Monday, February 15, 2010

2010 Winter Olympics Good for Vancouver’s Economy

Vancouver Sun: 2010 Vancouver Olympic Games have injected $1 billion into economy: Report Olympics will be good for Vancouver economy
Locate in Kent: Economic Impacts of Olympic Games
CNNMoney: Chicago Loses Olympic Bid to Rio.

The 2010 Winter Olympics in Vancouver began opening ceremonies on Friday, February 12, 2010. Since winning the official bid for the 2010 Olympics in 2003, the question has been how to make the Olympics profitable for Canada, not only right away but for the long term. The accounting firm Price Waterhouse Coopers conducted an independent investigation to determine the effect of the games on Canada and specifically British Columbia’s economies from the time of the bid through 2008. The firm’s report indicated that the Vancouver Olympics has already generated $1 billion for British Columbia. The firm calculated this number by measuring tourism, job creation and the development of businesses. The firm estimated that over six years there were approximately 21,000 new jobs created and Olympic preparation has generated between $684 and $884 million Gross Domestic Product (GDP) in British Columbia as well as an additional $170 in other Canadian provinces.

The numbers create the impression that Canada is much better off than if the Olympics had not come to Canada, but some analysts say that they can be deceiving. For instance, the report did not compare the amount gained by the amount that British Columbia and Canada in general have spent on the Games. The estimated cost of construction and other Game-related costs total around $1.6 billion. A partner from the Price Waterhouse Coopers firm stated that since their report was not intended to draw conclusions but rather to study the effects of the Games on British Columbia’s economy, he was not prepared to pass judgment on the positive or negative nature of the Olympic Games. Regardless of the hesitance of the firm to draw conclusions about the Games, another consulting firm had estimated on the outset that the Games would ultimately net between $2 and $4 million GDP, which puts Canada in the green.

Some say that the Games came at the perfect time for Canada, acting as a stimulus and injecting money into the economy after the global financial crisis. Others point to the fact that the actual tourism benefits have been extremely underwhelming thus far. Original estimates of tourism revenue was calculated at between $30 and $500 million, but actual tourism was reported at around $5 million according to Price Waterhouse Coopers. Many are confident that a final report of the Games will conclude that tourism was on point, the idea being that coverage of the Games will promote the Vancouver and larger British Columbian areas for years to come.

The games continue for two weeks, and final calculations of the Games’ economic impact will not be available for years to come.

Discussion Questions:

1) Do you think the poor attendance at the Vancouver Olympic Games can be attributed to the lack of disposable income due to the recent global financial crisis?

2) Do you think it is possible that Canada will eventually see acceptable profits from tourism because of Olympic coverage or are those profits lost on the financial crisis?

3) Recently, Chicago lost a bid on the 2016 Olympic Games. The bidding process alone cost Chicago and investors $100 million. If Chicago had won the bid, given the current state of the U.S. economy, do you think the resulting Games would have helped revive the city?

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