ECONOMIC
IMPACT OF THE 2010 WINTER GAMES
Faster, higher, stronger*
I. Preface
In October 1998, the Vancouver Whistler 2010 Bid Society formally
submitted a bid to the Canadian Olympic Association (COA) to be the
host "community" for Canada's bid for the 2010 Olympic
Winter Games and Paralympic Games, (hereafter collectively referred
to as the Games or the Winter Games). Vancouver
Whistler was subsequently selected by the COA as the Canadian
contender. In accordance with the required practice, the success of
the bid was followed by dissolution of the Bid Society and formation
of the Vancouver Whistler 2010 Bid Corporation (VW2010).
On July 13, 2001, the International Olympic Committee (IOC)
selected Beijing as the host city for the 2008 Olympic Summer Games
over several contenders, including Toronto. The demise of the
Toronto bid signaled the start of the sprint by VW2010 to finalize a
winning bid for IOC selection in 2003 as host for the 2010 Winter
Games. It also freed up the COA to throw its full weight and
resources behind the 2010 bid.
Why do cities pursue the Games? Cities choose to host Olympic
Games for very different reasons. While the development of sport,
athleticism and world peace are underlying themes of all Olympic
Games, the decision to host an Olympic Games has as much to do with
the social, psychological or economic stimulus that can be derived
from such large events. Some cities have used the Games as a
catalyst for urban renewal. The 2000 summer Olympic Games in Sydney,
for example, were developed on a site that had been home to an
unusable swamp, a meat packing house, a brick works and a munitions
dump. Some countries have used the Games to legitimize their claim
to first world economic status. All hosts aim to rise their
international profile.
Hosting the Games also creates a platform to showcase leading
aspects of the economy or leading edge technology The so-called
"greening" of the Games is a predominant theme in recent
host city selections by the IOC. Sydney responded by, among other
things, developing their athletes village to continue after the
Games as the world's largest solar-powered settlement. British
Columbia might wish to showcase applications of fuel cell
technology, for example.
For British Columbia, hosting the Games is fundamentally an
opportunity to replicate the kind of economic and psychological
stimulus and the considerable enduring incremental economic benefits
the province achieved with Expo 86. The ability of a
"hallmark" event of this nature to foster a public sense
of economic momentum, which in turn fosters new investment and
economic growth, should not be ignored. Unfortunately, there is no
credible method to estimate these impacts with any accuracy before
the event and they are not reflected in numerical outputs reported
in this paper.
Setting aside the non-monetary benefits of the Games, VW2010 and
its guarantor, the Province of British Columbia, will want to know
under what cost and revenue conditions the Games can be expected to
generate a positive incremental economic impact in British
Columbia. The bidding process and construction program required by
the IOC dictates that the host city is selected about seven years
before the event. That schedule forces the bidding cities to make
their bid commitment based on estimates of economic impact and
financial forecasts developed from seven to ten years before the
Games event.
To measure this impact of bidding for and hosting the Games, and
the impact of the attendant international media exposure on tourism
volumes, we have developed a sensitivity model to estimate the Gross
Domestic Product (GDP), tax revenue and employment effects under a
range of cost and tourism conditions. The model is described in
Appendix A and is referred to variously as the model, the
Games model and the 2010 model.
While t he modern Olympic Games have taken place on a more or
less regular schedule for almost 100 years, lack of consistency in
data collection and reporting makes meaningful comparisons amongst
Games impossible except at the broadest level. The comparative
analysis that has been done focuses almost exclusively on the Summer
Games. More significantly, very little academic research focuses on
quantifying the long-term economic impacts of such
hallmark tourism events and little data exists to permit comparison
of forecasts with actual results.
Reports from relatively recent winter Games at Nagano (1998) and
Lillehammer (1994) provide interesting anecdotal evidence but often
lack context. The official Lillehammer post-Games evaluation report,
for example, states overnight visits rose by 65% in the four years
leading up to the Games, but does not distinguish between resident
and non-resident visitors - a critical distinction in calculating
incremental economic impacts.
More difficult still in estimating the likely tourism
implications of the 2010 Games is measurement of the role of
geography and place recognition on visitor volumes. Some evidence
and logic support the proposition that hallmark events like the
Olympic Games, held in high profile and universally recognised
cities such as London or Paris or Los Angeles have a much
smaller impact on international visitor volumes to such cities than
do such events held in less widely known cities, such as Vancouver.
Similarly, countries such as water-locked Australia, geographically
remote from the most of the first world economies, presumably have a
tougher time building the volume of international visitors, even for
hallmark events, than would British Columbia with the USA at its
doorstep.
The seven year gestation stage for the Games exposes the costs
and benefits of the event to a variety of internal and external
risks Ultimately, the economic success of the Games will depend on
early recognition of these risks, development of risk containment
strategies and careful planning, cost control and skillful
execution.
Finally, the economic impact of winning the bid and hosting the
Games is maximised by treating the project as an opportunity to
raise, to a new plateau, international awareness of, and interest in
British Columbia as a year round tourism destination,.
Those seeking a comprehensive understanding of the business and
economics of the Olympic Games are directed to Economics of the
Olympic Games - Hosting the Games 1972 - 2000 by Holger Preuss.1
*Baron Pierre de Coubertin
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