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February 25, 2014

Eastern Europe: Sochi After the Games

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Prior to the Olympics, the whole region around the Black Sea invested millions in the most expensive infrastructure projects in the history of the Olympic games. All together, they may cost as much as $51 billion.
Russian organizers are predicting that after the Games, Sochi will become one of the most important Russian meetings industry centres. To this end, the organizers  opened the Sochi Convention Bureau. Until mid-2013 Sochi opened of some 31,000 hotel rooms, of which only about 1,700 were adapted to modern standards. Up through the opening of the Olympics, 25,000 new hotel rooms were built and 17 new hotels, of which almost all have new congress centres. As of the middle of the  Olympics, Sochi has 55,600 hotel rooms.

Together with the Olympic Games in Sochi also arrived international hotel chains. The majority of investments are concentrated in two main Olympic clusters – coastal and mountain, which are 45 kilometres apart. The coastal cluster has gained approximately 8.000 new hotel rooms within the Olympic Park, on the coast between the Sochi centre and the Olympic Park there are 5.300 new rooms and in the city centre there are 1,200. Krasnaya Polyana mountain cluster is richer for 1.600 new hotel rooms.

The core of the new meetings industry of the region should be concentrated in the Olympic Park in Adler, which is from the renovated airport just a stone’s throw away. The most seriously, the meetings industry was embarked by the hotel chain Radisson, which in the middle of the Olympic village built the largest multifunctional congress centre Radisson Blu Resort & Congress Centre Sochiwith a hall that can accommodate up to 1.300 participants. Coastal cluster with the centre of Sochi has at the moment more than 70 convention halls of all sizes, which are built in accordance with international standards. In the Mountain Cluster there are over 40 new congress halls (see table below). Sochi from relative underdevelopment overnight turned into a destination that has very diverse convention facilities suitable for all kinds of events and incentives. This raises the question whether or not the volume of the supply due to the Olympic Games is oversized and weather in the future it will enable sustainable management. Review of hotel investments indicates a caution of hotel investors who did not invest in too large convention centres. It seems as though they are waiting to see what will bring to Sochi the post-Olympic future.
The memories will not be enough to live on, and so the organisers are already active in the field of mega sporting and political events. Formula One for the Russian grand prix will take place between 10th and 12th October 2014. The track leads directly between the Olympic facilities. On the central Olympic Stadium the Fisht, which can take 40.000 spectators will take place the world football championship 2018. In addition, Sochi in July this year is going to host a session of the G8 group.
It seems that the future of Sochi will be oriented towards mega events, a more structured strategy for ordinary meetings at the moment does not exist yet. Huge sports complexes will require large public funds, if they will want to properly maintain them and even greater funds to fill them with congresses and the desired mega events. Public call for ideas on how to use Olympic facilities after the completion of the games was published by the President of the Russian government Medvedev at the beginning of February.
Looking at past hosts the Winter Olympics, it seems that its meetings industry opportunity best took Vancouver. In 2012, it was on the ICCA scale at the 43rd place with 49 congresses per year. Other cities of the Winter Olympic Games are more in the background, “our” Sarajevo is now slowly waking up. It seems that they have not taken best advantage of their opportunities. When it comes to organizers of the Summer Olympics they are better. London as a key strategy put the development of congress tourism. In the first place as a direct result of games they are emphasizing a positive public image.
Sochi is now torn between thinking about mega events and more sustainable approach to the development of the meetings industry. What will be the future is most dependent on the good organization of the local meetings industry immediately after the end of games. The key will also be an established well-functioning Convention Bureau. Surely it is precisely the meetings that could be a part of the solution to improve the ROI of the event, which according to huge investments will be very difficult to get out of the red numbers.

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About the Author: Kongres





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