Melbourne is hosting the first Grand Slam of 2024 and the Victorian economy is expected to see a flurry of economic activity. As tennis fans crowd the courts, small and large businesses in the hospitality industry in Melbourne’s central business district and beyond could see a significant boost.

The Mastercard Economics Institute (MEI) looked at spending behaviour during the Grand Slam in 2023 as a guide to what may be expected this year. Here’s what we observed:

The hospitality industry and retailers get a boost

MEI analysis shows that the biggest spending boost was in accommodation, with the spend in hotels in the CBD and neighbouring areas increasing by an extra 13.0% due to the tournament [1] in 2023. This could be a good benchmark for this year.

Chart 1: Capturing the boost from the Grand Slam

*calculating a synthetic version of Melbourne; SOURCE: MASTERCARD ECONOMICS INSTITUTE;

Underscoring the impact of the tournament on retailers, Mastercard’s SpendingPulse™ – an indicator for retail spending that measures in-store and online retail sales across all forms of payment – estimates that Melbourne retailers, especially those in experience and fashion-related sectors, are likely to see an increase in sales during the tournament in 2024.

Compared to the two weeks preceding the competition, we expect total retail sales (excluding auto) to grow 12.6% during the event, driven by in-store sales of apparel, restaurants and accommodation.

Chart 2: Retail sales forecasts for the tournament in 2024

  • The surge in the total retail sales activity during the tournament in 2024 is expected to be driven by restaurant and apparel sales

*as on 18th January 2024; SOURCE: SpendingPulse, MASTERCARD ECONOMICS INSTITUTE


What drives spend during the Grand Slam

All eyes on the Central Business District

A sporting event the size of the Grand Slam has a multiplier impact on the local economy, especially in the neighbourhood where the event is taking place. The CBD, where the stadium is located, is the centre of attention during the tournament, witnessing the highest level of activity across the city of Melbourne. These were some of the trends based on MEI’s analysis of change in share of spend across postcodes in Melbourne during the tournament vs. the remainder of the quarter, from last year’s matches:

  • Accommodations: The tournament led to a rise in the share of in-person accommodation spending in the central business district by 2.5% vs. the share of spend over the remainder of Q1 2023.
  • Restaurants & bars: Tennis fans chose to eat close to Melbourne Park during the event, with the share of in-person spend in restaurants & bars (excluding quick service restaurants) in the CBD neighbourhood increasing by 1.2% vs. the share of spend over the remainder of Q1 2023.
  • E-commerce penetration: Digital and online modes of payments, such as mobile wallets and app-based food delivery services, also added an incremental boost to small businesses, with quick service restaurants (QSRs)[2] surging in online spend during the tournament. Share of online spending at QSRs in the CBD was 2.2% higher vs. the remainder of Q1 2023.

    • Chart 3: Share of change in spend across postcodes during the tournament vs. remainder of Q1

    SOURCE: MASTERCARD ECONOMICS INSTITUTE

    MEI analysis also found some interesting trends in how long people stay in town for the tournament and where and when they decide to eat out.

  • Mondays saw the most check-outs during the event in 2023 as fans stayed over the weekend to make the most of the tournament. During the remainder of the quarter, Wednesdays and Thursdays were the more popular days for check-outs, driven possibly by business travellers.
  • Breakfast and lunch spend in QSRs outperformed during the event compared to the rest of Q1 2023, with breakfast on weekdays gaining popularity during the event as people grabbed a quick bite before heading to the stadium.
  • Restaurants & bars, excluding QSRs, were more popular during lunch and evenings after the matches, with the beginning of the week seeing a higher share of spend in the CBD areas for lunch during the match days in 2023.

    • Chart 4: The economic clock during the event

    SOURCE: MASTERCARD ECONOMICS INSTITUTE


    A look beyond the CBD

    Shopping malls and eateries in residential neighbourhoods saw an increase in spend

    The impact of the tournament was felt beyond the central business districts as tennis fever led to increased spend in prominent shopping malls and eateries in the suburbs. Some observations based on MEIs analysis of change in share of spend across postcodes in Melbourne during the tournament vs. the remainder of the quarter, from the Grand Slam in 2023 include:

  • Shoppers flocked to Waverly Gardens and Springvale for retail therapy. Spending on sporting goods, apparel and footwear outperformed the most in Waverly Gardens, improving by 3.7% (highest across the city) vs. the rest of Q1 2023.
  • Eateries that emerged in residential neighbourhoods thanks to hybrid work trends saw a higher share of spend during the tournament than the rest of the quarter, as fans chose these popular bistros to connect over a meal.
    • Restaurants & bars, excluding QSRs, in Garden City, an affluent residential area southwest of the Melbourne CBD, saw an additional increase only second to what was seen in the CBD during the event in 2023 vs. the rest of Q1 2023. Mid-week spending in bars and restaurants, excluding QSRs, increased as a total share during the tournament in 2023, while weekends were popular during the rest of the quarter.
    • Small businesses serving breakfast and lunch in Box Hill saw the benefits of consumers hitting the local high street, with in-person spend at QSRs – a reliable proxy for small business performance – higher during the tournament in 2023 than in previous years.

    The Grand Slam promises a sentiment boost to consumers, bringing together fans to share a drink or a meal and venture out for some retail therapy. The ripple effects of the event are likely to be felt across the CBD neighbourhood and beyond, benefitting small and large businesses in both the experiences and goods industries. The cushioned acrylic hard courts of Melbourne Park will be a crowd puller over this two-week extravaganza, with the second most anticipated outcome being the multifaceted boost to the economy.


    To learn more about economic insights from the Mastercard Economics Institute, contact your Mastercard representative or request a demo. request a demo


    Notes & Disclaimer

    Footnotes

    1 Calculating a synthetic version of Melbourne

    2 QSRs – are taken as a proxy for small businesses

    About the Mastercard Economics Institute

    Mastercard Economics Institute launched in 2020 to analyze macroeconomic trends through the lens of the consumer. A team of economists, analysts and data scientists draws on Mastercard insights - including Mastercard SpendingPulse™ - and third-party data to deliver regular reporting on economic issues for key customers, partners and policymakers.

    Disclaimer

    © 2024 Mastercard International Incorporated. All rights reserved.

    This Mastercard Economics Institute presentation (This "Presentation") and content or portions thereof may not be accessed, downloaded, copied, modified, distributed, used or published in any form or media, except as authorized by Mastercard. This presentation and content are intended solely as a research tool for informational purposes and not as investment advice or recommendations for any particular action or investment and should not be relied upon, in whole or in part, as the basis for decision-making or investment purposes. This presentation and content are not guaranteed as to accuracy and are provided on an "as is" basis to authorized users, who review and use this information at their own risk. This presentation and content, including estimated economic forecasts, simulations or scenarios from the Mastercard Economics Institute, do not in any way reflect expectations for (or actual) Mastercard operational or financial performance.