Johannesburg — FROM foreign exchange services to hotel soap suppliers, companies across SA are gearing up for a windfall during the Soccer World Cup. But some are looking dangerously overoptimistic, say analysts.

Big increases in working capital expenditure during the tournament could cancel out higher revenue for some firms in the hospitality industry, says Craig Pheiffer of Absa Asset Management.

"Restaurants and hotels have been upping staff levels to make sure they can cope with the anticipated increase in custom. But if that increase is smaller than expected, they will find themselves overstaffed, which will hit profits."

Pheiffer highlights the car rental industry as another potential trouble spot.

"They'll be putting off retiring cars for the World Cup, to make sure they have bigger fleets. But if they don't sell those hire days, there could be a problem."

While many companies may struggle to ensure that a rise in turnover does actually boost their bottom line, Pheiffer sees a promising opportunity for those who do not go "overboard".

"Companies like Bidvest , which has its tentacles in everything from toothpicks to airport lounges, stand to benefit the most through multiple entry points," he says.

"And airlines, for example, stand to gain a lasting benefit from return tourism if they make a good name for themselves among this year's visitors."

Yet the World Cup is unlikely to have a lasting effect on share prices, says Pheiffer. "Any boost there would be a temporary blip; investors are looking at longer-term prospects."

Pheiffer's caution is echoed by economist Mike Schussler, who says early forecasts of up to 750 000 visitors at the World Cup were unrealistic.

"We're a long-distance destination, so the recession made people less willing to spend on a major holiday here. And the hospitality industry has broadly outpriced itself, which is another major factor," says Schussler.

But Brett Hoppe, marketing manager at Sun International , denies hotel firms have overplayed their hand by pushing up prices excessively.

"Obviously the rates are much higher than usual for that time of year, but it's usually an off-peak period. We're just applying our normal peak rate."

Sun International's Cape Town hotels typically have occupancy rates of about 45% in June and July, says Hoppe - a figure that would "at least double" for the period of the World Cup, with a still greater spike in revenue.

Sun International will be significantly increasing spending on head-count and guest amenities, with a view to making guests "ambassadors" for the company.

But the hotel group was cautious in its estimates of visitor numbers. "We did a lot of investigating ... and analysing trends, and formed a fairly conservative outlook," says Hoppe. "Groups who invested on the basis of 750 000 visitors could have problems."

The rand's strength will play a part in reducing the number of tourists at the World Cup, says economist Tendani Mantshimuli of Liberty . "And many companies could suffer from an increase in absenteeism, which will affect productivity as a whole."

But as thousands of South African workers skip work to enjoy the football, some companies are set to gain.

"We're looking at a 4% increase in sales in June and July - about 20-million beers," says Alistair Hewitt, 2010 marketing manager at South African Breweries (SAB).

SAB had recently lowered its forecast of the number of visitors at the World Cup, "but given that quite a small percentage of the expected increase in sales is from visitors, there's less risk for us".

While SAB already had the infrastructure needed to supply the higher volume of beverages, it would invest strongly in ensuring a reliable flow of stock to the nine host cities.

The television exposure will give SAB "a wonderful springboard" to extend ranges such as Castle Lager internationally, Hewitt says .

Famous Brands chief operating officer Kevin Hedderwick plays down the potential for overinvestment by the group, whose portfolio includes restaurant chains Wimpy, Steers and Mugg & Bean.

"There'll absolutely be an employment issue - our restaurants will have to hire a lot more casual workers - but the costs will be more than offset by the increase in turnover."

The group would benefit from its large number of restaurants in well-positioned locations such as airports and rest stops on national routes, which would see trade similar to "a good December".

But Hedderwick sounds uncertain about the lasting benefits to be gained from the World Cup.

"We all hope this will be the start of sustained growth in SA, but we could wake up at the end of July with a hell of a hangover.