Hospitality management faculty weigh in on tourism at the Tokyo Olympics
Cities apply to host the Olympics in hopes of driving international exposure and boosting revenue, but according to a study by the Council of Foreign Relations, it’s unclear if host cities end up benefitting economically given the amount spent on necessary infrastructure. In spite of this, Tokyo won the bid for the 2020 Olympic Games hoping to procure billions of dollars in tourism revenue. But the COVID-19 pandemic botched these plans, and the Games are proceeding without spectators. The Daniels Newsroom asked faculty at the Fritz Knoebel School of Hospitality Management to weigh in on the impact of this change.
Q: Without spectators allowed at the Games, what will the impact be on tourism and revenue for Tokyo?
A: David Corsun, associate professor of hospitality management
With official spending estimates above $15 billion and unofficial estimates at approximately $25 billion, Japan will be in a world of hurt with zero international Olympic tourism. While about 75% of International Olympic Committee revenue is from broadcast rights and ticket sales, the economic impact of Games-related tourism is what drives host revenue. While the Olympics normally produce post-Games tourism, one must wonder whether Tokyo 2020 will do so.
Q: Does anyone in the hospitality industry benefit from the decision to eliminate spectators??
A: Karen Xie, associate professor of hospitality management
The pandemic has forever put the event industry in a virtual mode, including high-profile events such as Olympics. Just like you can enjoy a movie online at home (thanks to content streaming services such as Disney+, Amazon Studio, Netflix, etc.) without making a trip to a theater, you can now comfortably watch the Olympics online despite not being able to attend.
With spectatorship looking different this year, audiences are searching for new ways to support Olympic and Paralympic athletes during Tokyo 2020. Airbnb fits into this need quickly by launching an Olympian and Paralympian experiences platform called “Tokyo together curated programme.” Through this online experience program, guests of Airbnb will be able to virtually meet athletes, celebrate and support athletes, and feel as close to the action as possible. As a worldwide partner of the Olympic and Paralympic Games, Airbnb is offering sporting fans 200 ways to experience the Games through a range of online and in-person experiences. “
A: Cheri Young, associate professor of hospitality management
While there won’t be a massive influx of people in Tokyo, there are still estimated to be 53,000 officials, staff and members of the press attending. These people, along with some athletes such as the U.S. gymnastics team, will be staying at nearby lodging facilities. Those facilities closest to the Olympic Village are likely to be the ones that benefit from the Olympics. Given the reduced demand for lodging, those facilities farther away that would have benefited from the hundreds of thousands of spectators will likely be empty.
Restaurants and services close to the Olympic Village will also benefit, but given restrictions put in place due to the state of emergency declared in Tokyo, restaurants have been requested to close by 8 p.m. and not serve any alcohol. Local residents of Tokyo are being asked to watch the Games from their home televisions, rather than gathering at local bars and restaurants to watch the Games. Thus, overall, the newly built hotels and restaurants and the existing ones that added capacity in preparation for the Olympic Games will suffer due to low demand during the Games.
Q: While the 2020 Summer Olympics will be different from any other, it’s still a massive media event. Does this benefit these cities with tourism in the future?
A: Cheri Young, associate professor of hospitality management
Televising the Olympics amounts to essentially a giant commercial for the country hosting them. Despite foreign and domestic spectators being banned from attending the 2020 Tokyo Olympics, the world will still be able to watch the games on television and through social media. During a time when many have been subject to quarantines and lockdowns and life that is anything but normal, watching the Olympics and rooting for the athletes from one’s country may just be what many people need to brighten their days and help them, at least temporarily, forget about the pandemic and give them something to believe in.
Additionally, a country is a like a travel brand, just like Marriott is a lodging brand. The world will be watching how Tokyo handles the Olympics, and those who have never traveled to Japan will become aware of the country as a potential destination in the future and will develop attitudes about the country based on what they see during the Olympics coverage. While banning spectators will negatively impact the expected increase in tourism revenues associated with hosting the games, there remains the “advertising effect” of showcasing the country through its hosting of the games. Certainly, hosting the 2008 Summer Olympics in Beijing was a big boon for China as it demonstrated to the world what its people and culture were like and for many people, it was their first inside glimpse of the country.
For Japan, hosting the Olympics is a big gamble since all eyes will be watching how it handles the COVID-19 pandemic. If things go poorly and the Olympics ends up being a super-spreader event and the excitement and hope associated with watching one’s country compete in athletic events is lost, then hosting will cost the country dearly. This cost involves not simply the cost of physical infrastructure, which is substantial, but also includes the cost of having failed and the perception of the country in the eyes of potential tourists. On the other hand, executing the Olympics well despite surging cases of COVID-19 could showcase the efficiency, effectiveness and perseverance of the country to handle adversity and could become a source of pride for the Japanese. Tourists may be attracted to visit the country that pulled off such a feat and gave people around the world, through the televising of the Olympic Games, a little respite from the fatigue and hardship of fighting this pandemic as they cheer on their country’s athletes.