• IOC ready to raise price of its TOP program

    The International Olympic Committee plans to increase the price of sponsoring The Olympic Partner program, ending a decade-long period where official Olympic sponsorships averaged $25 million a year.

    The price increases would kick in for the 2022 and 2024 Olympics, said Timo Lumme, IOC television and marketing services managing director. The organization has seven TOP sponsors committed to 2020 and will be working over the next year on renewals with Panasonic, Samsung and Atos Origin, which are all signed through 2016.

    Lumme says the IOC would consider trimming the number of TOP sponsors.
    “Pricing of TOP has to reflect market conditions,” Lumme said. “Once we start getting into the sales cycle post-2020, there will certainly be a price revision.”

    The plan to increase pricing comes as the IOC completes its third review of TOP since the program was created in 1985. TOP was designed to give brands an opportunity to affiliate with the Olympics and promote their association with the property worldwide. The program has become one of the pre-eminent global sponsorship packages in sports, raising more than $3 billion since its inception and increasing in value by nearly 50 percent in the last decade, from $663 million for the 2001-04 quadrennium to $1 billion for the 2013-16 quadrennium.

    But the price TOP sponsors pay, which is pegged at $100 million a quadrennium in just rights fees, has been scrutinized in recent years as the value of local organizing committee sponsorships for the Beijing, London, Sochi and Rio Games have soared. Local sponsors such as Volkswagen paid $100 million to sponsor the Beijing Games, and Nissan reportedly paid $250 million for its sponsorship of the Rio Games. Those sponsors receive rights to activate only in the host country of the Games, while TOP sponsors, who pay the same amount or less on average, get rights in the host country and exclusive rights to use the Olympic rings worldwide.

    Lumme said the rising prices that local organizing committee sponsors pay is one of the reasons the IOC is looking at its pricing of TOP. He did not say how much the IOC would increase the fee. Ultimately, that will be a decision made by the organization’s new president, Thomas Bach.

    “We have to present the TOP program and our thoughts on the future and future strategies to him and make sure he’s comfortable with it,” Lumme said. “I foresee we start having those conversations [with sponsors about new prices] if not in Sochi, shortly thereafter.”

    21 Marketing founder Rob Prazmark, who helped create TOP in the 1980s and was hired by the IOC to evaluate the program in 2009, believes the IOC could charge TOP sponsors $200 million per quadrennium — double the current fee. The IOC will have to add more assets to justify that type of increase, such as TV media time, but Prazmark believes the price increase is feasible.

    “The cost of TOP is a bargain for these global partners compared to if you had to go out and buy these rights individually,” Prazmark said. “There are only two [major] global sponsorship programs in the world. This and FIFA, and companies that get involved with TOP do it because of brand, not price. This is why I think going forward past 2020, it’s time to not only redo the program but redo the pricing.”

    The increases will carry some risk. Prazmark said that the last time the IOC tried to increase sponsorship prices significantly in the early 1990s, it lost three or four sponsors. But it managed to find new partners and set a market rate that was consistent across most of the 10 to 12 TOP sponsors. The program has seen limited turnover among sponsors since then because of the value and assets it offers.

    “If they were able to increase it to $200 million a sponsor, you could shrink the number of sponsors from 12 to six and increase revenue from TOP from $1 billion to $1.2 billion,” Prazmark said. “You’d be distributing the wealth across six companies and then be able to release the categories back to the national Olympic committees and organizing committees to let them raise more money on their own.”

    Lumme said that contracting the maximum number of TOP sponsors from 12 to six is something that the IOC would consider.

    “I would start with the default position that we would have 10, 11 or 12 [sponsors], unless actually the market drives us to having less,” Lumme said. “That means that if the market is willing to pay a premium, or the amount that would justify us having less partners, and if the IOC, national Olympic committees and organizing committees all feel we’re winners, then I would look at anything.”

    But beyond that, the IOC has been reluctant to disclose any other changes it’s contemplating for TOP. During the 125th IOC Session earlier this month, IOC Marketing Commission Chair Gerhard Heiberg said only that the IOC will continue to cap the number of sponsors at 10 or 12 so that enough categories remain for the Olympic organizing committees and national Olympic committees to sell.

    Tags: Olympics, IOC, Panasonic, Samsung
  • Paralympics to get live coverage from Sochi

    NBC showed 5.5 hours from the London Paralympics; live Sochi coverage will reach 50 hours.
    Photo by: GETTY IMAGES
    NBC Sports Group is completing a deal to carry next year’s Paralympic Winter Games from Sochi live in the U.S. for the first time.

    The deal, which NBC is making in partnership with the U.S. Olympic Committee, will result in 50 hours of coverage on NBC and NBC Sports Network, a major increase in broadcast coverage from the 5.5 hours of tape-delayed coverage the network offered during the London Paralympic Games last year. Additionally, NBC Sports Group has agreed to provide live streams to all Paralympic events that include American athletes for USParalympics.org. Unlike the Olympic Games — where broadband users have to be authenticated to download streams — anyone with a computer connection can stream these Paralympic events.

    The deal has been close for the past month. The main deal terms have been agreed upon, but there are some minor issues that have needed to be ironed out. A formal announcement is expected soon.

    “We look forward to announcing a new partnership with the USOC soon that will provide unprecedented coverage of the Paralympic Winter Games,” NBC Olympics President Gary Zenkel said.

    NBC was criticized by disability groups and the International Paralympic Committee last year for not broadcasting more of the 2012 Paralympic Games. Though the company paid the International Olympic Committee a $1.2 billion rights fee for the London Games, the deal didn’t include Paralympic rights, and NBC did not acquire those rights from the IPC. The USOC did and sublicensed a 90-minute special to NBC and a four-hour cable package to NBC Sports Network.

    IPC President Philip Craven last year criticized NBC’s lack of interest in the London Paralympic rights, saying, “I’m very disappointed for the athletes and I’m also very disappointed for the hundreds of millions of people who live in North America who don’t have the opportunity on a very easy basis to access what will be amazing images. Some people think that North America always leads on everything, and on this they don’t.”

    A team of USOC and NBC executives traveled to the IPC’s headquarters in Bonn, Germany, over the summer and pitched the IPC on a rights agreement. The partners are paying a rights fee, but financial terms of the agreement weren’t available. The deal is expected to be completed early next week.

    The coverage plan from Sochi is much more extensive than previous Paralympics. NBC offered only a 90-minute recap of the Beijing Paralympics and 5.5 hours of tape-delayed coverage from London. For Sochi, it has committed to carry around 3.5 hours on its broadcast network and 46.5 hours on its cable channel, NBCSN.

    Coverage starts March 7 with the opening ceremony and runs through the closing ceremony March 16.

    The Winter Paralympics is made up of five sports: alpine skiing, biathlon, cross country skiing, sled hockey and wheelchair curling.

    Tags: NBC, Olympics
  • USOC expands 100-day countdown for Sochi

    The U.S. Olympic Committee has doubled the number of sponsors that will participate in its third pre-Olympic, 100-day-out celebration.

    Twelve sponsors will activate during the event, which will take place Oct. 29 in Times Square. The USOC charged sponsors to be part of the program, but financial terms weren’t available.

    The USOC expects to more than double attendance from the London event last year.
    Photo by: USOC
    The USOC expects more than 170,000 people to pass through the event. That’s more than double the 75,000 visitors who came to the inaugural 100-day-out celebration before the 2010 Vancouver Games.

    “It’s grown and people now understand what it can be,” said USOC chief marketer Lisa Baird.

    Liberty Mutual signed on to title sponsor the event and the Road to Sochi Tour, which will take Olympic sports exhibitions and interactive elements to 12 more stops between November and February. The company will use the series of events to launch and showcase its Olympic advertising campaign in an experiential booth.

    “Given its national footprint, our presenting sponsorship of the Road to Sochi Tour provides Liberty Mutual Insurance the opportunity to expose the brand to millions of Olympic fans across the country leading up to and through the Olympic Winter Games, while also engaging thousands of our employees,” said Paul Alexander, Liberty Mutual’s senior vice president of communications.

    The other sponsors participating are Coca-Cola, AT&T, Budweiser, Chobani, Folgers, The Hartford, Hilton, Jif, Kellogg’s, United and Smucker’s jams.

    Each sponsor receives activation space in the 100-days-out footprint in Times Square. They also are a presenting sponsor of one of 12 interactive sports elements that visitors can try. For example, Budweiser will be the presenting sponsor of a hockey slap shot contest. The company, which is participating in its first 100-days-out event, also plans to bring the Clydesdales to Times Square.

    Rendering shows activation space for the 100-day-out celebration Oct. 29 in Times Square.
    Image by: USOC
    Baird said the USOC had more success in convincing sponsors to sign on for the event because it was able to show them the media value and exposure they would receive in Times Square. The 100-day countdown to the London Games drew 175,000 visitors and resulted in 150 million media impressions, according to the USOC.

    “The first time we were just hoping sponsors came on board and tried this out,” Baird said. “Now there’s a lot more value built in for sponsors looking to connect it to [return on investment].”

    The USOC has secured 12 billboards in Times Square on Oct. 29. It will use the billboards to show USOC logos and branding and footage of Pilobolus, a performance company that will be doing a show as part of the event.

    Team Epic helped the USOC plan the event.

    Tags: USOC, Olympics
  • IOC hands Bach power, challenges

    An hour after his election as president of the International Olympic Committee, Thomas Bach was fielding media questions about Russia’s anti-gay laws and Brazil’s construction delays in Rio when Sochi 2014 CEO Dmitry Chernyshenko tapped his shoulder.

    “President Putin,” Chernyshenko said as he handed Bach a mobile phone.

    New IOC President Thomas Bach
    Photo by: GETTY IMAGES
    Bach stepped away from the press and chatted with the Russian president for a few minutes. When he returned, he smiled broadly and his cheeks reddened.

    “We did not discuss the law,” he said, chuckling.

    The call signaled just how much life changed for Bach last week. He came to Buenos Aires as a 59-year-old German lawyer, the head of Germany’s national Olympic committee and one of six candidates vying to become the IOC’s ninth president, taking over for Belgian Jacques Rogge. He left holding one of the most powerful jobs in global sports — a position so prestigious that heads of state call to extend their congratulations.

    This was the IOC’s second presidential election in 30 years, and Bach began campaigning for it years ago. His efforts made him a front-runner going into the election and earned him a second-round victory over a field that included Sergey Bubka, the Ukrainian pole vaulting gold medalist; Richard Carrión, the Puerto Rican CEO of Banco Popular; Ng Ser Miang, the Singaporean businessman; Denis Oswald, a Swiss lawyer and Olympic rower; and C.K. Wu, the Taiwanese architect and head of the boxing federation.

    “We knew all the candidates, but he ticked all the boxes,” said Australian IOC member John Coates. “He’s president of a [national Olympic committee]. He’s an athlete. He’s got good corporate background. He negotiated TV rights deals. He’s the full package.”

    In the end, it was the combination of all of those things and extensive lobbying that won Bach’s fellow members’ confidence. His election closed one of the busiest IOC sessions in recent years.

    Over a period of five days at the Hilton Buenos Aires in the city’s redeveloped dock area, the organization awarded Tokyo the 2020 Summer Games, put wrestling back into the Olympics and named a new president.

    At the center of it all was Kuwaiti IOC member Sheikh Ahmad Al-Fahad Al-Sabah, who has emerged as one of the organization’s power brokers. The sheikh, who is the president of the Olympic Council of Asia, placed his support behind all three winners, and though none of them were a long shot, his influence was considered important enough that some observers even developed shorthand for Ahmad’s well-known preferences, calling it the “TWB strategy” — Tokyo, wrestling, Bach.

    The significance of his support was on full display when he arrived at Tokyo’s victory celebration. When Ahmad came through the door, the party practically stopped. The room parted and people stood to each side applauding as he walked through the party, nodding to the pleased Japanese delegation. It was a stunning scene of international sports influence.

    In terms of the presidential race, Ahmad made it known early and, in violation of IOC rules, publicly that he was supporting Bach’s candidacy. Throughout the week, he could be seen in the hotel lobby, shaking some members’ hands and kissing others on the cheek. He even huddled with Bach at the start of the hourlong coffee break preceding the vote, and then they split up and worked the room separately.

    The other candidates campaigned alone around them. Wu could be seen with one arm over the shoulder of Spanish IOC member Juan Antonio Samaranch Jr., and Bubka and Carrión appealed one-on-one to several fellow members. Each of them knew that their only chance was for the vote to go far enough beyond two rounds so that enough voters could shift from eliminated candidates to create a true rival to Bach.

    But that never happened. Bach won in the second round, and when it was finally over, the sheikh expressed some regret that the focus seemed to be on him rather than the new president.

    “I am not upset for what people say about me,” Ahmad said when asked about the perception that he’s a power broker. “I am upset that we would decrease the reality of Bach. Bach is one of the main people who play a role in the movement. He was always on the [executive board]. He has a lot of mettle in the Olympic Games and always when there was difficulty, Bach was one of the IOC members depended on by Samaranch or Jacques Rogge. Don’t give me more power and decrease the gentleman.”

    Bach gets an IOC in better shape than when predecessor Jacques Rogge became president.
    Photo by: GETTY IMAGES
    Ahmad had a point. As much as he may have done to lobby on Bach’s behalf, it was the German’s unparalleled résumé that helped him win the support of members. He won a gold medal in fencing at the 1976 Olympics, served on the executive board since 1996, chaired the organization’s legal commission and led the German Olympic committee, one of the world’s largest and most commercially successful.

    For all the controversy the sheikh’s support stoked, Bach’s election surprised few. He is the organization’s fourth consecutive European president, dating more than 40 years, and he provides the type of continuity IOC members wanted as the organization looks to the future.

    Rather than proposing radical changes, his campaign was built around the promise of bringing the organization together and building consensus. He said he wants to evaluate the organization’s bid city process, procedures for selecting new sports for the Olympics and explore the possibility of launching an Olympic TV network. But he’s made no specific promises on anything and said he wouldn’t look at an Olympic network for at least five years.

    He takes over the IOC in far better shape than when Rogge became president 12 years ago. There is nearly $1 billion in reserves and the IOC has expanded its footprint into China, Russia and Brazil. But a host of challenges remain.

    Sponsors have been unsettled by the way the IOC has responded to gay rights advocates’ criticism of Russia’s anti-gay propaganda law, and preparations for the 2016 Rio Olympics are behind schedule.

    There also is concern about the future of the IOC’s business model. The organization’s prestigious TOP program is under pressure to change the pricing or structure and assets it offers worldwide sponsors. Carrión, who also serves as the IOC’s audit commission chairman, told members that revenue growth will be modest in the years ahead.

    Bach is as equipped as anyone to tackle those issues. Viewed as decisive and dependable, his eye for strategy and business opportunity was on display in his work with the IOC television and marketing services to change the organization’s approach to TV rights in Europe. He spearheaded a new strategy that involved moving from selling regional rights in Europe and Asia to selling national rights in each country. In Europe, the approach led to a $133 million increase in TV rights by selling rights in Italy, Germany, the United Kingdom and elsewhere.

    But in the moments after the IOC election, Bach’s focus was elsewhere. He stood at a high-top table in the Hilton lobby with his wife eating lunch as IOC member after IOC member came over to congratulate him.

    Eventually, someone handed him a photocopy of the official vote tally. He ran his finger beneath his name and across the paper to the number 49. He shook his head and smiled, still in disbelief.

    Tags: Media, Russia, Brazil, IOC, Olympics
  • Quotes from the IOC session

    For the president

    IOC members offered their thoughts on the biggest issues facing new President Thomas Bach

    Prince Albert II, Monaco: Although the numbers coming out of London in terms of TV viewers were great, we always have to find ways of making not only the Olympic program but the values that make up our movement still meaningful to younger generations and the public at large. We have to be careful that we don’t slide down the ladder.

    Sheikh Ahmad Al-Fahad Al-Sabah, Kuwait: We still have illegal betting, the economy, doping is a major problem and [the] Sochi Winter Games. The mechanism for choosing sport, which sport to go out, which sport to go in. What is the criteria, what is the mechanism, should be more clear. There are a lot of issues for the movement.

    Richard Carrión, Puerto Rico: We know that the revenue line will flat-line in the next quadrennium because I don’t think the television growth will show such a large increase. Flat-line may be overstating the case because there will be 10 to 15 percent growth in television revenue. We also have to deal with the impact of new media and how the economic model of new media will impact revenue and, more importantly, how we use new media to help people experience the Games. We will have to program for these new platforms.

    Gunilla Lindberg, Sweden: We have a lot of things to work on. The Olympic program and the magnitude of the Games. It’s huge today.

    John Coates, Australia: The biggest issue is Rio. There’s a fair bit of work to be done on that. The Olympic Games is what we’re here for and that’s what needs to be the priority.

    Gerhard Heiberg, Norway: He has to sit with the sponsors we have and ensure he’s interested in helping and supporting them. He has to get into the business side and look at the questions we have with sponsors and TV partners. He has to make some business calls.

    Patrick Baumann, Switzerland: Get the Rio Games on track. He needs to make sure they’re a success and as fast as possible. There are some obstacles to that. They have good people but there are issues.

    René Fasel, Switzerland: The size of the Games and the cost of a Games for a city organizing it is a huge question mark. We have to try to find solutions. How can we reduce the cost of the investment a city has to do? How can we make it better for future bidding cities?

    Kevan Gosper, Australia: The success of a president rests on the outcome of the Olympic Games, so his biggest challenge is to ensure Brazil is on track. Sochi is pretty much on track, but he’s got to involve himself in that.

    Dick Pound, Canada: You’ve got to get your hands on the [Olympic sports program process] right away. Every time we try to do something we get it wrong. We get pushed into crazy decisions like there are 25 core sports rather than 28. I’m an Olympic fan, but we don’t have 25 core sports. We may have 15.

    Angela Ruggiero, United States: You have to make sure you’re taking care of the athletes. In most cases, Olympians are still amateurs. We dedicate our lives to competing at the Olympic Games, so really understanding the struggles the athletes are going through is important. Pay attention to the athlete career program that helps transition from sport into careers afterward.

    Tags: IOC, Olympics
  • Is time right for U.S. Olympic bid?

    The moment Tokyo was selected to host the 2020 Olympics, International Olympic Committee members and bid consultants began looking ahead to the campaign for the 2024 Summer Games and, in particular, whether the United States would mount a bid.

    Many, including influential Kuwaiti IOC member Sheikh Ahmad Al-Fahad Al-Sabah, who supported Tokyo’s winning Olympic bid, and Michael Payne, who worked on Istanbul’s bid, said the time was right for the U.S. to put forward a host city again. Though several cities, including Dallas and Washington, D.C., have announced their interest in hosting the 2024 Games, the U.S. Olympic Committee hasn’t committed to putting a city forward.

    Speaking last week, USOC Chairman Larry Probst said that the organization plans to discuss the matter at its board meeting in December. He added that it will discuss whether to move forward and how it will select a city.

    A city would need to be selected in 2014, and the bid process would begin in 2015.

    “We appreciate [the sheikh’s] enthusiasm for a bid from the United States, but that’s something we’ve got to be very thoughtful about,” Probst said. “If we do decide to move forward with a 2024 bid, we’ll try to put ourselves in the best position possible to be successful … with a great technical bid and a great bid leader.”

    Mike Lee, chairman of Vero Communications and a consultant on Rio 2016’s bid, said that all of the moves the USOC has made since Chicago’s losing bid in 2009 to host the 2016 Games put the U.S. in good position for a successful bid. Chicago’s failed effort came on heels of New York City losing a bid in 2005 to host the 2012 Games.

    Sheikh Ahmad Al-Fahad Al-Sabah, who backed Tokyo’s bid, says the U.S. should mount a bid for 2024.
    Photo by: GETTY IMAGES
    Over the last three years, the organization has stabilized its leadership and completed a new revenue-sharing agreement with the IOC that will see it contribute more money to the cost of the Olympic Games in the future. That’s helped the USOC improve its standing and the perception of the U.S. in the IOC.

    But Lee said that Tokyo’s selection means the USOC will face strong competition for 2024. Had Madrid won, that would have taken European cities like Paris and Rome out of play, and an Istanbul win might have taken both European and Middle Eastern cities out of the picture.

    “It’s going to be an interesting and strong field,” Lee said. “With the decision to go to Tokyo, you can see at least one challenge possibly from a strong European city. There’s also been an indication a bid will come from the Middle East, specifically Doha.”

    Probst said Tokyo’s selection won’t affect the USOC’s decision. He said the USOC will create criteria to select a U.S. bid city.

    “We have to put ourselves in the best possible position to win, and realistically, that’s not a huge number of cities,” he said. “It’s got to be a city that is compelling to people around the world, that resonates with all the IOC membership. You’ve got to have a story that’s, ‘Why America, why that particular city?’ If we’re going to bid, we want to win the bid.”

    Payne agreed, saying, “If they put one up, it’s got to win. The U.S. can’t afford to put up a city that doesn’t absolutely nail it this time.”

    Tags: Olympics, IOC, USOC
  • Tokyo best option for 2020 Games

    The competition to host the 2020 Olympics wasn’t a beauty contest. It was a contest to see what city concealed its blemishes best. And Tokyo won that battle with ease.

    After all, what’s a minor nuclear leak compared to an economy that is in tatters or a violent crackdown on protesters?

    “The other two were just too risky,” International Olympic Committee member Denis Oswald said of Istanbul and Madrid after the Sept. 7 vote.

    Risk was what the IOC wanted to avoid this time. It’s dealing with enough of that these days. Its gamble on Sochi has been repaid by overspending — to the tune of $50 billion — and international condemnation of Russia’s anti-gay legislation. Its bet on Rio and the promise of South America is being overshadowed by concerns about construction delays. And Pyeongchang has the shadow of North Korea and its missile tests looming over it.

    That’s why Tokyo fell just six votes short of winning the election outright in the first round, and it’s why the city won with a clear 60-36 majority in the second round. Compared with its peers, Tokyo offered the best option for the Olympic brand, right now. It’s a dependable city that has hosted the Games before; it has a strong infrastructure in place and $4.5 billion in the bank to build 10 new venues; and it has the world’s third-largest GDP.

    Tokyo was exactly what the IOC wanted: Safe, dependable, financially sound and, relatively speaking, risk free.

    Tags: Olympics, IOC
  • Notes from the 125th IOC Session

    Probst named to IOC

    U.S. Olympic Committee Chairman Larry Probst became the fourth U.S. representative to the IOC last week, following a 71-20 vote by IOC members.

    The election came four years after Probst attended his first IOC session in Copenhagen, Denmark, and watched the IOC eliminate Chicago in the first round of the campaign to host the 2016 Olympics. He subsequently hired a new CEO in Scott Blackmun, and the two of them worked hard over the last four years to improve the organization’s relationship with IOC members.

    “Obviously, there were some issues that needed to be addressed and problems solved,” Probst said. “The entire team, Scott and his team, myself and our IOC members, have worked hard the last four years to move things in a positive direction, and this is symbolic of making some significant progress.”

    Probst joins Anita DeFrantz, Jim Easton and Angela Ruggiero as U.S. members of the IOC.

    DeFrantz wins board seat

    Anita DeFrantz beat out Canadian Dick Pound and Malaysian Prince Tunku Imran for the only vacant seat on the IOC Executive Board. The former Olympic rower previously served on the executive board from 1992 to 2001.

    “Having Anita on the executive board is a big deal and it’s good news for the USOC and the United States,” Probst said.

    Wrestling retains its hold

    Seven months after being dropped from the Olympic program, wrestling persuaded the IOC to give it a second chance. The sport received 49 votes from IOC members, giving it a first-round majority over competitors baseball and softball (24 votes) and squash (22), which also were vying for one final spot in the 2020 Olympics.

    Wrestling was the clear favorite coming into the vote, but its federation had to answer more than a half-dozen questions from IOC members about everything from alleged corruption to gender equality.

    “Wrestling has changed,” said FILA President Nenad Lalovic. “Wrestling has become a modernized sport ready to compete with other sports. We persuaded the IOC members [that] our improved sport will support the Olympic movement.”

    Tags: IOC, Olympics
  • Reservations about hotel situation in Sochi

    It’s 10 months before the Sochi Games, and USA Hockey Executive Director Dave Ogrean is worried. His organization still hasn’t secured hotel rooms for the 2014 Winter Olympics — and his national governing body isn’t alone.

    None of the eight U.S. winter national governing bodies has finalized its accommodation plans for Sochi. Executives at each one said that wasn’t the case at this point ahead of the 2010 Vancouver Games or the 2006 Torino Games. The situation, which also extends to their sponsors and some Team USA sponsors, has them concerned.

    “We’re not close at all,” said Ogrean, who needs at least 20 rooms for staff and board members during the Games. “It may not be until summer until we get something worked out.”

    U.S. Figure Skating’s chief marketer, Ramsey Baker, said his organization has finalized some hotels but that it is having a hard time helping the families of its athletes secure accommodations.

    Sochi is still largely under construction, including new hotel rooms. Existing hotels like the Radisson (above) are booking up.
    Photo by: GETTY IMAGES (2)
    “In Vancouver, people were able to figure it out on their own,” Baker said. “In Sochi, they can’t figure it out.”

    Hospitality experts said there are a variety of factors in play for the Sochi Games that have made securing hotel rooms difficult. The Sochi Games mark the first time in more than two decades that the International Olympic Committee has taken a Winter Olympics to an undeveloped market. Lillehammer (1994), Nagano (1998), Salt Lake City (2002), Turin (2006) and Vancouver (2010) all had an existing infrastructure that was able to accommodate many of the more than 40,000 guests that travel to a Winter Games.

    But Sochi is still largely under construction. The region didn’t have an existing hotel infrastructure, and many of the needed new hotels are still being built. Between 2012 and 2018, the number of hotel rooms provided by international hotel chains ranging from Hyatt to Marriott to Capella is expected to rise from nearly 22,000 rooms to 47,000 rooms.

    Additionally, construction on some of those planned hotels has been halted, said Raffaella Cinti, who is based in Sochi and working on behalf of the Olympic hospitality agency Ludus Tours, which is assisting USA Luge with its accommodations in Russia. The decision to halt construction has made agencies like Ludus uncomfortable booking hotels that aren’t finished.

    “As a buyer of rooms, I don’t feel comfortable getting a hotel that might not be finished,” Cinti said. “Right now, there are eight buildings that were supposed to be finished and be hotels, but the government stopped the work. We’re not sure if they will start again.”

    Further complicating matters is the fact that many of the rooms at new hotels are being held by Sochi Olympic organizers for official Olympic sponsors and IOC officials. SportsMark CEO Steve Skubic said he experienced the complications that can come from that practice firsthand when he visited last month for Olympic test events. The group was supposed to be just four people, and SportsMark reserved four rooms at a Radisson near the ski resort of Rosa Khutor. Two weeks later, four other people decided to join the trip, and they called to reserve rooms, but there were none available at the Radisson. A week or so before they departed, they got a call from the Radisson, offering rooms that had become available.

    “What’s happening is that you have the organizing committee holding all these rooms until they know what they need, and then they’re released,” said Skubic, whose agency works with Visa, Procter & Gamble and other Olympic sponsors. “The same thing could be happening for the Olympics, as well. They could be waiting to be sure they have enough rooms for the Olympic family and sponsors, and then they will release them.”

    The other problem NGBs and hospitality agencies are running into is that there are few Western-style options outside the new hotels. Sochi is littered with what are known locally as mini hotels, two- or three-star local establishments that have just a handful of rooms and limited services. Many don’t have a reception area, lounge or restaurant, and most aren’t accustomed to Western expectations of lodging services.

    Pricing for those hotels is an issue, as well. Cinti said that she’s staying in one now that has no reception area, no lounge and no restaurant. She compared it to an apartment — and said that the property is charging $450 a night during the Olympics and is requiring people to reserve it for 30 days. That translates to a total cost of more than $13,000.

    “To me, that’s a lot,” Cinti said. “The prices aren’t higher [than past Olympics], but it’s just you won’t get the same experience.”

    Reserving rooms for the entire month of the Games is unrealistic for many NGBs and the families of Team USA members. Usually, NGB executives and families of athletes go to the Games around the time of their competition. In the case of luge, that’s just the first week of the Sochi Games. In the case of US Biathlon, that’s approximately 18 days. By booking rooms during just the time they need to be there, they could save thousands of dollars per room, which is significant for these nonprofit organizations.

    “We’ve gotten a price, but we’re not happy with it,” said US Biathlon CEO Max Cobb, who said his group was quoted $750 a night for a 30-night minimum. “We just want to find a little more value-oriented package.”

    U.S. Figure Skating is trying to alleviate some of the cost for families traveling to Sochi by creating a donor program to underwrite travel costs. The initiative, which is called the Family Tree Program, allows donors to purchase “a leaf” for $20.14. The money raised will go to offsetting travel costs for families of Team USA members. Three people have made $5,000 grants, and Puffs, a figure skating sponsor, matched one $50 gift in January with a $450 donation.

    “We looked at it and realized Sochi was different than Vancouver and it won’t be as easy,” Baker said. “The amount of housing available isn’t present, and it will be expensive to fly to Sochi. Knowing that in the past it’s been a concern for athletes that their families can afford to go, we know that will be even more of a concern in Sochi.”

    Tom Kelly, U.S. Ski & Snowboard Association vice president of communications, was one of the few NGB executives who said he wasn’t concerned about securing accommodations. The NGB began working on its room needs and planning for Sochi three years ago, and though it hasn’t finalized its housing plans, Kelly said it has three or four options in Krasnaya Polyana, which will host alpine events, and expects to have confirmation on multiple hotels and condominiums soon.

    “We don’t have a concern, but we have a lot of work to do,” Kelly said. “We knew we would have a lot of work to do.”

    The organization has made some changes to its hospitality plans for Sochi. In Turin and Vancouver, it rented space to host nightly medal celebrations. Kelly said it was difficult finding space to rent for comparable events in Sochi, so it will have a “mobile victory celebration” that will change each night based on where the organization makes dinner reservations.

    “It’s a really different [host city], so you have to make adjustments,” Kelly said. “There’s no comparison to previous Games because there’s not a tourism infrastructure in place.”

    Ogrean echoed that sentiment, saying that he’s sure USA Hockey and the other NGBs will secure rooms, but that it will take time.

    “If you have a cast iron stove and patience,” he said, “it always works out, but it will be later this year than usual.”

    Tags: Hockey, Olympics, Torino
  • Olympic Ratings: Prime-Time Trends


    Closing Ceremony
    16th Day (Saturday)
    15th Day (Friday)
    14th Day (Thursday)
    13th Day (Wednesday)
    12th Day (Tuesday)
    11th Day (Monday)
    10th Day (Sunday)
    9th Day (Saturday)
    8th Day (Friday)
    7th Day (Thursday)
    6th Day (Wednesday)
    5th Day (Tuesday)
    4th Day (Monday)
    3rd Day (Sunday)
    2nd Day (Saturday)
    Opening Ceremony
    17-DAY AVG.

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