![Vancouver 2010 Winter Olympics Games logo [adsoftheworld.com]](http://www.getmoneyenergy.com/wp-content/uploads/2010/01/skijumpingVancouver.jpg "Vancouver 2010 Winter Olympics Games logo [adsoftheworld.com]")
Between February 12 and 28, 2010, all eyes around the world will be on Vancouver, BC, Canada for the 2010 XXI Winter Olympic Games. More than viewers around the world, the Winter Olympics are expected to attract thousands of new visitors, tourists, athletes and Olympic personnel to the lower mainland of British Columbia. But just how much economic benefit from the Olympics can Canada – and BC, in particular, expect?
Vancouver is already starting to practice “Games-time” travel plans as we speak, encouraging drivers to stay off the roads during peak “Games-time” travel hours – to carpool and take public transit instead. Week by week, new roads are being closed in an attempt to reduce municipal traffic by 15% each week leading up to the Winter Games.
In addition to the Winter Olympics, Vancouver and Whistler will also be host one month later to the Paralympic Winter Games from March 12 – 21, 2010. And we don’t have to wait until February to feel the excitement – the lower mainland region is already abuzz with the 2010 Cultural Olympiad, which features Canadian artists and performers from January 22 through March, 2010.
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Sports Competing in Winter Olympics
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The XXI Winter Games will feature the standard schedule of Winter sports: alpine skiing, the biathlon, bobsleigh, cross-country skiing, curling, figure skating, freestyle skiing, ice hockey, Nordic combined, the luge, short track, skeleton, ski jumping, snowboarding and speed skating.
One of the hot Canadian attractions will undoubtedly be Canadian star Sid “the Kid” Crosby of the Pittsburgh Penguins playing for Canada’s Mens’ Hockey team – against his teammate Evgeni Malkin (Team Russia). Crosby attracts media attention wherever he goes, and combining that with the media attention on the games to begin with can only boost advertising revenues.
Speaking of which, the 21st Winter Games fall strategically after the end of the Superbowl in the U.S., so there won’t be any football distracting any television eyeballs. All eyes will be on the Games.
2010 Winter Olympics Ticket Prices
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So how much money will the 21st Winter Games bring in to Vancouver? A lot.
In addition to the simple numbers based on tourism (accomodation costs in an already notoriously sky-high-priced city for rentals and home buying), local restaurants and suppliers will be working overtime to accomodate the athletes, their support staff, Olympic and Paralympic management and staff, extra media crew, and athletes’ families. This doesn’t even get into all the people who are merely coming up to watch part of the Games.
Ticket prices alone run from $175 CAD for a seat at BC Place up to $1,100 CAD for the best seat in the house at the Opening Ceremonies. Closing ceremonies prices are somewhat more modest, capping out at $775 for the top-tier seats. BC Place is the largest air-supported stadium anywhere in the world – and it holds about 60,000 seats. If you do the math, that’s pulling in over $10 million dollars just for attendance at the Opening Ceremonies alone.
60,000 people in BC Place on each night, not counting the athletes, media and personnel – you do the math.
How many people will be coming to the Vancouver Olympics in total? Estimates range from about 5,500+ athletes and staff, 10,000 members of the media, 25,000 volunteers and around 2.5 million attendees. People from over 80 nations are expected to arriving to participate.
It’s going to be great news for the Vancouver and British Columbian economy, since this will be the first ever Olympics hosted in BC (and just the third-ever Olympics to be hosted in Canada).
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Economics of the 2010 Winter Olympics
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As of late 2009, the total operating costs of the XXI Winter Games is estimated around $1.76 billion CAD ($200 million of which will be spent on security (and some money spent on creating and storing extra snow in order to have enough snow for downhill events in the case that outdoor temperatures rise and mountain snow melts). About $580 million CAD is expected to come out of taxpayers’ pockets. And after the financial meltdown in 2008-2009, concerns have risen about the ability of the Olympics to make back its costs.
BC Place alone will bring in at least $20 million just from seat sales, but that’s only just over one percent of the total projected cost of the Olympics. Ticket sales to individual sports events might also bring in a huge draw – Vancouver 2010 Games Tickets are now in the “auction” stage, where the highest bidder wins.
To give you a sense of the bidding prices, seats for Opening Ceremonies night are running as high as $4, 550 CAD right now. A single ticket to the closing night ceremony is sitting at $1600, and a seat to a preliminary Men’s Hockey game is $1400. Yeah, I think they will have no problem making their money back!
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Olympics and the Canadian Dollar
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The loonie dropped off sharply after the watershed Massachusetts election on January 19 – but it was due for a pullback, anyway. The Canadian dollar has been climbing against the US dollar since the “end” of the financial crisis back in March 2009. Most analysts have been expecting it to reach parity – and some even see the loonie inching past parity – in the first half of 2010.
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If the U.S. sees a double-dip recession, there’s a small chance global money could flow into the greenback again, but from what I’ve heard the rest of the world won’t be taking the same measures this time now that news about what’s been going on economically – under the economic carpet, if you will – is out and well-known.
The Canadian dollar has been floating between 95 and 97 cents U.S. for the past few months, but as we near the Olympics I wouldn’t be surprised to see it inch higher. Americans visiting Vancouver in February might want to buy some Canadian dollars now while the greenback has gained some temporary strength.
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Olympics and the Canadian Economy
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Canada’s resource-rich economy has enabled it to bounce back from the brink fairly quickly compared to the beleaguered consumer-driven economy south of the border, but that doesn’t mean there aren’t economic problems in Canada still waiting to come to the fore.
Take this Whistler ski resort that just yesterday fell to foreclosure and was seized by the banks for failing to make a debt payment on time. The ironic thing about the story is that this ski resort will be host to some of the downhill skiing Olympic events and is probably going to be auctioned off during the games themselves.
One of IntraWest Properties’ assets includes Whistler-Blackcomb, a major ski resort in its own right, and one of the key downhill venues for the Winter Games. IntraWest is owned by Fortress, a major hedge fund, which has been having debt problems following their 2006 leveraged buy-out (at the height of the market) of IntraWest and missed a payment of about $500 million USD on an IntraWest loan.
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IntraWest owns many ski resorts, which tourists have stopped coming to over the past year and a half, and Fortress has had economic problems on the private equity side. The irony of the story is that this missed payment was due to be Fortress’ last payment for IntraWest after which they would have been in the clear. It was due in October 2009, but they staved off their creditors in the meantime by selling other properties (including their Copper Mountain resort in Colorado). To add irony to irony, one of the creditors is Lehman, which went bankrupt itself at the beginning of the crisis.
Wilmington Trust (who represents the creditors) put an ad in the Wall Street Journal yesterday giving notice that they would be putting Whistler-Blackcomb and Mont Tremblant resorts (in Quebec) up for sale at a foreclosure auction on February 19, 2010. This date, of course, falls right in the middle of the Olympics. There is some question as to whether Whistler’s foreclosure will have a ripple effect on the Olympics, but VANOC (Vancouver organizing committee) has apparently declined to comment, saying that they are on the line for a $50 million guarantee and are working closely with Whistler-Blackcomb.
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Investing in the Olympics
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I’d be hard pressed to suggest that any given type of stock or sector would do particularly well as a result of the Winter Olympics, but if you wanted to try a Winter Olympics play of your own, you might consider a broad-based Canadian index investment like the TSX Composite. You could also look specifically at Canadian oil stocks or Canadian natural gas stocks.
Other suggestions include real estate and commercial property investment trusts, which of course, can’t be expected to climb simply due to a media and entertainment event such as this. But there is one road that leads to better investments: profits. The more money spent in Vancouver and Whistler, the more earnings any company associated with the Olympics will take in. I’ll keep you posted as we get closer to the big day.
Until then, tell me what you’re looking forward to! Are you going to Vancouver, or will you be watching it from home? Favorite sport? I’m betting on Canada for at least 22 medals, at least 16 gold and silver (I reserve the right to improve my bets!).
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{ 4 comments }
Hey nice post!
I’m from Vancouver, and you’re right, the lane closures are getting pretty hairy!! Everyone’s expected to either walk or bike to work during the olympics. They’re even asking us to give an extra 3 hours if we’re planning to take Transit. AND they’re hiking the transit fares during that month (sheesh- as if we haven’t paid enough taxes etc.!)
Did you hear that Intrawest is planning to put Whistler Blackcomb up for sale (or more accurately, it’s lenders are doing that, Intrawest apparently missed a payment). This wont’ happen until after the olympics though.
Wow – so what is the one-zone skytrain fare up to now? Yes, I heard about Intrawest – have they changed the date of the auction? Originally it was set during the Olympics.
Yup, you have to purchase an “add-on” fee. But you can buy a fancy-schmancy olympics souvenir style fare card. I think the one-zone is usually about $73, for the olympic period- which is a little over a month, it will be $112.
I’m going to cycle because I have a feeling it’s going to be crrrrazy.
I’m not sure when the auction is.. I heard on the radio that it shouldn’t affect the olympics.
I guess I won’t get the Intrawest people calling my house at dinner time asking me whether I want to buy one of their 3 night packages anymore..! Lol.
to mouch money
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