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Last Updated: Thursday, 6 July 2006, 06:59 GMT 07:59 UK
Germany still waits for Cup boom
By Sam Wilson
BBC News, Dortmund

Bar manager Owen Byrne says there is no doubt what will be his best World Cup memory.

England fan drinks beer in Gelsenkirchen, ahead of 1 July match with Portugal
Breweries got a Cup dividend but less so German hotels
"When Trinidad and Tobago played [against Sweden] we had a party for about 15,000 people - that's the biggest event we've ever done. It wasn't confined to the pub, it was the whole street," he says.

Mr Byrne, manager of Dortmund's Irish bar, Limerick's, waxes lyrical about the boost to business from the World Cup.

"It's been huge, really big," he says. "We've had lots of Brazilians, Germans, Swiss.

"The Swiss, because beer's so expensive in their country they seem to like to spend a lot of money. But everyone's spent quite a lot over here."

While the pub industry is an obvious beneficiary of a major sports event, Mr Byrne says it is not the only sector to have received a boost.

"There's been a lot of advertising in airports, all the decoration. We've had two large screens fitted, with projectors; we've had flat screen TV put in the beer garden. Huge costs with beer of course - what we'd normally be getting in a month we're getting in a week, or every few days."

And with the German nation draped in the national colours, anyone selling anything in black, red and gold colours must have done very well.

But hopes that the World Cup would have benefits across the entire German economy remain just that - hopes, with little evidence that it has kick-started growth.


For some, the festival has passed them by.

Jorg Frassa, Berlin hotelier
They have cancelled everything, they have said: 'Don't go to Germany, it's the World Cup'
Jorg Frassa
Berlin hotelier
Heike Radtke runs the Olymp & Hades clothing shop in Dortmund.

"We have many people come in from Switzerland, Brazil, England - many tourists. More people, but not really more sales," she says.

"Before the World Cup began I had hoped we'd have good business, but not really. Nothing changes."

Priti Shambhu, who runs an antique leather goods store in Berlin, has seen no extra trade.

"Football fans like to go the bars, but they are not really interested in my things," she laments. "We do better when there are cultural events in Berlin."

Perhaps most surprisingly, Berlin hotels are suffering.

"Busier? No, not at all," says Jorg Frassa, manager of the Comfort Hotel Auberge.

In June he normally has 80% to 85% occupancy, thanks to business fairs, but this June occupancy was down to 65%.

"They have cancelled everything, they have said: 'Don't go to Germany, it's the World Cup,'" says Mr Frassa.

Before the World Cup, optimistic predictions were made that the tournament would create 50,000 jobs, that retailers would get a boost of 2bn euros, and that GDP might be boosted by up to 0.5%.

Impact unclear

It is too early to know how accurate those predictions were.

TV dealership in Dortmund
Dortmund television shops experienced a boom in sales
But it is clear that, at this stage, the injection of cash has been limited to a few sectors, including televisions and sports merchandising.

"The real impact is uncertain," says Stephan Biermeier, an analyst at Deutsche Bank in Frankfurt.

"But the sentiment is really good and this may have benefits for consumption.

"However, the effects are limited to certain sectors. There is some extra spending on train tickets, football shirts, and other activities related to football and the World Cup. But elsewhere, I expect just the usual spending patterns."

Even the shopkeepers in Dortmund, who have seen trade in televisions and sports goods soar by 60% or 70%, say they believe it will be only a short-term shot in the arm.

Some confusing economic figures make it difficult to know where the truth lies.

One study says consumer confidence in Germany is near a five-year high. But at the same time retail figures for May, when Germans were expected to make World Cup investments like expensive televisions, were down 2.2%.

A survey by TNS Infratest suggests 44% of the hospitality industry is dissatisfied with the World Cup.

Germany, however, had the strongest manufacturing growth across Europe in June.

Analysts, however, struggled to link this to "a World Cup effect", and say it seems to be a broader improvement in economic conditions.

Long-term hopes

Germany's economy, after years in the doldrums, badly needs something to give it a kick-start.

And while hotelier Jorg Frassa has seen an immediate downturn in his business, he believes the long-term effect of the World Cup may be much brighter

"I'm sure it will come," he says. "It's unbelievable what's happened the last few weeks here. All the visitors are happy, satisfied.

"All around the world people will see it, and I think we will get a lot of business, maybe starting at the end of this year and in the coming years."

With a survey suggesting that 90% of visitors would recommend Germany as a holiday destination, his wishes may be fulfilled.

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