by Jim Byers
Last updated: 3:25 PM ET, Thu February 8, 2018
The world is turning its eyes towards a small town in South Korea as the Winter Olympics began in PyeongChang. A group of Calgary residents are on hand taking in the show as the city contemplates a bid for the 2026 Winter Games.
But a new report throws a rather decidedly wintry bucket of water on the idea that the Olympics are a cure all for tourism.
The Winter Olympics and the Summer Olympic Games are two of the world's biggest sporting events, notes a study from the data and analytics company, GlobalData. Both attract an enormous number of spectators and huge television audiences aroound the world. Airlines and hotels benefit from increased tourist flows - both international and domestic - to the city where the Games are held, and so the city of PyeongChang can expect more demand and hence higher prices.
It sounds pretty rosy. But the latest report from GlobalData, called "Exploring Sports Tourism - Insight into sporting holidays, sport events, and what the future holds for the industry," suggests that more often than not the impact of spending what often amounts to hundreds of millions of dollars is only a short-term gain, and that tourism levels quickly return to normal once the Olympic parade has shuffled off to another city.
''Like so many other host countries, South Korea will face a significant challenge in boosting its tourist industry over the long term on the back of the PyeongChang 2018 Winter Olympic Games," said Sean Hyett, Associate Analyst Travel & Tourism at GlobalData.
For the Rio 2016 Games. which attracted 6.2 million spectators, 70 new hotels and residences were built and a total of $1.6 billion US was invested in the city's tourist industry, he said. But the increase in supply led to a fall in occupancy rates from 66 per cent in 2015 to 58 per cent in 2016 and the city is now left with an excess of hotels.
A review of the London 2012 Summer Games, which achieved 11 million spectators, found that overseas arrivals for third quarter 2012 (the quarter the Games were held) was actually 2.9 per cent lower than the same period the year before. This is known as the "displacement effect," where traditional tourists put off visiting London or other Olympic host cities because of the large expected crowds, while rises in demand for accommodation from domestic tourists raises the cost of visiting for international travellers.
''For such a large and costly event like a Winter Olympics to really be beneficial to South Korea's tourist industry, the tourism board needs to incentivize travellers to visit again in the future or visit other parts of the country," Hyett said.
Presumably the folks in Calgary are considering the same thing, as are the senior governments that they'll need on-side to help fund the 2026 Winter Olympics should the city decide to put a bid before the International Olympic Committee.
One suggestion from GlobalData is that cities offer discounts to popular tourist sites or hotels for future dates. Additionally, to try and negate the 'displacement effect', tourism boards should use similar methods to incentivize tourists to visit other parts of the country while such events are being hosted.
''News articles currently suggest that ticket sales and travel sales for PyeongChang 2018 remain very low so the tourism benefit for these Winter Olympics could prove to be minimal and sustaining a long-term rise will be an even bigger challenge," Hyett said.
I covered six Olympic Games for The Toronto Star in my career at the paper. I also covered the Toronto 1996 Olympic bid, the Toronto 2008 bid (both lost) and the winning Vancouver bid for the 2010 Olympics. I've seen first-hand how cities go wild and paint remarkably unrealistic pictures about how the Olympics will be a life-saver for tourism.
In fairness, some cities do it right and make the Olympics work. Barcelona was nowhere on the Europe tourism map prior to the 1992 Summer Games. But they spent money on wonderful urban projects that helped propel the city to become one of the most popular tourist destinations in the world. Today, in fact, some Barcelona residents complain their city is too popular and that they're overrun with pesky tourists holding up selfie sticks and crowding the streets of Las Ramblas.
Others (hello, Atlanta) seem to have gained very little international prestige from hosting the Olympics.
Which makes the GlobalData study a must-read report for anyone entertaining the idea of a Calgary bid for the 2026 Winter Games. And for Canadians as a whole.
That doesn't mean the Olympics aren't worth pursuing. Done right, they can help provide needed sporting infrastructure and community benefits. They also can help speed up transit project and other civic improvements that might otherwise get mired in thick jungles of red tape.
The International Olympic Committee has made it easier on cities of late by easing off on demands for huge, new arenas and other costly investments. One could argue they had little choice given the dearth of cities willing to bid the last couple times they put the Games up for internationall auction. But it's still a positive move for would-be bid cities.
Still, this latest study suggest that the long-term tourism benefits are something that would-be bid cities need to closely examine before they take the plunge.
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