Melbourne's grand slam boosts local business sales
New research from the Mastercard Economics Institute (MEI) reveals the economic benefits that major sporting events, such as Melbourne's grand slam tennis tournament, bring to local businesses. According to the findings, in 2024, Melbourne's fashion and experience retailers could be among the biggest winners from an anticipated 12.6% rise in sales during the tournament.
Looking back on the 2023 Australian Open, it was found that digital payments offered a substantial boost to small businesses. The growth of digital payments in Quick Service Restaurants (QSRs), which is used as an indicator for small business performance, quadrupled when compared to the overall retail growth in the first three months of the year. Furthermore, businesses operating in the hospitality sector saw a higher share of spend in the central business district (CBD) during the tournament compared to the rest of Q1 2023. This trend is expected to continue in this year's tournament.
The retail sector isn't the only one that will likely profit in 2024. The accommodation sector in the CBD and neighbouring suburbs could experience a growth of more than 13% due to the sporting event. Not surprisingly, the economic impacts of the tennis can be seen across Melbourne's small businesses. Some examples include Waverley Gardens, where spend on sporting goods, apparel and footwear stores increased by 3.7% during the event compared to the rest of the quarter. In Box Hill, small businesses benefited from consumers visiting the local high street, resulting in higher in-person expenditure at quick-service restaurants. Restaurants and bars in Garden City saw a significant increase in spending, second only to the CBD.
The data indicates a dominant behaviour pattern known as the 'Economic Clock of the Open': with Monday seeing the most hotel checkouts as fans extend their weekend stay, breakfast spend outperforming during the event and restaurants and bars growing in popularity at lunch and dinner times, likely timed around matches at Melbourne Park.
David Mann, Chief Economist, Asia Pacific, at the Mastercard Economics Institute stated, "Each year the tennis sees Melbourne come alive as fans from around the country, indeed the world, seek out the very best the sport and city have to offer. The data suggests the tournament provides a significant shot in the arm for the local economy."
Highlighting the broader impact of the tournament, Mann added, "The reach goes far beyond Melbourne Park, and for two weeks every January, Australians turn up at their local pub to watch with friends, discuss the matches over a meal, or even head to the local sports store to pick up a racquet and hit the court themselves - all of which give small businesses a much-needed boost to their bottom line."
To acknowledge the importance of small businesses in fostering community spirit during the tournament, Mastercard arranged for world number 10 tennis player, and Australian favourite, Alex de Minaur to help out at Pound Cafe South Yarra in Melbourne.
Nick Hoban, Owner, Pound Cafe South Yarra, appreciated the support. He noted, "The tennis is a huge part of summer in Melbourne and brings so many people to the city, providing an incredible boost to small businesses like ours. During the two weeks of the tournament, we see the community come alive, uniting over their shared passion for the tennis and a great cup of coffee. Alex coming in and rolling up his sleeves gave us some much-needed help. A massive thank you to Mastercard for making this happen, and for their support during one of our busiest seasons."
