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ECONOMIC IMPACT OF THE 2010 WINTER GAMES X. The Economic Impact of the 2010 Games - Initial Estimates Given the aforementioned cost structure and our tourism estimates, the Net Present Value of the economic impacts of the Games over the observation period would fall into the range described below. All dollar values are presented as year 2001 dollars. As is demonstrated in the summary impact tables below, job creation would be a very significant outcome of the Games initiative. The calculation methodology and interpretation of these jobs are set out in Appendix A, attached. Through Expo 86, British Columbia demonstrated that it has the spirit, capability and volunteerism to stage a very successful hallmark event. The greatest achievement of Expo 86 was the marketing of British Columbia to the world, which it did with a degree of success never since matched in Canada. In generating these outcomes described below, the model assumes the Games generate a Legacy Fund just equal to the post-Games net cost of maintaining and operating the facilities. Any surplus in the Fund would add to the incremental benefits while a deficit would require additional provincial spending which would increase the gross impact but not the incremental impact. As noted earlier, there are a variety of health, safety, psychological and other benefits not immediately quantifiable which will arise from the Games development program which are not captured in the following impact tables. There are also substantial long-term tourism benefits extending well beyond 2015 associated with the proposed recreational infrastructure development in the Callaghan Valley that are not captured in these tables. Arthur Andersen is conducting a separate assessment of the impact of the Callaghan Valley development on the region. The following tables summarise the anticipated gross and incremental benefits under four tourism marketing and capture scenarios as described below. It is important to note that the gains achieved in moving forward from the Low Effort scenario to the Best Effort scenario are gains that are achievable largely by "working smarter" on the marketing challenge - maximising coordination, cooperation and sophistication amongst the national, provincial, regional, municipal and industry marketing agencies to define and deliver a sustained, highly defined marketing program with the greatest market penetration potential.
Summary Table of Gross Economic Impacts -2010 Games1
Summary Table of Incremental Economic Impacts - 2010 Games1
1 Note: Dollar values are Net Present Value of the benefit streams 2001 - 2020 , in 2001 dollars.2 Note: Aggregate of person-years of employment over the period. See Appendix A for description.There are also some potentially very substantial economic synergies associated with developing the Vancouver Convention and Exhibition Centre expansion in concert with the Games development. The VCEC expansion would provide a critical facility needed for the Games while the international media attention surrounding the development of the Games would have a positive influence on international convention delegate growth. To reiterate, the economic impacts of the VCEC expansion have been modeled separately, independent from the Games initiative, based on international delegate attendance and expenditure projections developed by KPMG. The results of that modeling exercise are summarised below. As with the Games impact analysis, the incremental benefits presented below, for the province and Canada from the VCEC expansion, are the benefits accruing only from the spending in the province and in Canada, respectively, by foreign delegates and Canadian delegates who would otherwise have spent their convention dollars abroad. That is, net new revenue into the province, or kept in the province/Canada, that is unique to the expansion project. Hence, the incremental impacts of the expansion are wholly additional to the impacts of the Games, recorded above, for both Canada and the Province. These summary VCEC expansion impact tables do not include any coincident or subsequent tourism impacts created by delegate attendance in the province, due to lack of reliable data. Nevertheless, there is ample anecdotal evidence of delegate travel behaviour to suggest significant numbers of international delegates (25% in the sole survey we could locate) stay extra days before or after a convention, or return later with the family for a vacation. Consequently, the VCEC impact tables probably significantly underestimate the impact of expansion. Only the incremental impacts of the VCEC expansion have been calculated. These are summarized below. The gross impacts would be considerably larger in all categories. The scenarios described below indicate the proposed senior governments' share of the projected $495 million cost of the expansion will be recovered by senior governments 1.9 to 3.4 times over. Summary Table of Incremental Economic Impacts - VCEC Expansion3
Note: Net Present Value of the benefit stream over the 30 year economic life of the asset. 4 Note: Aggregate of person-years of employment over the 30 year period. See Appendix A for description.If the games and the initiative and the VCEC expansion program are developed in concert, the combined incremental impact would be expected to fall within the range described in the following table. Summary Table of Incremental Economic Impacts - VCEC Expansion & Games5
Note: Dollar Values are Net Present Value of the respective benefit streams, in 2001 dollars 6 Note: Aggregate of person-years of employment over the observation period. See Appendix A for descriptionConclusion As the model and the experiences of former host cities illustrate, hosting the 2010 Winter Olympic Games and Paralympic Games can be a very rewarding exercise for the host communities and the province under appropriate circumstances. The economic rewards are largely dependent on striking an appropriate balance between the all-in cost of hosting the Games and the visitor volumes than can be generated before, during and following the Games. As Expo 86, Calgary'88 and other hallmark events have demonstrated, a long-term boost in visitor volumes can be achieved with a combination of well-executed Games delivery and a media campaign carefully designed to integrate with, and take full advantage of, the international broadcast coverage before and during the Games. If the success of Expo 86 is any indication, and taking into account the inherent differences between an Olympic event and an exposition, a well-executed campaign around the 2010 Games should be expected to generate incremental benefits for Canada and British Columbia in the range represented by the Better Effort/Better Response and Best Effort/Best Response lines in the preceding table.
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