Serbia's EXPO 2027 bid: Doubts cast over economic feasibility study

Serbia's bid to host EXPO 2027 is projected to be a net financial gain, according to a recent economic feasibility study. The report suggests the state would invest approximately 2 billion euros, anticipating a return of nearly 3.8 billion euros through tax revenues. Furthermore, the study estimates that EXPO could contribute an additional 9.1 billion euros in added value to the Serbian economy by 2037.

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This is a late study, it should have been available before we applied for the project.

However, Ivan Radak, editor at Forbes Serbia, has expressed skepticism regarding the study's projections. He noted that the study was conducted by the consulting firm Louis Berger and commissioned by the government, and was delivered significantly late, after Serbia had already submitted its bid. Radak highlighted that such projections rely heavily on input data and modeling, which can lead to impressive but potentially unrealistic figures.

Radak's primary concern centers on the period following the specialized exhibition. He questioned the long-term management strategy for the EXPO site, which is planned to become the Belgrade Fair. Citing past experiences with the fairgrounds, he expressed uncertainty about whether the government can effectively manage the location over the next decade to realize the projected revenues. The success, he stated, hinges on professional management, whether domestic or international, and whether they possess the necessary experience.

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These are really big numbers. It's about projections, where you insert some input data into those modeling systems, and then the calculation spits out some numbers. It looks impressive, but there are many 'buts'...

He finds the projected tax revenues particularly hard to believe, describing the return on investment as "exceptional" if the figures hold true. Radak also pointed out an initial projected loss of around 500 million euros for the EXPO itself, based on the return of 1.5 billion euros by mid-August next year against the 2 billion euro investment. The overall profitability, he stressed, is contingent on the "big 'if'" of effective management over the subsequent ten years.

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What worries me most is what will happen after the specialized exhibition ends. Where EXPO will be, then the Belgrade Fair will be. We have experience with the Fair, we know that it doesn't go that well.

Furthermore, Radak questioned the study's estimate of 1.65 million foreign visitors, which represents about 10% of the total expected visitors over three months. He cited a conversation with the general secretary of the organization that awarded Serbia the EXPO, who indicated that foreign tourists typically constitute only 8-12% of visitors. Radak finds the expectation of such a high number of foreign tourists, particularly those with significant spending power from neighboring countries, to be unrealistic. The study's assumption that business tourists will spend an average of 460 euros daily, and general visitors 137 euros, further contributes to his doubts if these figures are not met.

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On an investment of two billion, we will get 3.8 billion. To me, that really seems like an exceptional return on capital. That would mean that every dinar was excellently invested, that it doubled. I estimate that nothing should go wrong to achieve such a result.