2010 Games: Dreams of Gold

Three years after the 2002 Winter Games in Salt Lake City, a Utah furniture dealer was meeting with a group of visiting businesspeople representing the Vancouver Board of Trade. They had come to learn more about how a community can benefit from a world-class event like the Olympics. When the visitors asked him if having the Games in his state helped his business, the dealer grinned, shook his head and said, “Latvians don’t buy sofas.” Embedded in the joke was a truism that most B.C. businesses should take to heart as the 2010 Games unfold in Vancouver and Whistler: if you were hoping for a windfall of wild and reckless spending from the expected 250,000 visitors, you’ll probably be disappointed. For the most part, business spinoffs will be modest, of limited duration and selective. Hotels, restaurants, ski resorts and security services will do very well, thank you. They always do in mega-events. But even in these sectors, once the Latvians, Americans, Germans and other foreign visitors go home in March, things could get very, very quiet. That sofa may be sitting in your showroom window for another year or so.

The moral: trim your Olympic expectations. And take the long view. “People aren’t coming from around the world to buy furniture or artwork but to enjoy the Games,” says Bernie Magnan, chief economist of the Vancouver Board of Trade. “If you can get them to come back, that’s when you might get them to spend a whole lot of money.” In other words, make them feel good while they’re here and don’t block their views of the breathtaking images of Whistler and English Bay – then maybe they’ll return someday as visitors, investors or entrepreneurs. That’s when the Latvians might open their wallets.

Other business leaders talk about the Games as a leap of faith, driven by the conviction that while the government can’t guarantee a return on all the money being spent to deliver a good show, it’s far better than sitting on one’s hands and doing nothing. Like deer in the headlights, you die if you’re stationary. “The competition is not standing still,” says John Winter, president of the BC Chamber of Commerce.

With this in mind, the B.C. government, through its Commerce Centre in downtown Vancouver, has been hard at work explaining to business-people how to bid on Olympics-related contracts and “connecting” them to opportunities. It has held 250 workshops since opening in 2005 and staged 500 presentations across the province. It also put together a massive data bank to help companies find possible partnerships for bids that they would not be able to handle alone. Meanwhile, the government’s and VANOC’s overall strategy is this: construct the venues, organize things well, put your best face forward on the plasma screens of a billion viewers around the globe and hope there’s a legacy of a more buoyant business climate. “That’s the leap of faith,” says Winter. “When you build it, do they come at the end of the day? That’s the $64,000 question. . . . It’s a leap, but it’s the only leap we’ve got.”

All that leaping sounds too much like Evel Knievel economics for Olympic skeptics and social activist groups. Back in 2003, UBC economist David Green did some number crunching to determine the long-term economic benefits of a Winter Olympics. In a report written for the Canadian Centre for Policy Alternatives (CCPA), he found the benefits to be “extremely limited.” Green looked at Lake Placid, Calgary and Salt Lake City and concluded that, on average, hosting the Winter Games in those cities produced a net gain of only 1,400 new jobs. And most of those jobs happened before and during the Games, specifically in the hospitality and building industries. The CCPA also wonders whether spending a lot of taxpayers’ dollars, while keeping your fingers crossed and hoping for the best, is wise public policy. Will a shaky world economy and concern over climate change inhibit business travel and tourism in the next decade? What does that mean for the viability of enormous convention centres, for example? “Public dollars are too precious to take leaps of faith,” says the CCPA’s B.C. director, Seth Klein. “We should use them wisely and direct them to things where we know spending will result in long-term investments that see us meeting our social and environmental goals.”