As we ring in the New Year for sports, one of the greatest events that is sure to make 2014 a special year is the upcoming Winter Olympics. Time is ticking before the opening ceremonies in Sochi, Russia, get underway. Even with all the concerns in the news, it’s safe to say, Russia will pull out all of the stops for the hundreds of thousands of spectators, athletes, media members and brands making the lengthy trek to the lavish resort city for the latest installment of the Winter Olympics. In less than a month, the proposal that won Sochi the 2014 Winter Olympic Games will finally unveil its many state-of-the-art facilities, stadiums, hotels, railways, restaurants and bars, making these Games the most expensive in Winter Olympics history.
Like the host country, sponsors have shelled out millions for association with the rings. The massive investment for brands involves brain-numbing logistics – licensing, merchandising, sales, advertising, marketing, public relations, hospitality and ticketing. The list goes on.
According to Reuters, the cost of being in The Olympic Partner program (TOP), officially associated with the International Olympic Committee (IOC), reaches more than $1 billion over the four-year period between Summer or Winter Games. And often times, brands that pay the hefty price tag to become worldwide partners or national sponsors are left blind to the location of future host cities.
In my experience, a primary asset for brands on which to realize a business return on their Olympics investment is hospitality – one of the only tangible aspects “on the ground” of an Olympic sponsorship. Sponsors host executives, clients, channel partners and internal audiences to strengthen and grow these vital relationships during arguably one of the biggest stages in sports, over the course of several “waves” or trip segments. Hospitality companies are crucial in the successful deployment of any hospitality program. There are only a few hospitality companies globally that have the expertise to help these brands successfully execute the massive exercise in “delivering a can’t-buy-experience” for VIPs.
This year, though, TOP and USOC partners were dealt the beautiful destination city of Sochi by the IOC – a city difficult from a business perspective and for brand activation. With travel constraints, government restrictions, expenses and security issues, many sponsors are scaling back their marketing and hospitality programs at the Games.
Embracing the difficulties presented in Sochi, Citi, the official bank of the U.S. Olympic and Paralympic team, is bringing its Sochi 2014 hospitality to New York City. According to Sports Business Journal, from Feb. 18-23, Citi will spend more than $1 million over six days for a hospitality space in the Tribeca neighborhood to host employees, clients and customers. They will be the only sponsor of the U.S. Olympic Committee (USOC) to host a domestic hospitality suite. The USOC will also host four hospitality events for sponsors around the Winter Olympics in the U.S., while also having a footprint in Sochi at Olympic Park.
The wise decision by Citi and the USOC will certainly be watched by potential sponsors looking for involvement in future Games, especially with Pyeongchang, a mountain region in South Korea being selected as the host city for the Winter Games in 2018.
Not all Olympic sponsors have forsaken the idea of having a hospitality presence on site. Proctor & Gamble, a Worldwide Olympic Partner is bringing back their P&G Family Home, which first made its debut at the London Summer Games in 2012. The P&G Family Home features numerous P&G brands, such as Tide, Crest, Gillette, Olay and CoverGirl, and will host families of Olympian athletes, in addition to other numerous guests.
Some sponsors, though, like Johnson & Johnson, chose the 2014 World Cup in Brazil – a more viable location – rather than renewing its deal with the IOC and risking the complications of an activation in Sochi. The former top-tier Olympic sponsor bought the final global sponsorship slot for the 2014 World Cup. And as soccer’s popularity continues to increase, especially in the U.S., it’s tough for the Winter Games to compete with the appeal of the World Cup.
Still, nothing replaces being there live at the Olympics, with the opportunity to cheer on your country as the athletes compete on the biggest international stage. For me, the Winter Games are great; they provide a more intimate experience than the Summer Games because the host cities are smaller and the scale is less. You have far fewer countries competing, and due to the size of the cities and the mountains, the event creates a more magical experience. For those attending the games next month, once you arrive in Sochi, I’m certain you’ll have an experience like no other – perhaps, even forming memorable and successful business relationships.