Organizing major events is no easy task. Now imagine trying to coordinate hundreds of thousands of people in one place, all who want front row seats to see Pope Francis. This is the task undertaken by the cities in which the pope visited this past weekend. Does the increase in visitors translate to huge economic benefits or do the logistical hurdles spell economic losses? The answer is yes and yes.
The economic benefits are easy to see. Those hundreds of thousands of visitors will need accommodations. That means hotels, restaurants, retail stores, gas stations, and transit services will all be welcoming these visitors with open arms. Businesses are not the only beneficiaries; the City is also glad to see the influx in visitors. The host city benefits from additional tax revenues, and from the impressive volume of press that is generated.
The economic detriments can be just as easy to spot. The most obvious culprits are increased congestion and inflated prices due to constrained resources. Additionally, not all businesses benefit from an influx of visitors, namely businesses that provide products or services that are not likely to be purchased by visitors. For these businesses, opportunities are limited as a result of the heightened congestion.
The question remains: does the good outweigh the bad? It depends who you are, but from a macro perspective, almost certainly it does.