Editor's Blog: Rio wins Olympics - who benefits?
Rio will host the 2016 summer Olympic Games
Tuesday, 06, Oct 2009 08:23
It's official, the 2016 Olympic Games will be in Rio de Janeiro, and the vibrant Brazilian city will be the proud first country in South America to host the games.
The International Olympic Committee (IOC) selected Rio de Janeiro last Friday over Madrid, Tokyo and Chicago - despite the best efforts of President Obama.
Cities spend significant money and time on bidding for the games and all hope to reap significant economic and promotional benefits. Brazil is already projecting a ten to 15 per cent increase in foreign tourists for 2016 compared to the previous year.
But do the rewards justify the expenditure and will Brazil really benefit from the 2016 games? Natasha von Geldern takes a look for travelbite.co.uk.
The economic impact of Olympic games
Financial benefits come directly from visitors during to the games - participants, spectators, sponsors and media - as well as broadcast revenues and corporate sponsorship.
Income from the sale of television rights has become the biggest earner, followed by sponsorship and ticket sales.
Julie Clark, head of UK sport at PricewaterhouseCoopers LLP explains that "the promotion of the city creates an induced tourism effect as further visitors are attracted to the city's additional media exposure and enhanced international reputation".
The other side of the financial bonanza is money spent on infrastructure in the build up to the big event.
And from this "there is likely to be a multiplier effect, which includes games-related employment and purchasing by local companies, as well as the impact of everyday household spending by employees of the companies benefiting from increased sales", Ms Clark notes.
However, a European Tour Operators Association report confirms that the Olympic Games sometimes put a downer on tourism numbers for the host city and country. This is because people stay away from the region to avoid the crowds and higher prices. This was the case in Beijing and Sydney.
What about the bigger picture?
But what about the long term legacy of holding an Olympic games event? PWC says there is no guarantee the legacy of the Games will be positive.
"To be successful a great deal of careful infrastructure and investment planning is required to ensure there is a fit with the longer term interests of the city," says PWC chief economist John Hawksworth.
The potential tourism spike of Games year can turn into increased visitor numbers for years to come.
Barcelona was very successful financially so what did they do to make it work for them?
How have other Olympic hosts fared?
Of more recent summer Olympic games, Atlanta broke even, Barcelona was very successful and Sydney made a $42 million surplus.
According to the Australian Tourism Commission, the Sydney games saw visitor numbers up by 10.9 per cent in 2000 and the likelihood of potential travellers to visit Australia increased significantly.
Barcelona saw huge benefits through urban renewal and an explosive increase in tourist numbers following the 1992 Olympics, with 1,727,610 tourists in 1991; 2,455,249 in 1993 and 3,149,002 in 2000.
So there is no doubt that sporting tourism can be a huge success, if events are well planned and implemented.
Has Brazil got what it takes?
There is no doubt the beautiful landscape and vibrant culture of Rio de Janeiro make it a spectacular host city and tourism destination.
Brazil will no doubt measure the success of the 2016 Games in terms of the benefit to national pride, international status and using the opportunity to promote itself as a destination. They will also be looking for economic growth, tourist revenue and increased employment.
Apparently the infrastructure is already strong, with the International Congress and Convention Authority (ICCA) naming Brazil as seventh in the world as an international event destination.
The 2016 Olympic Games will follow the football World Cup in 2014 so Brazil can double up on infrastructure and advertising.
Brazilian tourism is already experiencing a record influx of tourism in 2008, with current data indicating foreign tourists spent US$5.785 billion in Brazil last year, an increase of 133 per cent as compared to 2003.
According to Brazilian tourism figures, foreign tourists come to Brazil for sun and beach (44.6 per cent), culture (22.1 per cent), ecotourism (20.6 per cent) and sports (six per cent). On average tourists stay for 15.5 days spending an average US$90 daily.
The organisers will need to push all these activities, not just attending the big sporting events.
"The Olympic Games will promote Rio as a city abroad, but will also represent our entire country," said Brazilian minister of tourism, Luiz Barretto.
"This will provide immense increases in Brazilian tourism and for our economy in the long run." Let's hope he's right.
travelbite.co.uk