Thursday, October 23, 2014

Will Games Boost Russian Economy?

The 2014 Olympic Games in Sochi have been laced with problems, from failed graphics, to hotel problems, to terror threats. Needless to say, the Olympic Planning Committee has been fighting an uphill battle.

Since the threats of terror never seemed to develop, aesthetic problems, like awkward bathrooms, yellow water and unfinished hotels, have taken center stage in the host city. The whole preparation, which took seven years, cost more than $50 billion, ringing in as the most expensive Olympic Games ever.

Granted, there seems to have been a myriad of unfortunate events in Sochi, however, we live in a speak-before-you-think, instantaneous culture. The truth is, some host cities are already established as international destinations. Sochi, and Russia as a whole, is not a vacation destination. In fact, tourism accounts for only 1.5 percent of the entire nation’s economy. The seaside city of Sochi has come a long way.

When he first saw the Olympic city, artist Marc Ahr, who has painted every Olympic landscape since 1992 said, “I was so distressed by what I saw then. I didn’t see what I could paint because there was nothing there.”

This is only Sochi’s second time garnishing the international spotlight. Joseph Stalin built a vacation home along the coast in 1937. At that point, the city became a haven for elites who enjoyed the Stalinist Empire style.

Seven years may seem like ample preparation time, but think about it. Not only did the Russians have to create an Olympic village, but they also had to create hotels, dining and entertainment. The host city’s planners have to think past the games. After all of their spending, Russia is hoping to have created a landmark travel destination.

“It depends on the Russian government’s efforts to attract new tourists to Sochi, which we estimate need to increase by 2.5 or three times, after the Olympics to ensure that the majority of the hotels are full,” Timothy Heritage and Keith Weir, analysts for Moody’s rating firm, told Reuters.

Most of the private investment in the host city went to the hotel and resort sector. Putin is hoping to create a resort destination that will long outlast the Olympic celebration.

The second a host city is chosen for the Olympic Games, the world turns its glaring light to the envied location. The microscopic focus both showcases the good and sheds light on the not-yet-good. After the games, improvements can be made and successes can be accentuated. The Athens Games cost $15 billon, and nothing remains but vacated sports complexes.

The Barcelona Games cost $9.3 billion, and Spain’s labor seems to have produced long-term benefits in tourism. Time will tell if Sochi is a success story or just another Athens.

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