|A comparison of venue development of the 2018 Olympic Winter Games Candidate Cities - Paul Freudensprung|
|Bidding and Venue Development|
Only a few days to go until the IOC members will select the host city of the 2018 Olympic Winter Games at the IOC Session in Durban, South Africa. While this race for hosting the Olympic Games probably lacks the excitement of the last two Olympic Summer Games bids where some of the major global metropolis competed for the chance to become a host city, still some interesting points can be highlighted with regards to venue development.
Also in this campaign an already well documented aspect can be observed: Two candidate cities from established winter sport regions in Alpine Europe, Munich and Annecy stand against PyeongChang, a city in Korea, where winter sport development has only started with its first Olympic bid for the 2010 Games. Again the IOC members have a choice to opt for well proven existing winter sport arenas and infrastructure, which host annual high-level events that draw major crowds. On the other hand, they can choose a new sports destination that allows opening new markets for winter sports. If we take the latest host city elections as a measure the IOC, but also FIFA, are leaning towards decisions to develop new markets for their events (2016 OG in Rio, 2018 OWG in Sochi).
But let’s have a closer look now on how this all really translates to venue development for the 2018 OWG Bid and compare the budget allocated by the three candidate cities:
Source: 2018 Candidate City bid Documents
In relation to the development aspect, it can be seen that the new winter sport destination PyeongChang has an almost equal number of existing venues and a lower number of new and temporary venues compared to both European candidate cities, Annecy and Munich. In fact, the bids of the traditional winter sport regions are not that different in terms of venue development from the new winter sports destination in Korea.
At first glance this fact may be surprising, but PyeongChang is bidding the third time for the Olympic Winter Games and has been building sport infrastructure all along the way. Nevertheless the Korean candidate city posts the highest venue development expenditures of all candidate cities, with the lowest number of competition and non-competition venues (twice the cost of Munich despite a similar number of venues not requiring works).
As Annecy would use the Games to extensively renovate and upgrade existing infrastructure and build the highest number of new permanent venues (12, compared to 7 Munich and 9 PyeongChang) its overall venue development expenditures are much higher than Munich’s and come close to PyeongChangs. Annecy is the only candidate without an existing venue not requiring any permanent works (Munich 7, PyeongChang 6). It shows, that also established destinations can have large infrastructure development potential, if the Games are used to modernize existing facilities. In relation to overall venue costs, only Munich is in line with the IOC’s paradigm to reduce the cost of the Games.
Munich and Annecy with 6 temporary venues each, follow an approach where venues without a permanent legacy for the region are built exclusively for the Games. For PyeongChange this translates into 1 temporary venue, which demonstrates the commitment of long term investment into winter sports development.
Source: 2018 Candidate City bid Documents
The IOC understandably prefers for the Organising Committee to spend its budget on the staging of the Games and not the permanent construction of venues. The construction of venues should be the responsibility of private or public investors, as this infrastructure has a legacy for the host city that goes well beyond the Olympic Games. Under this light, not surprisingly all three candidates report no capital investment for venues by the Organising Committee.
Both European candidate cities, Munich and Annecy report very similar costs for venue rent, temporary overlay and running costs for the Olympic Games. PyeongChang indicates venue rental and overlay costs an approx. 30% lower than the European candidate cities. On the other hand the running costs are 5 times higher. The reason for this difference could only be analyzed, if more detailed information was available. As all 3 candidate cities state that public venue owners will provide the venues free of charge (and in all cases most venues are owned by the public hand) the difference could have its reason in a different interpretation of the cost categories.
In general OCOG expenditures are approx U$ 370-400 million in venues, with less than 10% of the total budget dedicated to sport venues. The Main Media Center, Olympic Villages and other venues of all 3 candidate cities cost approximately twice as much as its sport venues. This is an indicator of the complexity and impact of an Olympic Games beyond sport.
In short, it can be said that the 3 bids are very similar in terms of the financials for venue development. If any, the only major differentiating factor is Munich expending about half of the amount of the other two bids on venue development. And it shows that a bid in an established sports region still can require as much investment as in a new destination.
Paul Freudensprung : He has over 15 years of experience in the sport industry and specialises in directing and advising multi-stakeholder working groups at major events where different objectives and interests need to be aligned in order to develop effective event operations and functional venue infrastructure.
Paul has been involved in operations of 4 Olympic Games, 2 FIFA World Cups, and was the Games Plan Director of the 2014 Salzburg Olympic Winter Games Bid. In 2006 Paul set up his own consultancy company offering strategic solutions related to the development of integrated event operations programs, appraising contractual issues around venue agreements and supplier contracts and defining infrastructure development concepts and operational venue designs. He also teaches courses on event management for the MBA program at the European University in Barcelona.
Before joining the event management industry Paul spent 3 years conducting environmental and economic impact assessment of European transport infrastructure projects. Paul holds a Masters degree from the Faculty of Economics of the University of Sydney and a Masters degree from the Institute of Geography of the University of Vienna.