The world is watching as the 2014 Winter Olympics begin in Sochi this weekend. I asked my colleague, Chet Bowling from the Alinga Consulting Group in Moscow, his thoughts on the effect of the Olympics in Russia. Here’s what Chet had to say:
“The hosting of the Olympics in Sochi, which just a few years ago would have been unable to host a championship of this magnitude, demonstrates that Russia can resolve any challenge and can achieve even the most ambitious of goals,” said Russian President Vladimir Putin at the opening of the 126th session of the International Olympic Committee.
The feel-good effect of holding such a world-class event will have a positive impact on the Russian economy. However, this may be limited to the areas surrounding the event itself, where the result of the investments in the state-of-the-art stadiums, railway station and other infrastructure works are evident. The good feelings may not spread countrywide, though. This may be due to two factors: 1) the sheer size of the Russian Federation — people in the Far East who are 5-6 time zones away from the games may view this as a Moscow showpiece that has nothing to do with them; and 2) the general apathy of the people toward the government — the games may be viewed as something that the government and the oligarchs did for their own benefit. That said, during the games, there will be a big boost for the food and beverage sector in Moscow – it is impossible to get a table in any decent bar that will televise the opening ceremony live.
The other potential benefit of the Sochi Olympics is for the internal tourism sector. Sochi – with its lovely beaches in the summer and snowy slopes in the winter — was always seen as a resort area even in the Soviet times, where a lot of the Politburo members would spend their vacation. Now that the infrastructure is in place, and with the right marketing, Sochi could become the “Miami” of Russia in the summer and equivalent of a French Alps ski resort in the winter. This will be attractive to the more affluent Russians who have traveled the world already and are looking to spend vacations at home.
Schneider Downs and Alinga have enjoyed a great working relationship for several years through PrimeGlobal, including Chet’s visit to Pittsburgh in 2012 to present at our “Doing Business in Russia” seminar.
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