The Olympics Economic Bonanza

时间:2022-09-07 11:42:40

SINCE Los Angeles unexpectedly reaped a profit in 1984 for the first time in the history of the modern Olympics, the quadrennial event has become an economic bonanza for host cities. Barcelona, for example, achieved a profit of US $26.05 billion in 1992. The Olympic-related economy in Beijing is also picking up as the big event draws near.

Local Sports Industry Prospers

China’s sports industry is the major and most obvious beneficiary of the economic activity associated with world’s largest sports gathering. According to official statistics, the nation’s total investment in the Games amounts to RMB 280 billion. Sixty-four percent of this has been swallowed by the construction of infrastructure, including venues, equipment, and transportation.

Beijing has established a 1,000-hectare Olympic Park in the northern part of the city, and built 12 new venues, transformed or upgraded 11 others, and put up eight temporary structures in and around the park. After the Games, the park and venues will continue to host top sporting events, and provide ample facilities for the public’s sporting activities. The boom is expected to last well beyond August. At the beginning of 2007, the Beijing Municipal Government stated that sports-related businesses are set to be one of the city’s areas of economic growth after 2008.

The consumption of sporting goods comprises a significant part of the sports industry’s earnings. The products and equipment required for the Games alone amount to some RMB 170 million, providing a great opportunity for producers. The newly established venues provide spaces for sports enthusiasts, while the all-pervasive promotion of the Olympics has aroused people’s interest in physical activities. As the Chinese people’s enthusiasm for sports and exercises keeps rising, the general demand for sportswear and athletic equipment has also increased dramatically.

For many small sports brands in China, the Olympics represent a once-in-a-lifetime chance. However, unlike leading names like Adidas and Nike, they cannot afford the status of “official partner,” nor do they have vast budgets for promotion. To garner attention, some of them have signed sponsorship contracts with team delegations from countries such as Iraq, the DPRK and Sudan.

At the big end of town, Beijing is seeking to become an international sports center in the wake of the Games. The city has earmarked RMB 500 million to pursue bids for top post-Olympic events. Although already home to the China Open, the Beijing Marathon and World Snooker, China’s capital is pursuing popular international events like the NBA, NFL and A1 Grand Prix. It is said that officials are already discussing how to build a professional racetrack in the Olympic Park for the Grand Prix event. The World Cup, World Swimming Championships and World Table Tennis Championships are also in the government’s sights.

Ticketing Frenzy

Seven million tickets for the Games, including 60,000 for the opening ceremony, began to go on sale from April 2007. Seventy-five percent of the seats for individual events and 40.8 percent of places at the opening ceremony are earmarked for domestic sale. The Beijing venues are larger than those in Athens, making more tickets available for the general public.

Tickets are being released in three stages. The first from April to September 2007 saw all tickets for the opening and closing ceremonies go on sale, and 50 percent of tickets for individual events. The second round from October to December 2007 saw the release of the remaining 50 percent for individual events. The third and final period from April to September 2008 will allow members of the public to buy tickets for any events that have not been sold out.

Authorities were aware of the Chinese people’s enthusiasm for the Games, but demand for the second release of tickets last October exceeded all expectations. When online sales commenced on October 30 the online booking system was almost instantly paralyzed as hits reached eight-times the bearing capacity. Sales were suspended for five days and the Beijing Organizing Committee issued an apology, saying they had “underestimated people’s passion, and not made adequate preparation.”

Organizers hoped to take US $140 million in ticket sales, a figure it seems will be easily reached. The first release saw 4.9 million people apply for 2.7 million tickets; the second saw 2 million applying for 1.8 million places.

More Hotels,

Higher Prices

The Olympics always attract hordes of visitors to the host city, even after the event is over. During the Games 1.7 million tourists are expected in Beijing, with around one-third coming from overseas. The daily tourist population in August is expected to reach 500,000 people.

December 28, 2007 saw BOCOG unveiling 132 official reception hotels in Beijing and six other host cities. They are designated to receive heads of state, dignitaries, high officials of the International Olympic Committee and committees of other countries, as well as accredited media and sponsors.

The 120 contracted hotels in Beijing include 38 five-star, 45 four-star, 22 three-star or below, and 15 un-rated establishments, providing up to 30,000 rooms. Room rates in August will be two to three times their normal level, with a five-star bed set to cost an average of just under RMB 3,000 a night.

The Games have also generated a boom in new hotels, with 10 luxury establishments due to open in Beijing before August. For most tourists though, economy hotels, youth hostels and home stays are their first choice of accommodation. Last year also witnessed a big jump at this end of the market, with famous chains like Super8, Motel168 and 7Days Inn setting up branches in the capital. There are currently around 130 budget options in Beijing, but this is expected to reach more than 200 by August.

After years of development, Beijing’s hostels have now been brought in line with international standards. Some 30 backpacker establishments can provide over 4,000 beds. Hostel prices are expected to jump five to ten times over their usual levels. Bookings for the Olympics kicked off in early 2007.

To meet the immense demand, the Beijing Municipal Administration of Tourism has also transformed some of Beijing’s traditional quadrangle abodes into temporary home stays for August. A group of pilot homes have already been opened to tourists.

There seems no doubt that come August, Beijing will not only be bursting with athletes and visitors, but also frenzied economic activity.

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