Olympics project will boost island economies

By William Tucker

At Gov. Juan N. Babauta’s initiative on behalf of himself, Gov. Felix Camacho of Guam, and the presidents of the Northern Marianas College and the University of Guam, my firm last year conducted a feasibility study on the prospect of attracting Olympians to Guam and CNMI to conduct their acclimating training prior to the 2008 Beijing summer Olympic games.

Funded by a Department of the Interior technical assistance grant, the study determined that adequate facilities exist or could be constructed for use by Olympic athletes in most sports that will be contested at Beijing and that U.S. National Governing Bodies (NGBs) for these sports would be willing to consider venues in the Marianas for pre-Games training purposes. The study recommends that in addition to U.S. teams, Canada and the U.K. be primary marketing targets, followed by Caribbean and Latin American countries.

The targeted national Olympic Committees all have expressed interest in receiving more information as it becomes available and, indeed, U.S. swimming officials already have visited Guam as a result of my visit with them. I understand others with whom I have met or spoken are contemplating trips to the islands even in advance of an all-out effort to lure them there.

In a March 11 opinion column for this paper, Ed Stephens pointed out that no cost/benefit analysis has been conducted but that is for a later stage of this project. For now, we have recommended that marketing materials be developed quickly so that Guam and CNMI officials can promote the islands at the upcoming April meetings of the U.S. and Canadian national Olympic committees. Most of the training venue decision makers will be at these gatherings, thus simplifying the marketing process and holding down time and travel costs. At the same time, we have suggested that the governments and colleges develop a partnership with the private sector to advance this project and simplify the contact process for Olympic officials at the negotiating stage. It is anticipated that most American Olympic teams will make their decisions on acclimating training for the 2008 Olympics during 2005.

At the point that team officials visit the islands and state an interest in training there, they will present authorities a list of their requirements. With that information in hand, the governments then will be in a position to conduct a meaningful cost/benefit analysis. As in any market, if the seller and the buyer can reach agreement, a deal will be made. In many cases, little—if any—work will be required on the sports facilities and negotiations will simply be regarding lodging, food and miscellaneous.

In the absence of such specifics, however, we nevertheless can make some general calculations. The U.S. sent approximately 1,000 athletes, coaches, trainers, and other officials to Athens in 2004. These figures do not include parents, families, friends, fans and camp followers that swell the actual totals to a considerably larger number. Depending upon the sport, the acclimating training can be anywhere from one to four weeks. To be conservative, assume an average of 15 days’ stay and that CNMI and Guam would only attract 1,000 people from all the targeted countries, not just the U.S.

Assume they will spend approximately $100/day/person on lodging and $50/day/person on food. There will also be money spent on airlines, ground transportation, and miscellaneous items, all of which are omitted here for the purpose of this calculation. $150/day times 1,000 people is $150,000/day. $150,000/day times 15 days comes to $2,250,000. The revenue on this return alone would dwarf the expected outlay for marketing.

It would be a mistake, however, just to look at the few weeks Olympians would actually spend on Saipan to determine the benefit of this effort. Rather, the governors’ and college presidents’ larger goal is to put into place first-class facilities that would be available to future generations of students and the general public and to firmly brand the islands as a desirable destination for sports tourism.

The Olympics symbol is the most recognized symbol in the world, and the Olympic Games provide an opportunity for the best athletes in the world to compete against each other. It would be our objective to forever link Guam and the Northern Marianas in the public mind’s eye with the world’s best athletes. Moreover, the association of the Marianas with the Olympics is bound to be a magnet as venues for other high-level sports competitions both in the run-up to Beijing and thereafter.

Past experience makes it is easy to believe that every attempt to assist and diversify economic development is going to fail, but that is a very cynical view. Clearly, Babauta believes otherwise, and so does David Cohen, the senior Bush administration official who had to decide whether to put up the risk capital to launch this project. Secretary Cohen, with his background as an attorney practicing corporate law and with an MBA from the prestigious Wharton School under his belt, saw something there worth pursuing.

Quite frankly, Cohen and Babauta had more faith in this project at the outset than I did. I think the governor chose my firm to undertake this study because he knew that he would get a product that was not sugar-coated. As the immediate past co-chairman of the U.S. Olympic Committee’s International Relations Committee, I had a reasonable idea of what was involved in staging the Olympics Games every four years and what NGBs needs were.

To say the least, I was quite skeptical that Guam or the CNMI would be able to handle pre-Olympics training requirements but I confess that my prejudices were based on ignorance, as most prejudices are. Simply put, I had never been to the Marianas before. So, I was amazed that in cataloguing both the facilities and the accommodations, I found that all but a handful of the sports can be accommodated. I also found among the team officials I contacted that neither Guam nor CNMI was under consideration for very much the same reason: the islands were not on their radar screen.

Going into this project, we made a number of assumptions toward the viability of the conclusions:

* that with only a two-hour time difference between the Marianas and Beijing, most jet lag adjustments could be made here;

* that with American currency as the legal tender, costs could be better contained;

* that with English widely spoken, there would few language difficulties;

* that as part of the United States, the islands would offer athletes better security than anywhere else in the region, not an inconsequential consideration in the current international climate.

* that island temperatures and elevations would approximate those found in Beijing.

What I found in my conversations with Olympics officials was that all of those factors were appealing. Moreover, these officials told me that if facilities were acceptable the islands would have the additional advantage of offering a physical isolation that would be conducive to concentrating on the task at hand: training. Also, while island culture is different from prevailing American culture, it does have a familiarity about it that would be absent in any other Asian training venue.

We also learned that Continental Airlines has existing charter rights into Beijing from both Guam and Saipan, thus offering a convenient transportation for the four-hour flight. An added transportation attraction is that Continental recently was awarded route rights from Beijing to Newark, which will offer games participants and spectators from the densely populated American northeast a quick and convenient way back.

Of course, in addition to the cost of marketing this concept, money may have to be spent on upgrading facilities but much of what would need to be done is already being planned by the island governments anyway. The facilities will also be available to attract other regional sporting events, which will bring additional revenue into the local economy. Tourism, whether it is through sporting events or any other form, is considered a desirable source of revenue in almost any country and certainly is a well accepted source of revenue in the Marianas.

The LeoPalace facilities on Guam are proof of the old movie adage: “If you build it they will come” and little improvement will be needed there to attract some of the wealthier teams. At the same time, U.S. teams such as the weight lifters and the wrestlers that have smaller budgets are seeking more spartan conditions as part of their training regime and will find CNMI’s facilities most attractive. The same is true for budget-conscious teams from Latin America and the Caribbean.

At the turn of the last century, one of America’s retail barons—someone like W.T. Grant or, F.W. Woolworth—lamenting the cost of newspaper advertising, remarked that “half of all advertising money is wasted, but nobody knows which half.” Likewise, some of these marketing efforts no doubt will be wasted and some of the expected long-range benefits will be less than anticipated. Nonetheless, we believe there will be other, intangible benefits to the Marianas to making a serious effort to attract Olympians to the islands:

1. The media from any country whose Olympians are training in the CNMI or Guam will focus their in-country and global attention on the training sites through print media, TV and radio, focusing attention on the islands as sports tourism destinations.

2. Association with the Olympics provides a powerful marketing and public relations tool to attract regional and international sporting events to CNMI and Guam.

3. Olympic coaches have indicated that they would conduct coaching clinics for local coaches. These are the elite coaches in their fields and it would be almost impossible for CNMI and Guam to attract these coaches to the region if they were not there for acclimating training. There is also a huge cost-savings to having these coaches in the area and conducting clinics for local coaches as their services could simply not be purchased for a reasonable fee if they were to come over simply for the purpose of coaching local coaches.

4. Local athletes will be exposed to the rigorous training that Olympians go through and will themselves be motivated to higher performance levels.

6. Upgraded sporting facilities will benefit student athletes and the general public following the departure of the Olympians.

7. Some NGBs such as USA Basketball, USA Soccer and USA baseball will be interested in scrimmaging and putting on exhibitions with other teams. This could be arranged with Japan and Korea in the area, and other teams that might be training in the region.

This project has made a believer out of me. I salute Babauta for his vision in conceiving it and his determination for seeing it through, despite the naysayers. As one who served on President Reagan’s staff in the White House counsel’s office and watched the Cold War come to an end through the President’s persistence despite his critics, I know that that is what leadership is all about.

We can either stand still and criticize the anticipated wasted half of this effort or move forward in the never ending effort to diversify these island economies for the betterment of all the people. For my part, I expect to be on Guam and the CNMI in the summer of 2008 to greet the first Olympians when they arrive.

(William Tucker in the chairman of Tucker & Associates, a Washington, D.C. area based international consulting firm with clients throughout the Far East. A lawyer by training, he has served as assistant attorney general of Colorado and was a member of the White House Counsel’s Office during the Reagan Administration. He is immediate past co-chairman of the U.S. Olympic Committee’s International Relations Committee.)