• Summary
• Downloads
• Explanatory Notes
• Related Information
• Past Releases

Feature Article - The Sydney Olympic Games


This article was published in the September quarter 1999 issue of Balance of Payments and International Investment Position (ABS Cat NO. 5302.0, p17-20)

Introduction

1 The awarding of the 2000 Olympic Games to Sydney has already had a significant economic impact on Australia and will continue to do for several years to come. Some of the impacts are direct, such as the construction of venues and other facilities prior to the Games, the sale of television broadcast rights during the Games, and the movement of athletes and tourists to participate in or watch the Games. Other impacts are indirect, such as the international tourism that is generated for Australia from the promotional aspects associated with the media coverage that Sydney and Australia receive through hosting the 2000 Games.

2 The treatment of the economic activity associated with the Sydney Olympic Games is consistent across all of the macro-economic statistics published by the Australian Bureau of Statistics. This article explains the major impacts on the balance of payments (BOP) and international investment position (IIP) statistics. The information used in this article to illustrate the BOP impacts has been drawn from: the annual reports published by the Sydney Organising Committee for the Olympic Games (SOCOG); and from the November 1998 issue of Forecast, the eighth report of the Tourism Forecasting Council, in which Chapter 4 was titled Tourism Impacts of the "Athletes' Games". There are a number of other reports, with varying estimates, also in the public arena. In the September quarter 1999 issue of Australian National Accounts, National Income, Expenditure and Product (Cat no. 5206.0), to be published on 15 December 1999, there will be an article which explains the treatment of the Olympic Games in the wider accounts for the whole economy. The statistical treatment of the Paralympic Games, to be held following the Olympic Games, is the same.


Tourism

3 The Games will result in thousands of additional visitors to Australia - athletes, officials, sponsors and spectators. In addition, many more people will visit Australia before and after the Games because hosting the Games provides significantly increased coverage in the international media for Australia as a tourist destination. On the other hand there will be some decrease in the usual tourist and business traveller numbers at that time because of problems in obtaining air tickets and accommodation, and because of impacts on business activity in Sydney and elsewhere in Australia during the Games. There may also be some redirection of tourist arrivals to other areas in Australia, and more Australians may travel abroad during the Games.

4 The November 1998 issue of Forecast identified the direct, games-related number of international visitors at about 130,000 (mostly at the time of the Games). These visitors will acquire accommodation and other personal goods and services such as food, domestic transportation, and shopping while in Australia. The spectators will also attend the Games and pay for tickets to the various events.

5 The Forecast article also estimated that an extra 1.5 million tourists would visit Australia between 1998 and 2004 as a result of the promotional impact of the Games. These visitor numbers were forecast in that article to peak at about 353,000 in calendar year 2002.

6 In Australia's BOP, all personal goods and services acquired in Australia by travellers during visits of less than one year are recorded as travel credits. The travel expenditure in Australia by international visitors is estimated primarily from statistics on the number of visitors, as estimated in ABS overseas arrivals and departures (OAD) statistics, together with estimates of the average expenditure of these visitors, derived from the International Visitor Survey (IVS) conducted on behalf of the Bureau of Tourism Research. Forecasts of the monetary impact of the Games visitors vary depending on assumptions about the characteristics of a Games visitor. However, Games spectators will likely spend more per day than the average holiday visitor. Europe and North America are likely to be more heavily represented in Games spectator numbers than usual in total visitor numbers, and visitors from these sources stay longer than the average visitor, and spend more. Accommodation and other costs for these visitors in and around Sydney will be higher at the time of the Games, and expenditure on tickets will push the average Games tourist expenditure well above the average holiday visitor expenditure.

7 The promotional impact of the Games is spread across a number of years and will be reflected in the ongoing measurement of visitor numbers and average expenditures in the usual data sources. No separate BOP measurement will be needed. Most of the direct Games-related travel credits will be more concentrated, and will be recorded, in International Trade in Goods and Services, Australia (Cat no. 5368.0), in the reference months of September and October 2000, and in the BOP in the September and December quarters 2000. OAD statistics will capture the visitor numbers in time for BOP estimation. However, until IVS results are available, ABS estimates of the Games impact on average tourist expenditures will be included in published estimates. While this Games impact will be estimated at the time of the Games once source country and average stay data are available from OADs for all visitors, additional expenditures of about $600 million might be expected, with 80 per cent of this amount recorded in September 2000. This includes expenditure on Games tickets, regardless of when the tickets are paid for. See paragraph 15 below for the BOP and IIP treatment of revenue from ticket sales prior to the Games.

8 In addition to the travel expenditure within Australia by the direct and indirect Games-related visitors, these visitors may travel to or from Australia on Australian-operated aircraft. The Games-related earnings of these resident airlines will be included within the passenger services component of transportation in the BOP.


Other games-related Balance of Payments activity

9 There are a range of cross-border goods, services and financial investment transactions associated with the Games. To explain the BOP and IIP treatments of these it is useful to start with SOCOG's published income and expenditure information. The following table is an extract from the 1998 revised Games budget that is presented on page 59 of SOCOG's 1998 Annual Report. (At the time of writing the 1999 Annual Report was not available.)

F2:1 EXTRACT FROM SOCOG'S GAMES BUDGET
	From Inception to	Revised games
	30 June 1998	budget
Income	$000	$000
Television rights	212,657	1 032 000
Sponsorship	183 394	873 700
Consumer products	7 813	65 200
Ticketing	73 094	600 900
Other revenue	nil	25 000
Total income	476 958	2 597 000

• SOCOG has committed to pay the various National Olympic Committees, prior to the Games, a cash amount equivalent to the cost of return airfares to Sydney for all competitors, team officials and other team personnel up to a maximum 15,000 travellers. Any such payments to non-residents, which will be in the tens of millions of dollars, are recorded in the BOP as current transfers debits;

• goods have been imported to support the conduct of the Games, such as fleet transport, timing equipment and other facilities. These are recorded in the

BOP indistinguishably with all other merchandise goods imports;

• sporting equipment brought in by visiting teams will be classified as temporary imports, and excluded from the BOP. It will be assumed to be either subsequently taken out again (recorded as a re-export after temporary importation), or if left in Australia, that it has no commercial value (swapped with other athletes or given away);

• all other types of international cross-border goods and services acquired or supplied by SOCOG and other entities in regard to the Sydney Games will be incorporated indistinguishably in the relevant goods or services commodity groups as appropriate.