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SBJ/February 4 - 10, 2002/Games Open In SLC
Sponsors try to unload hotel space and tickets
Published February 4, 2002
Thousands of tickets and hotel rooms have come back on the market in Salt Lake City as sponsors and corporations scaled back their Olympic contingents.
Downtown hotels said they are sold out for the duration of the Games, which start Friday, but several hospitality companies report that sponsors are desperately trying to unload prepaid rooms, and that event tickets are being resold at face value or below.
"There are going to be a lot of empty rooms in Salt Lake," said Mike Reisman, a principal at Connecticut-based Velocity Sports & Entertainment, which is running Verizon's hospitality program at the Games. "There's a lot of inventory that has been sold that nobody's using. There are e-mails going out weekly where a travel broker or a sponsor or an ad agency is looking to liquidate some of their costs."
Consumers looking to book a last-minute Olympic vacation would still likely pay upwards of $600 a night for a room in Salt Lake City or Park City if they went through travel agents selling Olympic packages. But within the loose communication network that binds corporate America, rooms can be found for much less.
Sports industry veterans said there's no question why the glut has developed: the economic downturn and the Sept. 11 terrorist attacks. Fear of terrorism has kept away tourists from overseas, but even before safety became the primary issue facing the Games, many corporations were tightening their belts.
"Several Olympic sponsors we've done business with have cut their numbers dramatically, by 70 percent, in terms of how many people they're bringing," said Rob Tuchman, president of Tuchman Sports Enterprises, a New York-based corporate hospitality specialist. "If they've got rooms, they're basically trying to sell them on the secondary market to guys like us. One company was giving us a discount of 20 to 30 percent just to make back as much of their cost as they could."
Sponsors who have pared their hospitality budgets reportedly include Xerox Corp., Bank of America, Lucent Technologies, AT&T Corp. and Qwest Communications.
Olympic-affiliated companies and sponsors were allocated about 6,000 rooms, said Mark Lewis, president of the Olympic Properties of the United States. They were permitted to return rooms in October, but only 100 became available at that time because many were snatched up by other sponsors. Lewis said no sponsors returned event tickets.
Salt Lake Organizing Committee officials said 88 percent of 1.6 million tickets had been sold as of last week, a record for the Winter Games. They said they expect to meet the goal of $180 million in sales, but were $7 million short with two weeks to go. About 90 of 165 competitions are sold out, according to SLOC.
But the Games' Web site lists most events as having tickets available, generally in the highest price bracket. That can be explained in part by tickets trickling back into the market when camera stands take up less room than expected. For the most part, few tickets are available for indoor events, with the exception of early round hockey games.
"If you look at the figures from past Olympic Games, any time your tickets-sold percentage is in the high 80s, you're doing pretty well," Lewis said.
Tuchman said that in recent weeks, Olympic sales have spiked, as there's been a surge of interest from companies not affiliated with the Olympics that want to send groups of a dozen or fewer employees and customers to the Games.
The shortfall of corporate visitors is not expected to make much of a dent in Olympic-related tourism. Utah officials stand by the original estimate of 1 million people coming to the state for the Games.
If they're wrong, it's the local economy that will suffer most.
"Hotels by and large have their guarantees and should be OK," Reisman said. "It's the licensees and the restaurants and the shops where the economic impact won't be as great."