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"I believe that to meet the challenges of our times, human beings will have to develop a greater sense of universal responsibility. It is the foundation for world peace."

Beijing Olympics a commercial comedown

July 31, 2008

By Hari Sud
Column: Abroad View
United Press International, Asia
July 29, 2008

Toronto, ON, Canada, -- The earthquake that hit China in May, the
spate of unrest in Tibet and the economic slowdown in the West are
all playing havoc with the commercial success of the upcoming Beijing
Olympics. The games will not suffer directly, as commercial
television rights, advertising and tickets were all sold months ago.
It is the flock of tourists from around the world that is missing.

Tourists stay in hotels, eat in restaurants, use local air and ground
transportation and buy huge amounts of Olympic-related giftware. Yet
current hotel bookings through the month of August are less than half
what was anticipated. That is not good news for the Chinese games planners.

China spent close to US$40 billion to make the Beijing Olympics an
event without parallel. In addition, it spent billions building city
and tourist infrastructure. If not many visitors come from the West
it will be a shock to the prestige of the Middle Kingdom.

Right from day one, when the games were awarded to Beijing, it was
Western tourists the Chinese were after. It is the tourists who come
with pockets bulging with dollars that make the games a commercial
success. Secondly, the Olympics were to be a chance for China to
showcase its achievements. If this opportunity is missed, another may
not come for half a century.

At the time of this writing, hotels are only 40 percent booked. They
should have been 100 percent booked two weeks before the Olympics
opening day of Aug. 8. Now there is no chance that more Western
tourists will decide to go to Beijing. Hence luxury hotels are most
likely to stay empty, or drop their prices and fill their rooms with locals.

Airlines, expecting a great rush from Western capitals, had added
additional capacity for this period. Now they are less than half
full. European airlines have been running promotional ads to attract
travelers, and some are canceling flights. The same is true in the
United States. Elsewhere, in Asia and Africa, only the bigwigs had
planned to attend. They will still be there ­ it is only the everyday
tourists that are missing.

China had planned for 1.5 million tourists from outside to attend the
games. Now this estimate has been scaled down to 450,000. In Beijing
alone, China built or refurbished 4,800 hotels or guesthouses to
accommodate the rush. Of these, 4,000 were to accommodate domestic
visitors; only 800 fall into the class of international hotels where
Western meals are served and English is spoken. Of these, the top 20
have been booked for months for foreign dignitaries. It is the
remaining 780 that are waiting in vain for customers.

The games will still go on. Great opening and closing ceremonies are
planned. The games facilities were completed ahead of schedule. Some
40,000 street hawkers have been banned from the city. Surrounding
factories have been closed for the last month to improve the quality
of the air. Security precautions are the strictest Beijing has ever seen.

Western media these days are plastered with China-specific
commercials, from Chinese provinces and cities advertising their
tourist facilities, scenic beauty and great cultural heritage. Still,
the visitors are not flocking in.

Security concerns have also led to tighter restrictions on visas.
Long-time Western residents of Beijing, who work in Beijing on
Chinese projects, including a few Canadians, have been denied the
right to stay during the Olympic Games.

Passengers on buses and subways are being routinely frisked. The main
aim is to deny entry to people whom Beijing considers undesirable.
Gatherings of people anywhere in the city, whether legal or illegal,
have been banned till October. The foreign press has been warned to
stay away from making contact with people or organizations not so
friendly to the Chinese.

So, who is coming to the games? Most visitors are likely to be Asian
-- Koreans, Japanese and Taiwanese ­ along with a few Westerners.

Choreographers have been hired to coordinate cheering during the
events, and when the TV cameras turn to the crowd, they are likely to
show mostly Chinese faces. One big error the Chinese made was that
they allocated only 25 percent of the total 7.1 million Olympic event
tickets to foreigners. This is too small a number compared to the
Athens Olympics or prior games. Athens allocated 50 percent of the
tickets to outsiders. Uncertainty about obtaining tickets and the
high cost of visiting China -- about US$12,000 per person -- is
prompting many would-be visitors to skip the games.

Why did this muddle happen in the first place? Everything was going
well for the Chinese until early this year. For two decades China has
had good press. Its economic progress is toasted in world capitals.
Hence, the Chinese expected to put on a well-run and well-attended event.

In fact, this was about to happen until the series of economic,
political and natural events that began to unfold this year. The long
relay of the Olympic torch from Greece to Beijing, with wayside stops
in Europe, the United States and Asia, became a run of controversy.
And things began to go wrong.

Tibetan protesters -- who have long been demanding the withdrawal of
Chinese occupation forces and the return of their spiritual leader
the Dalai Lama to Tibet ­ mounted civil protests in England, France,
the United States, India and a few other places. Earlier riots in
Lhasa, the Tibetan capital, were reported all over the world. People
in the West and elsewhere did not take kindly to the military
suppression of Buddhist monks.

The Chinese could not extinguish the bad publicity surrounding these
events. Even their tremendous lobbying influence was of no help. All
this had a telling impact on visitors who were thinking of going to
China for the Olympics.

A month later a major earthquake struck China's Sichuan province. The
authorities' response to the disaster was swift and timely, but
people in China and all over the world began to question the
country's rapid-fire building techniques.

Local people in Sichuan began mounting protests against so-called
"tofu" construction, as well as corrupt practices. Would-be visitors
took note. They were afraid of their safety in hotels and games
venues, in cities and in shopping districts, which look impressive
but may be built with similar tofu-type techniques. It is another
reason why visitors decided to stay away from the games.

Last -- and maybe the foremost reason for the low visitor count -- is
the economic recession in Western economies. When economic hardship
strikes, people cut back on expenses. First of all they postpone
holiday trips, expensive entertainment and trips abroad. With the
housing, financial and auto sectors in full recession, rising
inflation, and higher food and gasoline prices, people in the United
States and Europe are thinking more of survival than of the Olympic
Games. This is reducing the Western headcount in Beijing.

All of this is having a telling impact on the Beijing Olympics. China
had built up its capital city to showcase its achievements, and all
seemed to be going well. Then in rapid succession three bad-news
events struck, deflating the nation's expectations and its ego.
Instead of 1.5 million visitors, Beijing must be content with less than half.

Hopefully, everything will go well for the games from now. The
greatest-ever show in Asia, with a US$40 billion price tag, may still
go on smoothly.

(Hari Sud is a retired vice president of C-I-L Inc., a former
investment strategies analyst and international relations manager. A
graduate of Punjab University and the University of Missouri, he has
lived in Canada for the past 34 years. ©Copyright Hari Sud.)
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