The Olympic Bounce
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After weathering a string of controversies and a major scandal, contributing $150 million from state coffers (to an overall bill of $1.9 billion) and devoting years of intense effort to put together February’s Winter Olympics in Salt Lake City, will it all be worthwhile for Utah? The short answer is, yes-probably.
There is little doubt that Utah will reap rewards for hosting the Games, and that its ski industry in particular will benefit. The question is, how much? The Winter Olympics are likely to propel Salt Lake City beyond its incarnation as a regional skiing center, transforming it into one of the nation’s premier winter sports capitals.
Utah skiing is well-known enough, but it has never achieved the kind of recognition-and panache-that Colorado skiing has. With 3 million annual skier days, Utah hosts about one-quarter the business that Colorado enjoys.
But stay tuned. How familiar were Lillehammer or Nagano before they hosted the Winter Games? “It will be a 17-day international infomercial for Utah,” says Nathan Rafferty, director of communications for Ski Utah, a trade association. “Utah has great skiing and snow, but it hasn’t been a household name. The Olympics will change that.”
Deer Valley President Bob Wheaton says his resort already has received a boost. “We’ve seen some increased business because of the Olympics, domestic and especially international. People want to see the venues.”
Lane Beattie, head of Utah’s State Olympic Office, points to other recent sites that have prospered from hosting the Games. “They estimated in Atlanta that the Games profited the state of Georgia in excess of $5 billion in economic advantages. Australia predicts a $10 billion shot in the arm economically in the five years following the Games. We anticipate we should benefit in excess of $2 billion in the five years following our Games.”
The costs involved in staging an Olympics, however, are staggering. The price tag for the 2002 Salt Lake Games is nearly $2 billion. That’s roughly six times what it cost-after adjusting for inflation-to produce the 1980 Lake Placid Olympics, which was the last time the U.S. hosted the Winter Games. The U.S. Olympic Committee, however, maintains that it has found the right formula for avoiding the mountains of debt that have plagued other Olympic host cities. Montreal became the paradigm for Olympic financial debacles after it hosted the 1976 Summer Games, which left its taxpayers with monumental debt that still haunts the city 25 years later. The 1984 Los Angeles Summer Games, on the other hand, have become the model for organizing a profitable Olympics.
“Montreal’s finance plan burdened its citizenry with a tax structure that they’re going to be paying for decades,” says Mike Moran, spokesman for the U.S. Olympic Committee. “In Lake Placid and now Salt Lake, with sponsor involvement and a different economic climate, these cities won’t pass on their debt to the public. The 1984 Los Angeles Olympics turned a profit of about $230 million, and Atlanta was designed to be a zero budget, but actually produced a surplus of about $30 million.”
One thing is certain: The Winter Olympics are good for skiing. Bill Jensen, chief operating officer for Vail Mountain, looks at the Olympics “as a booster shot that is given every four years to skiing. It brings new people in and also reinforces skiers’ ongoing passion for the sport.”
Carolyn McCarthy, a graduate student and occasional skier from Boston, says watching the Games rekindles her love for skiing. “You get inspired from seeing people who dedicate their lives to training and are such awesome athletes. It makes me feel like I need to get out there more.” For Bob Trousdale, a skier from Thousand Oaks, Calif., the Olympics “give me ski-fever.”
Michael Berry, president of the National Ski Areas Association, adds that a Winter Olympics held in the United States has an even stronger pull for American skiers. “We give more value to the Olymppics that have taken place in this country-Squaw Valley in 1960 and Lake Placid in 1980-than to Olympics that happen offshore. It’s tangible. People get more excited because it’s a place they can see themselves going to someday.”
Berry says the time is right for the Salt Lake Games to give American skiing a major boost. “This is an ideal time to have an Olympics in the U.S. because we have demographic opportunities. We’re looking for early teens and single-digit kids who are drawn to sports they see on TV, and there are right now a huge number of kids under the age of 20. We look for the same kind of bounce that we saw in 1960 to happen again in 2002. If you look at the time when skiing grew in this country, it was really in the period between 1955 and 1975. We think a critical component of that was the first televised domestic Olympics in Squaw Valley.”
Skiers will also benefit from capital improvements at some of Utah’s most prominent ski areas. Deer Valley, host of the slalom, mogul and aerial events, spent $9 million last year alone, adding a day lodge and a quad. Park City Mountain Resort, where the giant slalom and snowboarding events will be held, spent more than $15 million. Michelle Palmer, resort spokeswoman, says that the dollars expended “would have been spent regardless, but it was spent in a four-year window versus a 15-year window.”
New facilities will be among the Games’ lasting legacies, including the ski jump, bobsled and luge runs at the $64 million Utah Olympic Park at Park City and the $30 million speed-skating oval in Kearns. The venues will operate for the public as well as host competitions and athletes, making the region a winter-sports hub. Among other lasting benefits are a $1.59 billion upgrade of Salt Lake City’s major artery, Interstate 15, which was rushed through in time for the Games, as well as a controversial $15 million federally funded road to Snowbasin.
Snowbasin, which has been at the center of an Olympic-related land-swap controversy, is the resort that stands to benefit the most from the Games. “Many people haven’t heard of Snowbasin,” Rafferty says of the ski area where the Olympics’ sexiest event, the downhill, will be held. “And now it’s going to become a big name.” Snowbasin remade itself for the Games, building a lodge and installing lifts, including two gondolas and a tram, among other upgrades.
Maybe the best indication of how Salt Lake City could be transformed comes from looking at Lake Placid’s rejuvenation after the 1980 Games. Before the Games, Lake Placid was better known as a summer resort. But since then it has reestablished itself as a winter-sports center, hosting major international competitions. The cachet of the Olympic name will stay with Salt Lake City for years to come, as it has at Lake Placid.
Whiteface Mountain, the venue for Lake Placid’s alpine skiing events, didn’t fare as well. Skier numbers climbed for several years after the Games until rival resorts began installing high-speed lifts and other improvements. Whiteface failed to evolve, and its Olympic bounce faded by the late Eighties.
The lesson seems to be that the push Utah resorts are expecting should last for a few years, but then they will have to keep pace with the industry. And the Olympic bounce for U.S. skiing? A few gold medals would certainly give that a boost.