A blueprint for business success at the Olympics

photo courtesy of Patrick Harroch

Whistler businesses see varying success at the Games

By Jesse Ferreras, Pique Newsmagazine

February 9, 2011

 

When it comes to making money off the Olympics, the message is simple: plan ahead and don’t get greedy.

A town needs to plan early and long to ensure a fun experience and tell its story to the world – in Whistler’s case, the tale of a #1 ski resort ready to welcome the world.

The Whistler Chamber of Commerce set right to work helping businesses take advantage of the Games when the bid was announced in 2003. As Chamber President Fiona Famulak tells it, the Games were presented as a “long term pitch” to local businesses.

“It was a great opportunity for our individual businesses to showcase themselves, either through media attention or through face-to-face interaction with the guests while they were here,” she says in an interview.

“That was the high level pitch, and all the way along, we emphasized that their success should not be measured in terms of dollars in the 17 days of the Games, but rather the impression and impact they made on the guest in the 17 days, and that would carry us through for the next 17 years.”

The Chamber quickly sketched out a profile for the Olympic guest. Visitors would be in Whistler for a short time, take in the Games and the sights around them and then leave.

“We found that location, location, location was the important thing,” Famulak says. “So the businesses located on the Village Stroll had a great Olympics because we learned from other Olympic cities, the Olympic guest does not stray too far from the core.”

Beneficiaries of a prominent location on the Village Stroll included Araxi, which is situated in Village Square, an area generally recognized as the heart of Whistler.

Executive Chef James Walt says his restaurant capitalized on Games business by introducing a lunch menu, a feature Araxi doesn’t normally offer in the winter. It also fielded several inquiries about group availability from executives at VISA, Coca-Cola and McDonald’s.

The restaurant had a 95 per cent dinner occupancy at Games-time and people had hardly a hope of getting a reservation. A lunch menu gave the Games-going public a chance to dine at what Gordon Ramsay called the finest of locations where he filmed his popular show, Hell’s Kitchen.

“We had something like 4,000 reservations prior to the Olympics,” Walt says, adding Olympic traffic peaked on the first day after the Opening Ceremonies.

“It just filled right up and we kind of never really looked back. We were chockablock from that day right to the end.”

Wayne Katz, the owner of Moguls, Gone Bakery and Zog’s, had a more varying experience. His food outlets were open 24 hours during the Games, regardless of circumstances.

“We hired more staff, we bit the bullet,” Katz says. “I was excited about this and for the community, so for me it was a big thing.

“I just wanted to do a good job and yes, I want to make money, but I didn’t expect we were going to make millions.”

Of all his businesses, Zog’s did the best due to its location near a booth where CTV hosted its Olympic broadcasts.

“We had CTV located right beside Zog’s and of course that was just amazing,” he says. “The way it was set up on opposite sides, it just led to drawing a lot of people in front of our place. It helped a lot.”

Gone Bakery, a café inside the Hearthstone Lodge, also did well during the Games, according to Katz. The café was open for breakfast and it drew much traffic from the International Broadcast Centre, a media hub located inside and adjacent to the Whistler Conference Centre. Patrons came in seeking quick food like coffee, muffins and wraps.

Moguls, a popular café in Whistler Village, saw less traffic during the Games because it was located directly behind a performance stage in Village Square.

Ultimately, as he predicted, his businesses didn’t make much more during the Olympics than previous winters despite the time and effort he put into them. He says that business was down about five to eight per cent from what he’s seen thus far this winter, but he’s nevertheless satisfied with his Olympic experience.

Beyond the food industry, retail outlets along the Village Stroll saw plenty of traffic. The Coast Mountain Shirt Company had a section of its store set aside for merchandise produced by Bosco Sport, the official clothing manufacturer for the Russian Olympic Team.

Owner Patrick Harroch says he made an agreement with Bosco whereby 75 per cent of the store would be set aside for Russian clothing and 25 per cent would be his own merchandise. The deal with the Russians essentially turned his store into Whistler’s “Russia House,” which was “quite a hit” with the Olympic crowd.

Despite setting aside only 25 per cent of space in his store for his own product, his returns were almost equal to that of Bosco Sport.

“February was an exceptional month,” he says. “We’ll never see figures like that again. It was above our high estimates so we were pleasantly surprised.”

This winter, however, has been a different story. Traffic is substantially lower than previous years. Harroch says “Olympic hangover” has been cited as one of the factors impacting business in Whistler this winter but he’s not convinced that’s the case.

“The worldwide economy is awful,” he says. “The Americans are still in big trouble. And the Europeans, before we just had to deal with the Americans, but still had a lot of Europeans coming. Now Europe is also in big trouble and we’re being hit.”

Moving off the Village Stroll, businesses saw lower returns than they would normally see in a winter season.

Whistler Blackcomb, for one, saw fewer skier visits in 2010, going from 1,878,000 visits in 2009 to 1,667,000 the following winter, as detailed in a Management Discussion and Analysis paper. Profits for lift operations went from $104,336,000 in 2009 to $90,194,000 in 2010, and the company’s ski school, retail, rental and food services dropped as well.

The numbers were attributed largely to Olympic aversion, the stigma that Whistler could be inaccessible for tourists due to the Games, but highway and parking restrictions were also cited as factors that drove people away. For use of its venues and a projected drop in business, Whistler Blackcomb got a $32.3 million payment from the Olympic organizing committee.

The Olympics were nevertheless a boon for the company’s worldwide exposure. According to that same paper, awareness of Whistler grew from 19 per cent to 42 per cent in Germany; 48 per cent to 62 per cent in Australia; and 32 per cent to 45 per cent in the United Kingdom.

“There is an interesting stat that Park City, Utah saw winter visits increase 6.2 per cent over the five years after the Games,” a company spokesperson said.

“Whistler Blackcomb isn’t expecting that level of growth as we’re in a different economic climate but we are working to leverage the attention of the world the Games afforded us, matching this increased awareness with compelling packages fostering increased skier visits and, in the long run, becoming the no. 1 mountain resort in the world.”

Ziptrek Ecotours, a unique tour operator that offers zipline tours through the forests surrounding Whistler, was another business outside the Village that may benefit from long-term exposure during the Games.

Owner David Udow says that February 2010 was a “sacrificial” month for his business, a period of low profits that were offset by the opportunity he had to showcase his business in Vancouver.

Ziptrek had been working with Tourism BC for several years before the Olympics and the company became very active with its media programs, taking journalists and others on tours as part of initiatives to promote the province.

A key opportunity came at Rendezvous Canada 2008, a major travel trade show held at GM Place (now Rogers Arena). There were 2,000 people there with bands, DJ’s and bartenders, and organizers thought it might jazz up the event to set up a zipline from one side of the arena to the other.

Once exhibited there, a representative from Tourism BC approached Ziptrek and says there’s another event coming that could be a big opportunity for the company. The official couldn’t say precisely what it was, but Udow saw the writing on the wall.

“We knew that if there was an opportunity to do anything related to the Olympics, that the exposure we would get would be massive,” he says.

The idea was to set up a zipline starting at Vancouver’s Art Gallery, carrying people above Robson Street to the other side. A series of negotiations had to be undertaken with the City of Vancouver, the Province and the Law Courts. Udow heard “anecdotally” that judges weren’t crazy about a zipline carrying Olympic revelers through the air where they were working.

Once installed, even members of the court were won over. On the second day of operation in Vancouver, a lawyer came out in his barrister’s robes and took the ride over Robson Square.

Lineups for the zipline lasted anywhere between six to eight hours. Premier Gordon Campbell took a trip on a particularly memorable ride. The line had seven minutes on the Today Show with endorsements from Matt Lauer and Al Roker.

The Olympic opportunity provided Ziptrek with an unprecedented marketing opportunity. It has since set up a zipline at the 2010 Grey Cup in Edmonton. In Whistler it’s drawing visitors from all over the world.

“This winter we just had a family from Texas who says we usually go to Vail,” Udow says. “They decided to come here this year.”

Business was indeed down for Ziptrek during the Games and the months surrounding them. But the exposure his business has drawn since them has more than made up for it.

“Overall, I am net satisfied with the impacts the Olympics had on our business,” he says. “A few pains, but overall positive.”

Perhaps the biggest Olympic business story focused on real estate, and the impact that the Games would have on housing values in Whistler. For years before the Games began, there persisted a perception that property values would skyrocket due to market interest in the Host Cities.

Just over two weeks before the Games began, the New Westminster-based Lancdcor Data Corporation released a report titled “The Winning Bid, a Winning Buy,” whose central thesis was that “real estate sales and prices are bound to increase.”

The report stated that sales picked up after Whistler and Vancouver won the bid, and that after downturns in 2008 and early 2009, sales picked up once more as the Games “focused unprecedented local, national and international attention on Whistler.”

For Pat Kelly, owner of the Whistler Real Estate Company, the idea that property values would rise due to the arrival of a two-week event was just a myth. He claims to have seen no noticeable change in property sales leading up to the Games.

“There was a few reported sales of people who were looking for real estate prior to the Olympics because they thought it would be nice to have a place here,” he says. “A couple of people did buy, but there was no measurable increase in activity due to the Olympics themselves.”

But the myth persisted, despite Kelly constantly contradicting it in the local media and elsewhere. Reporters from outside media came to Whistler seeking the story that property owners were profiting off an Olympic-sized boost.

At one point Kelly stood outside a Whistler home with a TV reporter who turned off the camera when his comments didn’t gel with the story.

“I had arguments with people about it,” he says. “I would get reporters calling up and saying, how much has value gone up? They would argue with me about it and then they would go with the story anyways.”

Kelly does, however, believe there are real estate benefits for Whistler in the long run. The Olympics has brought new amenities including a Sliding Centre, one of two in Canada, as well as a major cross-country skiing facility in the Callaghan Valley.

“The long term implications are largely positive because of the many amenities and legacies,” Kelly says. “It just makes Whistler that much more attractive again. We’ll see some impact over time.

“Just because the Olympics were on doesn’t mean people are going to run to Whistler right away.”

Resort accommodation was also a key focus of Olympic-related business. Many local property owners hoped to profit off a Games-time boost by taking in corporate tenants such as Coca-Cola and NBC.

It didn’t quite work out that way for many of them, says Ben Thomas, a co-owner of VIP Mountain Holidays, a company that rents condos and hotel rooms to guests that come to Whistler.

“The big thing that we realized, quite early on in the game, was two things,” he says in an interview.

“The right type of business to go after would be people coming long-term, those were the media and the journalists, and the people that were actually working during the Games, because they would come a couple of weeks before the Games and stay right through.”

Olympic sponsors, he says, got their accommodation through the Vancouver Organizing Committee for the 2010 Olympic and Paralympic Winter Games (VANOC). That included major partners such as NBC.

Through their agreements with the International Olympic Committee, those companies got broadcast rights, Olympic tickets and accommodation that was coordinated by the organizing committee.

VANOC arranged that accommodation about three years before the Games. Offers were made to hotels and condo owners to house personnel who would be there throughout the Games. Offers were also made to restaurants and shops for Games-time deals.

Many, like 21 Steps, took up the call. It hosted French House in Whistler during the Games. So did Nicklaus North, which hosted German House.

Others didn’t take the offers and held out, hoping for a big payday. Six months before the Games, they called up Thomas hoping to take up the deal they were offered two and a half years ago. By then it was too late, and property owners who initially hoped to cash in had to rent out their suites for far less than they expected.

Thomas says the most successful property owners were the ones who committed to renting their places three years before the Games. They got the highest rates, which decreased steadily as the Games approached.

“The moral of the story is that those who went first got paid,” Thomas says. “Those that waited for the big payday did get booked, but at lower rates and for much shorter stays.

“As the Chamber predicted, Whistler was a ghost town leading up to the Games. It was busy during the Games, but they would have been better off taking the deals we offered three years before.”

The Olympic experience varied for Whistler businesses. By and large, those who got into the game early and didn’t hold out for more money were successful. So too were those who knew the two weeks of the Games wouldn’t be a boon, but that they could nevertheless offer long-term marketing potential.

We are now three years out from the next Winter Olympic Games, to be held in Sochi, Russia. That event will essentially require construction of an entire city on the Black Sea, purely for the benefit of a two-week event.

Whistler may yet be called upon for advice on how to make it a success, despite it being a much different Olympics. But what’s certain is that any Olympic Host City will do well if it isn’t slow to take advantage of the event.

Or too greedy.

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About jesseferreras

Sea to Sky-based journalist. Snowboarder, cyclist, cinephile, bon vivant.
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One Response to A blueprint for business success at the Olympics

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