Group Created with Sketch.
Volume 23 No. 13
  • Created with Sketch.
  • Created with Sketch.
  • Created with Sketch.

Rio presents serious logistical challenges

Hospitality consultant Don Dow skipped the last Olympic Games in Sochi, sensing a logistical hassle of epic proportions and depressed traveler interest.

Next year’s Olympics in Rio de Janeiro promise to present nearly as many challenges, but the demand could not be more different, Dow said. It seems like everybody wants to go to Brazil, just like during the 2014 World Cup.

Therein lies the monumental task facing businesses hoping to leverage the Olympic platform in 2016: Throw a party in a city that is simultaneously one of the world’s most desirable tourist destinations, an unconventional business culture and a logistical nightmare.

Traffic can get jammed in Rio, with or without a major event, but transportation is only one of the hurdles to overcome.
Photo by: Getty Images
“The reality of it is, it’s the Olympics, right? And people are willing to go through the steps they need to go and enjoy them,” said Dow, who has handled travel for clients such as Morgan Stanley and the NFL.

After hosting two major FIFA soccer tournaments since 2013 and preparing for the Olympics for six years now, it’s easy to assume Brazil has the global event hosting concept down pat. But the Olympics will concentrate the crowds into a single city from a far wider array of countries over a shorter period of time than the World Cup.

One year out from the Summer Games, planners are finding acceptable hotel rooms nearly impossible to find.
They’re either reserved by the International Olympic Committee or exorbitantly expensive.

Commercial real estate is tough, too. Good spots for corporate showcases or hospitality houses are long sold out, driving local organizers to set up space in shopping malls, a tactic met with skepticism from marketers.

At iconic Copacabana Beach and Ipanema Beach, there’s nowhere to park coach buses. Traffic congestion is a common fear, and security issues are never far beneath the surface.

“We have to remember that Brazil is an emerging market,” said Kirsten Hunt, a vice president on IMG’s Olympic consulting team, which represents General Electric and Visa. “And certain things that those in more developed markets have come to expect will be different for someone experiencing Brazil for the first time.”

Lessons learned from World Cup

Fortunately, most major sports marketing consultants or travel advisers aren’t doing Brazil for the first time, and lessons from the World Cup are being integrated into planning when possible. For instance, Dow built his own roster of bilingual drivers for clients’ transportation needs, after experiencing difficulties with subcontractors in 2014.

Companies that sponsored the FIFA events generally held onto the showcase space they had reserved, knowing it

would be hard to get them back, said Tom Shepard, partner at 21 Marketing, which represents Rio sponsor Ernst & Young. Rio 2016 is relocating stores out of a shopping mall to facilitate product showcases, but that falls short of the prestige image sponsors want.

“You will still see sponsors who have found the right locations, and are going to use them in the sense that we have come to know for the houses, or for product showcasing,” Shepard said. “You’ll still see that, but you’re not going to see nearly as much of it as you did in London.”

Accommodations top the list of concerns for corporate guests without official ties to the IOC, which reserves rooms for partners. After getting a taste of mega-event price elasticity during the World Cup, hoteliers are pricing luxury rooms during the Games at $1,000 a night, with a 21-night minimum, Dow said. The same rooms go for $200 regularly and went for $600 during the World Cup, he said.

Real estate becomes even more important amid widespread pessimism about transportation and traffic. Moving between the four major Olympic “clusters” will not be easy, planners say, and places like Copacabana Beach will quickly become overrun if coach buses filled with guests converge on the narrow beachfront streets. GMR Marketing, which represents Visa, Procter & Gamble, General Electric, Cisco and Ernst & Young, is trying to find private land to park buses near the beach, said Luciana Wolf, GMR’s event operations director in Brazil.

Much work remains

For all the fretting about the ancillary aspects of the Games, Olympic specialists are confident in the Rio 2016 organizing committee. In July, Joaquim Monteiro de Carvalho, president of the city of Rio de Janeiro’s Olympic office, said Olympic construction was 55 percent completed and promised an on-time completion to the $13.2 billion infrastructure projects.

That’s far behind the pace of the London Games, and the late surge appears certain to inflate Rio’s costs. But corporate Olympic specialists are sanguine about the delays, especially those who saw far more urgent construction issues solved in Athens in 2004 and Sochi in 2014 and have faith in the IOC, which has been helping Rio get caught up.

In March, Rio staged a beach volleyball match at Copacabana Beach, which despite its popularity with tourists, lacks adequate parking for coach buses.
Photo by: Getty Images
“The venues will be finished, we’ll have the competition,” said U.S. Olympic Committee CEO Scott Blackmun. “They may be laying sod the morning of the opening ceremony, but that’s OK.”

Some of the delays are emblematic of the business culture in Rio, where relationships sometimes trump contracts and multiple agents represent the same property or service, several consultants said. That unpredictability, plus the Brazilian recession, has contributed to a “just-in-time delivery” approach to preparations that worries corporate planners. But few believe the core experience will be hurt by the delays.

Planners are pleasantly surprised by the lack of civil unrest in Brazil, considering the rising unemployment and recent political scandals. The 2013 Confederations Cup was marred by violent anti-government protests, but two years later that movement has not returned despite the recession.

“To date, I would agree the situation is not as it was during the Confederations Cup, but I think there is some concern as to what it’s going to look like over the next year,” said Ana Shapiro, vice president of Rio 2016 operations for GMR Marketing.

Street crime remains at the forefront of many executives’ concerns, though. Formal Olympic venues will be safe, Dow said, but pickpockets and muggers are rampant just a few blocks out of the limelight. “If I’m on the Copacabana, I will not walk two blocks in after 7 o’clock at night,” he said.

Aykan Azar, co-managing director of Octagon Brazil in Rio, downplayed fears of incomplete infrastructure or an economic downturn hurting the Games. He’s confident the Games will be a success and Olympic partners and corporate clients will achieve their goals. But, he acknowledges, there’s a high degree of difficulty inherent in the city.

“Brazil is not for beginners,” he said. “You just have to have a very good understanding of the environment you’re in.”



On the ground in Rio
Meet some of the executives playing key roles in the run-up to the 2016 Summer Games.

RENATO CIUCHINI
Chief commercial officer, CMO
Rio 2016

Despite a growing recession in Brazil and a crowded market thanks to the FIFA World Cup in 2014, Ciuchini’s team has sold more than $1 billion in local sponsorship for the Summer Games.

AYKAN AZAR


Co-managing director
Octagon Brazil

Azar is leveraging experience with the London Olympics and the 2014 World Cup to lead consulting on behalf of official Summer Games sponsors Cisco, Skol and Estácio.

CELSO SCHVARTZER
Latin American lead
GMR Marketing

Based out of São Paulo, Schvartzer oversees a growing team that handles sponsorship and hospitality for companies such as Visa, Procter & Gamble, General Electric, Under Armour and Cisco.

LUIZA TRAJANO


CEO
Magazine Luiza

Trajano, in charge of Brazilian retail chain Magazine Luiza, was appointed in June by Brazilian President Dilma Rousseff as president of the Public Olympic Council. The authority is a body of local, regional and federal officials with ultimate political authority over Rio’s host duties.

EDUARDO SOLIS
Senior director, global
sponsorship marketing
Visa

Solis is the iconic Olympic sponsor’s top man in Brazil, launching the payment provider’s Olympic strategy immediately after wrapping up its work on the FIFA World Cup in 2014.

— Compiled by Ben Fischer