Post-2014 Winter Olympic Games Sochi: Empty hotels and stadiums or a thriving resort?

News that London hotels are still feeling the negative impact of the 2012 Summer Olympic Games is not the kind of information Sochi, Russia, wants to hear.

Post-2014 Winter Olympic Games Sochi: Empty hotels and stadiums or a thriving resort?

News that London hotels are still feeling the negative impact of the 2012 Summer Olympic Games is not the kind of information Sochi, Russia, wants to hear. Just a little under 100 days from now, the city is set to host the Winter Olympic and Paralympic Games.

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It is no wonder then why Sochi played host to over 360 hotel industry experts to discuss the future of the Krasnodar region and tourism in Russia as a whole. The event was called the Russia & CIS Hotel Investment Conference (RHIC) and it took place on October 22-23.

The conundrum for Sochi is clear: What to do with the new rooms being built specifically for the Games? Sochi currently welcomes over 4 million tourists annually. Will this figure be enough to fill the 25,000-plus new rooms? The challenge for the conference was how to turn post-2014 Winter Olympic Games Sochi from becoming a dreadful city with empty hotels, stadiums, and arenas to a thriving resort that will attract international visitors, is something that many former Olympic Games and other mega-sporting events host cities in recent years have failed at.

The Reality
Sochi and the region have a clear understanding of the critical enablers to effective, sustainable growth of tourism, and has put in place the infrastructure essential for growth including a new power station, transport systems, and ITC infrastructure, however, the percentage of international visitors is very low, due to the difficulties in obtaining Russian visas and the lack of international flights into Sochi.

The Plan
The regional governments have activated specific programs to incentivize hotel investors and resort developers to take advantage of the city and region, especially noting the upcoming Winter Olympics, F1, and FIFA World Cup mega-events. The Deputy Mayor of the City of Sochi, Oleg Yasyuk, said these programs are designed “to provide not just incentives, but to guide investment to ensure that the city, region, and investor realize their objectives.” In addition to these “mega-event programs and timelines,” Yasyuk also told conference attendees that focus is being put on post-Games marketing to ensure that the development in the city and region is able to attract ongoing visitors and investors.

Conference Outcome
During the session on “Life After Mega Events,” Oleg Zabara, Deputy General Director for the organization of Formula 1 Russian Grand Prix, OJSC “Center Omega,” said: “RHIC 2013 provides excellent opportunities for gaining insight into how to make a mega event a catalyst for the development of the tourist industry of the country. Formula 1 is an event of just such large scale which will give an additional impetus to the post-Olympic development of Sochi, as thousands of Russian and foreign visitors will be coming to the city for the races.

“People need thrills, and it’s our goal as the promoters of the Grand Prix of Russia to make the races unforgettable so that the guests would want to return time after time. I have no doubt that we’ll be able to inspire the visitors to Sochi to come here again.”

For the session on “Air Transport,” Alexander Zapopozhsky, Strategy & Investments Director at “Airports of Regions,” and Anita Mendiratta, Founder and Managing Director at Cachet Consulting, were tapped to lead the discussion.

Organizers said the session went into in-depth discussion around the role of aviation in Russia, and the opportunity of the upcoming mega-events to raise Russia to the level of performance it can easily achieve on the global tourism and aviation stage. “Zapopozhsky expressed that the opportunity for airlines within Russia, and into, is huge, however, to unlock the opportunity, various issues need to be addressed: airport infrastructure, open skies, visas, airport technology, and budget operators.”

The air transport session also concluded that these upcoming mega-events offer the opportunity for “stress-testing” aviation systems in Sochi and across the country, using the event to identify where and how the Russian airport system and infrastructure needs to improve to maximize travel growth.

RHIC organizers also noted Zapopozhsky’s view that with airport development, and accompanying airport hotels, the impact on trade, export, conference & business travel development, and social advancement should not be forgotten. Zapopozhsky was quoted as saying: “Ultimately, without airlines and airports, hotel investment is blocked, as travelers are unable to get to the destination. As investors look to hotels and resorts, pressure on airport and airline development should also be factored in.”

With Russia attracting over 25 million international tourists per year, the ability to maximize growth potential has become a national priority. In addition to Sochi Deputy Mayor Yasyuk, the Vice Governor of the Krasnador Region Administration, Nikolay Buturlakin, also graced the conference during the opening ceremony.

The hotel conference in Sochi was undoubtedly successful. But for post-2014 Winter Olympic Games Sochi, the question remains: As a mega-sporting event host city, will it join the losers circle or the winners circle? Or, as RHIC organizers have put it, “Will it all end in tears?”

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