
2.2. Cooperation and Networking in Theory
2.2.1. Definition of Cooperation
2.2.2. Definition of networks
2.2.3. Cooperation Theories
184.108.40.206. The Transaction-Cost-Theory
220.127.116.11. The Principal-Agent-Theory
18.104.22.168. The Game Theory
22.214.171.124. Resource Dependence Approach
3.1. Qualitative Research
3.2. Quantitative Research
3.3. Research Design
3.3.1. Explorative Research
3.3.2. Descriptive Research
3.3.3. Causal Research
3.3.4. The Research Design applied in this thesis
3.4. Research Techniques
3.4.1. Focus Groups
3.4.2. Unstructured or semi-structured observation
3.4.3. Depth Interviews
3.4.4. The Research Technique applied in this thesis
3.5. Mail vs. Phone vs. Personal vs. Web
3.6. Questionnaire Design
3.6.1. Target Respondents
3.6.2. Typology of the Questionnaire
3.6.3. Questionnaire Sections
3.6.4. Question Formulation
3.7. The Interviewees
3.8. Realization of the Interviews
4. Primary Research Results
4.1. Question 1
4.2. Question 2
4.3. Question 3
4.4. Question 4
4.5. Question 5
4.6. Question 6
4.7. Question 7
4.8. Question 8
4.9. Question 9
4.10. Question 10
5.1. Implications of the Literature Review
5.2. Interpretation of Primary Research
5.2.1. General Situation in the regional tourism industry
5.2.2. General influence of the MSE on cooperation and networking
5.2.3. Specific influence of the MSE on main characteristics of cooperation
5.2.4. Efficiency of the use of the MSEs potential
5.2.5. Ideas to improve this efficiency
5.2.6. Importance of Cooperation and Networking
5.3. Recommendations for further Research
As research around the impacts of Mega Sport Events on host cities and regions reached is peaking in the aftermath of the FIFA World Cup 2006, the UEFA European Football Championship 2008 and the Beijing Summer Games 2008 the topic of cooperation and networking has been widely neglected in regard to MSEs. With the focus on the tourism industry of hosting regions, this work tries to start to change this, as an exploratory approach towards finding out more about the interrelationship of those two topics in tourism. As both, MSEs and cooperation are gaining more and more interest within tourism research this should also be seen as an approach to combine both to motivate further research.
Methodologically this is realized by conducting expert interview with five industry experts with valuable experience in preparing, hosting and also benefiting from a Mega Sport Event. The expert interview, as the primary research part of this work is based on the cooperation concept of Axelrod’s game theory. This basis was used to design, conduct and analyze the primary research part of this thesis.
Essentially, the thesis should be interpreted as a scientific approach to present the combination of the topics of Mega Sport Events and cooperation in tourism.
First of all I would like to thank Dr. Krebs and Mr. Legrand for their support with my thesis. With my topic up in the air and not much more than a very nice, but very theoretical idea, they still decided to join me in my quest to explore a relatively new topic. Additionally they accepted my working style without any complaints, which might have been more difficult than expected. Thank you two very much for your support.
And second of all I would like to thank my interviewees for their participation in the expert interviews. I was honoured to be able to access such an amount of expertise from the right people in the right organizations all over the world, so thank you very much:
- Alison Connelly, Manager, Innovation and Technology Department of State and Regional Development NSW
- Michael Fox, Manager, Meeting & Convention Sales, Sport Tourism, Tourism Vancouver
- Bob Schuler, Vice President, Sales & Convention Services Atlanta Convention and Visitors Bureau
- Vera Schweder, Company Spokeswoman, WienTourismus
- Josef Sommer, Executive Director, Kölntourismus
Table 1: Question 3 – Impact of a MSE on cooperation and networking
Table 2: Question 4 – Aspects of Cooperation
Appendix 1: Questionnaire for Expert Interviews
illustration not visible in this excerpt
During the FIFA World Cup 2006 in Germany, people seemed to feel better, look better, earn more money, have more confidence and what not. One more point however was obvious to everyone right away: people did not mind to share all this. Even better, they did not even mind to share the work required for preparing such a massive event, the extra hours, the limitations through construction and everything else necessary to host an event of this scale. All of this also had an influence on the Germany economy, where competition seemed to be forgotten for some time, between some companies to organize World Cup parties, offer accommodation to foreigners or just watch soccer. Specifically, those phenomena were evident in tourism, where competing hotel chains cooperated to represent the nearest host city and tour operators established partnerships with tourism boards, which would have taken years to be realized without a Mega Sport Event around.
Through all of this I started asking myself who really benefited from such an event in the long run, when cooperation plays such a big role. Additionally to the proven benefits of short term extra revenues and rising German GDP this question was being discussed since Germany had won the bidding on the World Cup in 2000 and cannot be answered in every detail until now. That tourism and hospitality did benefit, however can be seen as a fact. Especially tourism as an industry build on the basis of cooperation and networking nowadays looks at a renovated industry structure with efficient networks and battle-tested cooperation experience, partially because Germany hosted a big soccer event.
So regarding my bachelor thesis I thought about applying this interesting topic but could hardly find the right way to approach the benefit tourism gains through the cooperation and networking necessary to host a MSE.
With some major help from Dr. Krebs and Mr. Legrand, the instructors of this Bachelor Thesis however, I found a way to scientifically build upon the question if MSEs do actually have an impact on cooperation and networking. To be able to compare different kinds of MSEs hosted regionally and nationally the limitation of a tourism region was added and then the most difficult and essential step, the search for a scientifically sound, conceptual background began.
All of those issues will be discussed during this thesis along with a lot of information on MSEs, cooperation and the way to combine both.
As research on MSEs increased during the last decade one topic was left out most of the time, gaining interest only for a mentioning here and a note there. This topic has been cooperation, networking and the influence of MSEs on those phenomena.
Without a doubt cooperation can be considered a prerequisite to host MSEs, especially essential in tourism to enable host cities to offer increased supply for accommodation, transportation and other tourism related subsectors. Furthermore cooperation itself has been seen as one of the most important tools to modernize modern tourism industries to compete on a global level in a globalized world.
Still, the impact of hosting a MSE on cooperation and networking has hardly been the interest of any research until now, when it comes to works specifically designed around this topic.
Consequently this thesis will be concerned with exploring the combination of Mega Sport Events and cooperation concerning a relationship, more specifically an influence of Mega Sport Events on cooperation and networking in tourism on a regional level. The thesis itself will not be able to solve any management related problems of decision makers in tourism with a need for guidance how to use MSEs efficiently and benefit from their potential in cooperation and networking. Nevertheless it should motivate further research right into this direction. A long-term aim would be to find out if MSEs can actually be seen as tool to modernize a tourism industry concerning cooperation and networking, which would essentially change how MSEs are seen today. Such a development could change the value perceived from hosting MSEs irreversibly towards a facilitator of structural modernization, and away from a costly burden.
First however, the topic has to be approached on a more general basis to gain insights, establish first theories and gain expert knowledge. This will be done through the next approximately 60 pages to build a basis for further research and to support process in this young field of tourism interest.
To ease the understanding of this thesis from the start on a definition of the main term of interest, the Mega Sport Event, is given in the following. Cooperation, however, is defined more detailed in the literature review as it is a scientific concept rather than a usual term.
Mega Sport Event (MSE): MSEs are “short-term events with long term consequences for the cities that stage them” (Richie, M. 2000).
With MSEs being the topic of bigger discussions throughout every industry this thesis is concerned with its influences on tourism, specifically on cooperation and networking in tourism on a regional level.
Nevertheless, as this topic has not been defined and analyzed in detail yet, this work has the following objectives:
- To further define the relationship between Mega Sport Events and cooperation and tourism in the region, which hosts them
- To start the scientific discussion, to what extent MSEs can be seen not only as an economic, social, environmental or political influence on its host but also on the structure and organizational development of industries, specifically the tourism industry
- To identify specific topics and hypotheses for further research on cooperation and networking in relation to MSEs
In the following the general structure of this thesis will be explained to enable the reader to better understand how chapters and subchapters are related to each other, and how the logical order of this work evolved.
The first chapter of this thesis has been a fairly short introduction only to explain the main topic, objectives and motivations of this work. Concerning definitions, historical backgrounds to the topics or theoretical concepts behind the ideas of this thesis, the literature review will present every answer necessary to understand this work.
Just this, the literature review, is the second part of this thesis, again divided into two main parts concentrating firstly on the rather practical part of the topic of this thesis and secondly on the conceptual part. The practical part summarizes research on impacts of MSEs through the last 30 years and is widely dominated by the results on economic impacts. Moreover the second part focuses on the conceptual background of this thesis, introducing important ideas and theories around cooperation and networking. Here, the relation to economy in general and tourism specifically is also shortly discussed to enable the reader to connect conceptual theory to real industries.
Furthermore, the following chapter explains the methodology behind the primary research part of this thesis. The reasons why primary research was decided to depend on expert interviews and how those were designed, organized and realized is discussed in great detail, to ensure the reader the right background for later findings.
Those findings are then, the topic of chapter four as every finding is presented in detail. It has to be mentioned, that this chapter only lists findings of the primary research part without any interpretation of implications.
Those implications are then analyzed during chapter five as discussion of findings is the main topic of this part of the Bachelor Thesis. This chapter also includes recommendations for further research and at the same time, is the end of this thesis.
The Literature Review was being realized using mainly the library and information centre from the International University of Applied Sciences Bad Honnef ∙ Bonn. Specifically this means the use of physical sources such as books and journals, as well as electronic sources directly from the IUAS catalogue and via databases such as Ebsco and the WTO e-library. Additionally, the IOC library and other sources of information specifically concerned with MSEs were used.
However, as the impact of Mega Sport Events on cooperation within the tourism industry has not been researched in detail yet, the focus had to be broadened to impacts of Mega Sport Events in general.
Furthermore, a literature review of theory available for cooperation and networking was done to ensure the use of the right theoretical background when dealing with those topics.
Mega Sport Events have been growingly recognized in academic research due to their economic, socio-cultural and even environmental impact on the host destination or region. The analysis of such impacts has mainly evolved through the last 15 years; however there are earlier examples of such research too.
Hudson (2003) for example decided on five impacts as the most important ones for MSEs:
- Publicity attraction
- Public support mobilization
- Resource attraction
- Partnership creation
- Infrastructure improvement
However, those top five aspects can obviously not grasp the whole field of such
impacts, and therefore a further categorization is of value. Such kind of grouping can be done based on the groups affected by the impacts as Horn and Zeemann (2002) did. They decided on seven groups affected by MSEs ranging from the hotel industry, gastronomy, retailers, other companies and public authorities at the host city, to the actual visitors of the event and public authorities.
Another approach of grouping those impacts was established by Ritchie and Hall (1984) focusing on the kind of impact. They decided to use six categories, namely
- Economic impacts
- Tourist and commercial impacts
- Physical impacts
- Socio-cultural impacts
- Psychological impacts
- Political impacts
Due to the fact that a vast majority of literature on the impact of MSEs concentrates on economic and social impacts, and that some research also has been done on socio-cultural, environmental and political impacts, the literature review focuses on those points in the following.
By far the most research concerning impacts of Mega Sport Events has been focused on economic impacts. The reason for this could be that those are easier to analyze, due to the availability of quantitative data. Additionally the demand for results concerning the financial value and impact of a MSE seems to be much higher for economic impacts than for social, cultural or other impacts.
Dell Bitta, Loudon, Booth, and Weeks (1977) for example tried to estimate short-term tourist expenditures for the 1976 Tall Ship event in Newport, Rhode Island. They came up with one of the first values for future MSE decision-making estimating visitor expenditures to surpass US$ 15 million.
Later Long and Perdue (1990) and Murphy and Carmichael (1991) intensified this analysis of the number of participants and expenditures for Mega Sport Events. They were able to produce more detailed estimations such as an overall spending of C$ 479, 516 at the 1989 British Columbia Winter Games in Nelson, BC.
Through those kinds of studies early estimations for Summer Olympics where corrected, and a trend to overestimate such events was analyzed by Pyo, Cook and Howell (1988). Examples for those overestimations would be the Tokyo Olympics and Los Angeles Olympics where differences of up to 225,000 visitors between estimation and study where found.
Consequently, the impact of Mega Sport Events was considered weaker regarding direct spending from visiting fans. Nevertheless long-term impacts such as the building of a positive destination image where suggested to be included for the first time. Kang and Perdue (1994) for example tried to analyze such a “longitudinal effect of the mega-event” using the “Olympic Impact Curve”. This resulted in estimations for the 1988 Seoul Olympics which reached new dimensions of economic impact. In precise Kang and Perdue projected long-term impacts of US$ 1.3 billion over three years between 1988 and1990.
Such studies, however, where regularly criticized concerning methodological issues. So consequently, after Burgan and Mules (1992) had demanded that researchers should count only those expenditures that would not have occurred in the absence of the event, first studies where established excluding local residents and casuals by Crompton et al (2001). Furthermore, the distinction between true net economic impact of an event and gross economic impact was made, as Tyrrell and Johnston (2001) pointed out even bigger methodological mistakes in recent research. As a result estimations of economic impact of Mega Sport Events were becoming more and more complicated, but also more precise at the same time.
Gelan (2003) for example found out that 23% of respondents at the 1999 British Open where residents, therefore not being part of the MSEs economic impact on tourism. Consequently first distinctions between local resident- and tourist per capita expenditure where established. For the 1999 British Open the difference was obvious as local residents spend £ 75.7 per day while tourists spend £ 154.2 per day on the event as Gelan stated in 2003.
In further research the estimation of a MSEs economic impact was calculated using key indices, as in the example of Lee and Kim (1998) forecasting the number of foreign football tourists for a FIFA World Cup indicates.
Those key indices are:
- The capacity of the World Cup Stadium
- The percentage of tickets allocated to foreign football tourists
- The expected sales of allocated tickets to foreign football tourists
- The number of matches held
- The number of matches attended per foreign football tourist
Lee and Taylor (2003) then developed such studies of economic impact further differentiating between tourists directly and indirectly related to the MSE. They used two different questionnaires to “classify tourists into three categories according to their main purpose of travel” and to “estimate per capita expenditure” (p. 598). Using an input-output analysis, the results were then analyzed, combined and finally differentiated by tourism-related sectors.
The results showed that only 57.7% of tourist arrivals during the time of the event where directly or indirectly related to the Mega Sport Event of the 2002 FIFA World Cup in South Korea. This being one of the most precise and methodologically concise studies on the economic impact of a Mega Sport Event, results of 232,800 foreign world cup tourists and US$ 522 million of direct spending were presented to the public.
Using standard tourism-sector multipliers “tourism receipts of US$ 522 million that were attributable to the World Cup were calculated to generate US$ 1.35 billion of output (sales) as a result of direct, indirect, and induced impacts” (p. 600). Those overall impacts resulted in 31,349 full-time equivalent jobs. Regarding sector-differentiation, the tourism sectors culture and recreation and accommodation and shopping were highlighted to be the biggest beneficiaries of the Mega Sport Event.
Still a lot of limitations have to be considered looking at those results as even “this research has also highlighted the need to more adequately conceptualize aversion and diversion aspects, as well as attractive factors, in relation to mega
sport events“ (p.602).
Concerning economic impacts of MSEs, especially Schwark (2005) started to differentiate between national and regional impacts using the examples of the UEFA Champions league finals 2004 in Gelsenkirchen and the Karstadt Ruhr Marathon 2004 between Dortmund and Essen. He also used tourism-sector multipliers to produce results for total revenues for the region, net earnings, impact on salaries and taxes and finally value added regionally.
On behalf of the CL-Finals, the highest stage of European club football, he also divided participants into groups of fans, journalists, local organization committee, UEFA, Sponsors and VIPs to calculate investments and earnings by group. For the whole MSE Schwark ended up with 13,117,000 of gross primary spending, 26,234,000 of gross secondary spending and an added value of 9,125,000 for only the region of Gelsenkirchen for a one-day-event.
Furthermore, analyzing the economic impact of the Karstadt Ruhr Marathon, he differentiated between fans and actual participants of the event. Here Schwark stated that an added value of € 5,756,500 for fans and € 3,383,000 for runners was achieved for the region between Essen and Dortmund. This resulted in € 9,139,500 of added value overall. Concerning tourism he went even more into detail adding results of 19,500 overnights for the MSE.
The analysis of economic impacts of Mega Sport Events peaked with the FIFA World Cup 2006 in Germany, resulting in better estimations beforehand. Additionally the aftermath of the event is done more precisely than ever resulting in the most detailed monetary results of this young field of research.
Ahlert (2006) did one of those estimations following Schwark (2005) in differentiating between national and regional impacts. To calculate his estimations he used the SPORT-model, which is based on satellite accounts. Those satellite accounts are then again based on the German system of national accounts (SNA). Adjusting those accounts to sport economic data he came up with the fully integrated bottom-up model SPORT.
Concerning the FIFA World Cup Germany he used optimistic assumptions based on prior research on football tournaments in Europe between 1988 and 1998. As a result of models like the one from Lee & Taylor (2005) he again excluded residents from his estimations.
His results reached a new dimension concerning MSEs, forecasting a GDP-increase for Germany of € 6.7 billion in the years between 2002 and 2010. This increase would start in 2002 (€ 246.6 million), peak in 2006 (€ 1.756 billion) and then slowly disappear towards 2010 (€ 430.2 million) as Ahlert projected.
The author then used those results to project changes in the employment situation in Germany and forecasting job increases between 1,779 (2002) and 8,594 (2006) per year.
Focusing on regional impacts Ahlert used federal-state-based multipliers to again forecast direct, indirect and induced economic impacts for each sector. His results showed the German federal states North Rhine Westphalia, Bavaria and Baden-Wuerttemberg as the biggest beneficiaries of the FIFA World Cup 2006. His projections for NRW were the most impressive, peaking at a total indirect effect of € 1.057 billion for the federal state between 2002 and 2008.
In comparison to economic impacts, socio-cultural impacts of MSEs have
been widely neglected by researchers, their existence however is undoubted. Bieger et al. (2001) for example mentioned the impacts on society and ecology in his work on MSEs. Those socio-cultural impacts can range from effects on the identity of the community through an increase of local, regional or national pride to the establishment of new know-how and social contacts. Moreover negative impacts also have to be considered as Bieger et al. pointed out the risk of a split of the local community due to the economic and social pressure of a MSE.
How those effects evolve and how to influence them however has rather not been analyzed scientifically yet.
Schmied (2002) sums up the main ecological impacts of MSEs as
- Environmental pollution through construction
- Environmental pollution through the actual use of venues such as stadiums
- Environmental pollution through transport, especially air traffic
Furthermore increases of traffic, waste, noise, air, pollution and finally landscape have to be considered as Bieger et al. stated.
Still, the potential for positive effects of MSEs on the environment cannot be neglected either, as Bieger et al. also emphasized the opportunity of improved structures for traffic or waste disposal through infrastructural modernizations around and Mega Sport Event.
Quantitatively those kinds of impacts have been hard to analyze and results are scarce. Horn and Zeemann (2002) however have established a first evaluation procedure including environmental effects. Their approach is again based on a cost-benefit analysis, which is not focused on environmental effects alone, but also includes economic and social effects.
As Toohey, Taylor and Lee (2003) pointed out, a raised danger of terrorism attacks could also be seen as an impact of MSEs. Nevertheless, due to the extremely high interest in MSEs and their superior reputation, concerning reach and media-coverage, such dangers have to be accepted.
Furthermore the danger of violence through fighting fans, hooligan activity and vandalism also has to be considered as Dietl and Pauli (2001) stated.
Research on this topic has seen gained interest in the years after the terrorist attacks of September 11, 2001 but scientifically sound works focusing just on political impacts are still nearly impossible to find.
Finally the topic of this thesis, the impact of MSEs on cooperation and
networking, also has been widely neglected in academic research up to now. A few mentionable exceptions have to be considered however. Rahenbrock (2005) for example analyzed the regional tourism development around the city of Dortmund due to the FIFA World Cup 2006, and included the topic cooperation. She found examples, such as several partnerships of the Dortmund Tourist office with theatres, cinemas and restaurants in the region, motivated by the event. Furthermore Rahenbrock presented the overall concept of 15 hotels of cities in the Ruhr area cooperating to be able to host the event concerning accommodation.
Summarising those efforts, the city of Dortmund established and developed a network of 50 cities in the Ruhr area during the preparation around the event of the FIFA World Cup 2006, as Rahenbrock stated in 2005.
Those Networks also included the DZT and Tourism NRW, as the most important tourism organizations in the federal state of North Rhine Westphalia. In her in-depth interviews Rahenbrock even presented the opinion that MSEs such as this one can be seen as an opportunity for regional networking in tourism. Moreover the necessity of networking and partnerships to host such events was emphasized. Those statements were strengthened even further mentioning the need to divide the cost-pressure for marketing efforts through cooperation.
Additionally a kind of roof-organization concerning cooperation and networking was mentioned by Schwark (2005), trying to develop a major network between all tourism cooperation in place.
Those networking efforts, including governmental and private participants, were realized project-based as well as ongoing and did also cross the borders of sports linking the event of the FIFA World Cup 2006 to cultural attractions. A good example for this was the cooperation mentioned with the Goethe-Institute. Regarding goals of those networks, those range from marketing cooperation, through cost-saving efforts to operational cooperation as Schwark pointed out.
Schwark was also able to analyze first limitations of cooperation and networking around MSEs as his interviewees complained about strong restrictions from the FIFA. Specifically pricing, accommodation and sponsoring seemed to be strongly limited by the FIFAs forced focus on its major partners such as Coca Cola and Hyundai as was evident in through Schwarks depth interviews in 2005.
Rahenbrock then also gave an outlook concerning the legacy effects of all cooperation efforts, during and before the FIFA World Cup 2006, in and around Dortmund. She summarized a mainly optimistic look into the future throughout her interviewees and stated an overall satisfaction with increased demand and improved image due to the FIFA World Cup 2006.
Furthermore the topic of indirect impacts of cooperation and networking was underlined, as interviewees stated the chance of increased profits through the networks themselves as one of the benefits of a MSE.
Finally the necessity to establish a tourism network, also applicable after the MSE, was concluded concerning the successful realization of a FIFA World Cup. This necessity was then emphasized again, as “cooperation is needed to limit social and environmental effects of the MSE” (Rahenbrock, 2005, p. 116).
To ensure a sound theoretical background for this thesis, conceptual literature
, focused on cooperation and networking, had to be reviewed. Therefore general literature concerning cooperation and networking as well as the most common theories around this topic had to be taken into consideration. Finally this literature review should then enable to decide which cooperation theory is best suited to be the base of primary research later in this thesis.
Concerning the word itself cooperation is based on the Latin word cooperare which can be translated as collaboration (Eßig, 1999). The formulation itself however is used very differently throughout sciences, industries and cultures. Bruhn (2005), as one of the first researchers to define cooperation concerning economic markets stated that “cooperative behaviour in markets describes the collaboration of several enterprises to reach a common goal” (p. 1188). Furthermore the fact that the collaboration has to be voluntarily was emphasized by Balling (1998). The focus on economic common goals, as an additional prerequisite was also underlined by Backhaus/Meyer (1993). Furthermore the area of cooperation was the topic of Balling stating that only one or a few parts of companies are chosen with respect to the common goals. Moreover Hofer (1997) stated the importance of dependency and competition within cooperation.
Networks are defined as a specific kind of cooperation between enterprises as Wohlgemuth (2002) stated, emphasizing a point not defined but still agreed on for decades before. Sydow (2006) defined them as cooperation between relatively independent organizations and enterprises, which are embedded in a net of relationships. Again the emphasis of those specific kinds of cooperation is on common goals rather than individual goals. Wöhler (1997) stated that destinations of one region, cooperating to offer a complete tourism product, are a perfect example for such networks. Consequently this definition can be applied to tourism research as well and does not have to be further developed for the tourism industry.
So summing up, only the minimum number of participants can be seen as the difference between cooperation and networks, which means both words can be used synonymously in the case of MSEs as the focus is generally on more than two participants concerning such major events.
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