Historically, there has been a focus on the financial cost of staging Olympics, but the value to the meetings industry from the Games comes in many forms, including improved destination infrastructure and marketing.
In China (2008) and the two boycotted Games in Los Angeles (1984) and Russia (1980), the political stakes were high and cities were under huge pressure to improve perceptions.
London is under pressure to deliver on legacy, having based its bid case firmly around the issue.
Let’s start with the money trail, however. Sydney 2000 reported its Games cost US$6.5bn of which the public paid $2.4bn. Sydney’s business events rise would appear to be making a good return on that investment.
Probably Atlanta (1996) and Athens (2004) present the two extremes for the money men looking for case study financial lessons.
Although the Athens Tourism and Development Company maintains the city derived value from its investment, perception is that the 2004 Games acted as a drag on an economy with organisers admitting they should have put more thought into legacy use of venues, many of which stood empty for years.
The $15bn cost to the smallest country to stage the Games possibly contributed to the current debt ills.
Atlanta 1996, the Games immediately before our case studies began in 2000, is a Games that transformed a provincial backwater with infrastructure improvements.
The cost, $1.8bn, is modest by modern standards, and paid for by commercial sponsorship. Organisers claim they even made a profit of $10m.
The heavy reliance on corporate sponsorship did, however, led to the accusation that the Games were over-commercialised.
A report by European Olympic officials criticised crowding in the Olympic Village, the quality of food and the transport system. A reflection, perhaps, of the downside of taking the commercial big bucks and handing everything to the private sector.
Tellingly IOC President Samaranch simply called the Atlanta Games “most exceptional” in a break from protocol. He had traditionally labelled each Games “the best Olympics ever” at the closing ceremony, a practice he resumed in Sydney in 2000.
Value in kind
In China, the value of hosting the 2008 Olympic Games lies only partially in the huge infrastructure developments. New perceptions of the country far removed from the old pre-Games stereotypes dominated by political issues and pollution scares.
Extravagant opening and closing ceremonies may not please every National Olympic Committee Financial Director, but Sydney and Beijing’s creativity certainly delivered the event wow factor.
London is hoping for a £2.6bn Olympic bonanza and many venue managers hope the 2012 Games will ignite a traditionally quiet time of year for the meetings industry.
Training camps and related facilities for final preparations have already meant good venue bookings.
CEO of Dallas-based Meeting Professionals International (MPI), Bruce MacMillan says the Olympics is an events festival as much as a sporting festival.
“There is not only huge demand for hotel meeting space, but also for offsite and non-traditional venues. Some corporations and organisations may book a place for the whole Olympiad.”
Convention Bureau Visit London has drawn up a fair pricing charter and Director of Business Tourism, Tracy Halliwell, says a host city has to look at is the long-term hotel legacy. “Athens and to a certain extent Beijing fell foul of this. You have to make sure people have a good experience,” she said.
“There was feedback from people panicking that London was too expensive and a difficult destination to do business with. What the charter says is, ‘If you use this bunch of people, we can guarantee that you’re not going to be ripped off,” she added.
Kurt Wehinger, GM of the Grand Millennium Beijing, has worked in three Olympic host cities during the Games and says meeting spaces in Beijing were sold at very high rates and were fully booked, although Early Bird customers paid dearly. “Five-star hotels were selling rooms 18 months before the Games for US$800 per night, and in June 2008 asking $250 for the same rooms.”
Time your meetings run: Citius, Altius, Fortius.
Wisdom from Mount Olympus:
- Kurt Wehinger, GM of the Grand Millennium Beijing: “The hotel business in L.A. Sydney and Beijing was far from expectations; like during the F1 in Singapore where occupancy and rates were just up marginally over normal levels.”
- CEO of Meeting Professionals International (MPI), Bruce MacMillan:“The Olympics is not just a sporting event. It’s a huge global gathering place that just happens to have sporting events around it.”
- Visit London’s Head of Business and Conventions, Tracy Halliwell:“We don’t want to be an Athens, which has not picked up a major events icon.”
- Atlanta’s Committee for the Olympic Games: “Afterward, we had no debt and we left behind a legacy of privately funded structures the city would not have seen otherwise.”
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