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Economic Impact of the Winter Olympic & Paralympic Games

News Release
January 16, 2002


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The Economic Impact of the Winter Olympic & Paralympic Games

VIII. It's All About the Media

While the broadcast revenue and other commercialization fees provide a means to finance the Games, the real economic prize is the unique opportunity the Games afford to increase long-term growth in international tourist visits to the province. There is no doubt that the favourable and extensive media exposure surrounding Expo 86 pushed international awareness of British Columbia to a new plateau and induced millions to visit the province both during and in the years following the event. The Olympic Games offer a similar but more intense opportunity to introduce a mass international audience to the destination appeal of British Columbia and to re-ignite the interest of previous visitors in visiting again. The ultimate economic impact of the Games will depend largely on how successfully British Columbia and its tourism industry converts that international exposure into new visitors before, during and after the Games.

While Expo 86 benefited from periodic international media exposure throughout its development phase and the exposition itself, the 2010 Olympic Games will concentrate unprecedented, vast and intense international media attention on the winning host city beginning with the run up to selection by the IOC in 2003 and building through the construction years to a climax during the Games.

While the Games are being held, the host country experiences intense international print, Internet and television exposure. The Nagano Winter Games in 1998 generated more than 6,000 hours of television coverage around the globe. To put this level of exposure into some sort of context, the entire annual tourism promotion budget of the Canadian Tourism Commission for the entire USA in 1998 was about $17 million. That expenditure would purchase about 30 minutes of prime time television advertising exposure on the NBC network in the USA.

International media interest in British Columbia will build with the award of the Games in 2003 and a substantial portion of it will be dedicated to telling its readers and viewers who we are. This substantial and largely free international promotion can be leveraged extensively through cooperative efforts by the national, provincial, municipal and industry marketing agencies in the interests of long-term tourism development. This pre-Games media coverage will have as equally great, if not a greater impact on long-term tourism growth than coverage during the Games event. Most of the media coverage during the Games will focus on the events themselves and hence serves principally to raise international recognition of the names Whistler, Vancouver or British Columbia by their association with the individual competitions. The challenge for the tourism industry and the Province will be to devise a media program that translates that heightened recognition into tourist visits after the Games.

Nor can the role of the Internet be ignored. The official Nagano Games web site set a world and Olympic record, receiving 646 million hits during the 15 days of the Games, peaking at 103,429 hits per minute. While the technology will undoubtedly change dramatically over the decade, the Internet can be expected to play an increasingly pervasive role in tourism promotion and travel decisions.

The 1998 Nagano Winter Games captured 9.2 billion viewers in 26 major market regions of the world. (A person who tunes into the broadcast three times counts as three viewers). According to major sponsors interviewed by Maclean's Magazine, the Olympic audience is uniquely appealing to corporate advertisers, and hence the broadcast networks, because the audience historically is fairly equally split between male and female viewers and attracts many who are not regular TV viewers7. In terms of its sheer scale, the Olympic audience is vastly greater than any other spectator event. These market statistics enticed national broadcasters around the world, such as CBC and NBC, to pay fees aggregating about CDA$1.1 billion to the IOC for the 2002 Winter Olympic Games in Salt Lake City. (The IOC will pass one half of this amount to the Salt Lake Organising Committee.) Those broadcasters will aim to recoup much more than their $1.1 billion outlay through sales of commercial "spots."

It is the broadcast licence fees and the commercial sponsorship contracts, more than any other revenue sources that makes it possible, though not automatic, to structure largely self-financing Games. While audience interest in the Games appears to be strong and growing, the growth in value of broadcast contracts will ultimately be limited by the physical amount of advertising time per hour of broadcast authorized by the television regulatory agencies in each country. For the purposes of this impact model, we have assumed the VW2010 share of broadcast fees stays level with the Salt Lake receipt in real terms.

In the words of Jones Lange LaSalle, the key to success (or otherwise) of hosting major events such as the Olympics is largely dependent upon the ability of the city to leverage off the images and perceptions created during the event itself and to continue to deliver on the dream long after the circus has left town. How well can the city take advantage of the transient and fickle world focus? How indelible are the images? How can they best be sustained? All of these are questions a host city must answer in a strategic approach to leveraging the event.

This model assumes a timely and effective response to this challenge by the Province (Tourism BC), VW2010, the Canadian Tourism Commission and the tourism industry in order to extract the maximum tourism exposure and impact for British Columbia.


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