Olympics sparks trade boom in host city

Sydney has been left booming since the Games descend on the city and analysts are predicting long-term benefits to the tourism industry

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By  Barnaby Chesterman Published  October 16, 2000

It was the greatest show on earth and it attracted hundreds of thousands of people from across the globe to descend on Sydney.

But the Olympic Games wasn’t just about gold medals, glory and triumph. It was a massive commercial exercise that will have far greater effect on the city in the long term than the concentrated focus during three weeks in September.

The world’s media congregated on mass at the Games and was the single biggest group to attend the Games with over 20,000 accredited press and photographers. But for Australia, the Games wasn’t just about hosting the Olympics, it was about promoting their country to the world.

Every sort of business was booming in Sydney throughout the Games, from bars and restaurants to the more discreet professions Australia’s liberal constitution allows. Darling Harbour, Circular Quay and The Rocks were the most popular places for tourists to eat and drink, with bars and restaurants reporting a dramatic rise in business.

Jordan’s Seafood Restaurant at Darling Harbour claimed to be seating 1,000 people a day, compared with 400-600 before the Olympic period. “We’re packed day and night,” said manager Emma Malone. “It’s the busiest we’ve ever been.”

According to John Morse, managing director of the Australian Tourist Commission (ATC), the Olympics was “a catalyst to publicise Australia’s food, wine, architecture, fashion, the people and, of course, the unique beauty of all parts of the country.” In fact the ATC worked tirelessly with broadcast and print rights holders to ensure they covered all aspects of Australia throughout the duration of the Games.

According to latest figures Australia’s growing profile would result in almost 5 million visitors in 2000. It is hoped by 2008 Australia will be welcoming around 8 million international tourists a year. “Australia has never before experienced media attention on this scale. We’re making sure that inbound tourism, Australia’s biggest export industry, is the big winner from the 2000 Games,” said Morse. “Australia will show the world just how a country can turn an Olympic Games into a decade-long tourism boom.”

This translates favourably into figures as well. The ATC predicts that the international exposure for Sydney, as a direct result of the Games, will result in not only a surge in visitors, but will also add AU $1 billion a year to an industry that is already worth around AU $16 billion annually. That’s an increase of about 7%.

The influence of the Games reaches a far wider scope than just tourism but there are distinctive problems associated with hosting the Olympics. The end of the Games usually signals the post-Olympics property slump that was most noticeable after the Barcelona Games eight years ago. Barcelona had a 240% rise in property prices prior to the Games, the consequence of which was a bust once the show was all over. Sydney didn’t experience the price hike and a report by Macquarie Bank suggests that it won’t suffer the same fate. The report predicts that Sydney’s economy will slow moderately over the next 18 months, but it’s well positioned and financially well managed to cope with the post Olympics environment. “No pre-Olympic property price boom means no post Olympic price gloom,” said Steve Girdis, head of Macquarie Property.

It’s not just a case of avoiding an inevitable slump for Sydney, either. The city is looking forward to an increase in public spending after the Games. According to the city Premier, Bob Carr, New South Wales will have about AU $24 billion to spend on public works projects after the Olympics and Paralympics. In fact more will be spent on public works projects after the Games than before. “In the post-Games period, our capital works spending will be bigger than it was as we put together our Olympic facilities,” said Carr. “Because of our good management, because of our retirement of all that debt, in the budgets after the Games, we’ll be spending more on public works than in the four budgets leading up to the Games.”

“It looks pretty buoyant for the state economy,” he continued. “We’ve got the lowest unemployment in Australia but that hasn’t been driven by the Olympics because the Olympic construction finished about a year ago.” He was also positive about the effects on the tourist industry. Carr suggested that five years after the Olympics, he expected Sydney would have more tourists than in this Olympic year because of the positive global publicity for the city.

The government claims the Sydney Olympics will inject an extra AU $6.5 billion into the economy between 1994 and 2006, mostly from sponsorship fees, media broadcasting rights, ticket sales, new infrastructure and employment. The Olympics represented the biggest ever shop window in Australia’s history, and the country looks set to reap the dividends for many years to come.

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