The popularity of the Olympic Games is indisputable – the world audience, filled with spectators, tourists, investors possessing financial assets and striving for memorable moments, encourages politicians to think about the possibility of hosting the games in their country.
I have been living in an emotional, tough and boiling atmosphere for 6 years ever since Sochi was chosen as a host city of the 2014 Winter Olympic Games – an atmosphere of preparation, Games propaganda and community engagement. Ironically, on the threshold of this historical event there are a lot of violent discussions, concerning two issues – 1. The Games as a positive branding opportunity for Russia or 2. An economical, ecological and social barbarism to Russian society. So I wonder whether the so-called “Olympic mania” could actually be a lucrative gambit for the host nation or just a useless way of wasting money.
National image booster
No doubt, hosting an event of such scale might be profitable for those who drastically needs the exposure, since it provides a good platform where a host country can improve its national image. Russia tends to restore its credibility, expand international contacts, prove the fact that it has achieved something during its 20 years of independence and let the world discover the New Russia.
Every international event (for instance, 2009 Eurovision, 2013 Universiade in Kazan, 2014 FIA Formula 1 Russian Grand Prix, 2018 FIFA World Cup, possibly hosting the 2020 World Expo) is seen as a regeneration and re-branding project. If we take into account the assumed size of the Sochi Olympics audience (3.5 billion people are supposed to be watching the event on TV), it will be accurate to talk about a perfect way of broadcasting Russian hospitality, culture, organisational power, achievements and business potential. Generally speaking, Olympic bids put the issue about “country branding and tourists/investors attraction” high on their agendas.
Brand giants gain sales and profits
International multi-sport events grant an opportunity to the global corporate networking companies to promote the Games brand and keep their role as the Games sponsors. Here such giants as Volkswagen, Coca-Cola, Procter & Gamble are worth mentioning. As an example of the Games brand promotion, the Volkswagen used the brand “Sochi-2014” in their limited edition cars: the “Sochi Edition”. For sure, it is a commercial profit for both sides – Volkswagen will undoubtedly increase their sales and brand recognition.
Furthermore, internationally recognisable events help create a place that will possess a great value for other brands in the sphere of fashion, tourism, entertainment and so on. The singularity of Sochi comes from the fact that this city is very far from the world megalopolises such as London, Rio de Janeiro, Tokyo. Also, Sochi had not been urbanised and renovated till the announcement of its candidacy for the Winter Olympic Games. Throughout history Sochi was a destination for summer holidays (par excellence, for domestic tourists, not foreigners). And now it is becoming a place of commercial interest for Louis Vuitton (this French fashion house opened its boutique in Sochi, the 5th one in a Russian market), hotel brands including Marriott, Hilton, Kempinski, and even for the Australian AJ Hacket Extreme sports and Adventure park (known for its astounding bungee jumping structures).
Artificial city brand manufacturing
I would like to point out once again – the Sochi project is considered an example of possibly successful city development from its origins as a destination for inner summer tourism, to the international city brand operating in both winter and summer contexts. The process of Sochi’s manufacturing is not natural. Indeed, it can be considered artificial (since the time when Sochi was chosen as a host city, we have seen a steep increase in construction, infrastructure development and an enormous influx of workers). As I have already said, a number of experts are debating the issue of the Games causing damage to society and environment. The arguments concerning population eviction from the territories planned for Olympic objects, the Black Sea pollution, deforestation and so on, which make up the list of possible negative outcomes.
The problem lies in the lack of necessary Olympic infrastructure, since the sports objects are only being constructed these days (the cases of Madrid’s bid for the 2020 Summer Games or Glasgow 2014 Commonwealth Games show the commitment of these cities to using and re-using the existent sports infrastructure, thus proving their flexibility). Moreover, hosting the international event is a very costly business. The Sochi Winter Games are supposed to be the priciest Olympic Games since they are on course to cost $51 billion (in comparison with 2012 London Olympics with their $30 billion and 2008 Beijing Games cost $40 billion).
No guarantees for future success from Games
The experience of Beijing 2008 or Athens 2004 proves that a drop in hotel bookings and the usual effect of sport stadiums abandonment after the Games do not guarantee a cushion that will offset the huge financial cost. In this sense the Sochi project may fail to meet politicians’ expectations, namely by failing to attract the extra tourists that are supposed to be arriving annually to Sochi after the Games.
In theory, the Sochi project will present a brand-new place to the world audience, a new tourist destination and new venue for doing business. But the reality may be less favourable.
Tolerance expected: can Russia deliver?
A further challenge to consider – the impact of inner-country matters in political and civic dimensions on the world perception of Russia and Sochi-brand. While Russian laws and reforms (for example, anti-LGTB actions, as they are known in Western society) are viewed as an anti-democratic vector in Russian policy, the appeals to boycott the Games will occur more often. The world expects every host city to be secure and tolerant. Maybe the Sochi project should have included the issue about tolerance on its agenda as Rio de Janeiro did, with appeals to exterminate hostility, insecurity and social imbalances. Terrorism, civic rights abuse, corruption and high prices – all these negative aspects related to Russia – could scare away tourists and investors from the idea of coming to Russia again and again.
Inevitably, in case with Sochi the general Russian brand puts great pressure on the Sochi image. It will be adequate to point out that only two cities – St.Petersburg and Moscow – have their own strong positions in the international market, while the newly appeared Sochi project must endure a long list of tests on its way to gaining a successful tourist and commercial image.
The last point I want to focus on is about celebrities and their contribution to the Games and host city advertising. The tool of using celebrities in promoting the Olympic brand, host country and city is effectively used as leverage for branding strategy. Here are some ideas concerning this assumption. First of all, London-2012 created a highly memorable and effective (from the commercial and “aesthetic” point of view) promotional film called “Sport at heart”, featuring British celebrities. The high popularity of Western celebrities is undisputable and overwhelming, that is why the performance of David Beckham in the London-2012 film was such a winning move.
Russian stars mainly target the Russian domestic market. So for foreign audience seeing them in advertisement will be a kind of confusing situation (at least, it will not provoke the usual emotions and associations). Secondly, the Internet industry facilitates the process of brand promotion. For example, during the London-2012 Games the celebrities’ tweets supporting the Olympic teams unintentionally played a significant role in the Games branding strategy (mostly for the U.S. community with its well-developed system of communication between celebrities, politicians and ordinary people).
The question about popularity of the Russian film and music industry is beyond the scope of this article. Nevertheless, the event organisers should take into account the necessity of using a more creative and modern approach to brand promotion. The strategy of world celebrities’ involvement in the Sochi project would offer a wide variety of new channels to help promote Games brand recognition.
All in all: a high risk endeavour
Finally I would like to highlight that hosting events of an international interest is a high-risk endeavour unless all details of its planning, organisation and promotion are scrutinised properly. For sure, hosting the Games has a number of functions: broadcasting the host country’s image, attracting investors and tourists, developing the host city, integrating the national community.
No doubt, there is a popular belief that after the Sochi Games the built infrastructure will become irrelevant for the sports audience and consumers. What is more, there is no exact data on the amount of sold tickets to the Olympiad, so it might be too early to forecast the ROI of Sochi’s Olympic Games.
Despite these critical points, I want to stress that the Russian society has a strong aspiration to share and promote its vision on how to host the Games. We believe the Sochi project has a strong advantage – combining summer and winter offers in one place. Therefore, the importance of hosting international events is obvious for Russia – it will let us be more open and put the point about flexibility on our agenda. That being said, let’s get ready for one more memorable moment in Sochi next year.