Slow economy may hurt 2010 Olympics ticket sales, tourism spinoff
2 hours ago
VANCOUVER — The credit crisis does not threaten the hosting of the Vancouver 2010 Winter Olympic Games, but a global economic slowdown could dampen ticket sales, tourism spinoffs and overall revenues from the event, economists say.
"There won't be a shortage of people, but there might well be a revenue shortfall and I would certainly expect the early ticket sales to be slow," said James Brander, an economics professor at the University of British Columbia's Sauder School of Business.
"I think it's extremely unlikely we'll see cutbacks in the plans. And, for corporations, reneging on the Olympics would have a huge negative public relations effect. However, it is quite possible that people could do less well than they hoped and take losses instead of profits."
Ed Mansfield, a partner with the economics group at consultant PricewaterhouseCoopers, said a slowdown could also mean a drop in tourism as well as business generated at the Games.
"What has become common is to generate some economic leveraging around the Games. If the world's economy is turbulent, there will be far less of those individuals that will be coming," Mansfield said.
Walt Judas of Tourism Vancouver said there are already signs travel to the city is slowing, especially from the United States and that trend is expected to continue in the coming months. However, he said forecasts are the same for about 350,000 visitors to the city during the Olympics.
Dave Cobb, the Vancouver organizing committee's executive vice-president for revenue, marketing and communications, said while the Olympics are not immune to economic slowdowns, he believes the event will be sold out and make money.
"The economic challenges out there might make it tough, but we are still very confident we are going to achieve that objective," Cobb said.
He said the committee has secured about 90 per cent of its revenues for the event to date.
"We still have a ways to go, but companies we have been in discussion with, we have not seen any drop off in interest from them given what has gone on in the marketplace over the last couple of weeks," Cobb said.
Ticket sales, which started Friday and will take place over the next five weeks, are the last big chunk of revenue the organizing committee has to generate, Cobb said.
"We think probably people are taking a bit longer and thinking more carefully about how they are going to spend their money, but we are still very confident our Games will sell out," he said.
About 1.6 million tickets will be available to the public, representing 70 per cent of the overall tickets being sold to the Games, with prices ranging from $25 to $1,100.
Cobb said even if tourism slows in Vancouver as a result of a lagging economy, it won't hurt the event.
"Is it possible that it could drop off a little bit? I think it probably is," Cobb said. "But it won't drop off to the point where we would have empty hotel rooms and empty seats at our venues."
In fact, he is hoping the Games will help boost the economy, especially considering the committee has about a billion dollars to spend from its operating budget between now and the Games in February 2010.
"It's a big spending year for us coming up. Hopefully that is coming at a time when we are buying products and services from companies that might be struggling a little more," Cobb said.
Jock Finlayson, executive vice-president at the Business Council of British Columbia, said the economic outlook is less rosy for the province in 2009 and 2010, and agrees the Games could provide some stimulation.
"The Olympics will take place in a softer economy that we were probably anticipating a year or two ago," said Finlayson. "It will be a particularly welcome injection of new spending into the economy."