Where Did The Now-Banned Olympics Tourists (And Their Money) Go?
Today, I wanted to write about the upcoming Olympics — not about the Olympians and the Games themselves, but about what will be missing from the games: spectators, aka tourists, and all the money the Games would have brought in.
The Tokyo 2020 Olympics were supposed to be last summer. Much like the recently completed Euro 2020 soccer/football tournament, the name was kept to avoid confusion and probably for a zillion Copywrite and legal reasons. The games were postponed because of everyone’s favourite word: COVID. They were postponed a year and now begin on Friday, July 23rd.
There has been much progress in the fight against COVID this last year, and while many countries are enjoying being close to fully “open” again, Tokyo, and Japan as a whole, have barred spectators because of a rise in COVID cases. First, Japan barred international spectators from coming to the games back in March, much to the dismay of the many thousands of people who had tickets. Next, they banned people who live in Japan from attending the games, angering even more people. On June 23rd, Japan decided they will allow 10,000 people into stadiums to watch the games. While that is good news, it is still a far cry from full capacity.
According to The Guardian, more than 80% of Japanese people oppose hosting the games. That is a high disapproval number.
For perspective, Donald Trump’s highest disapproval number was 76%.
According to the Japan Times, 12.6 billion USD was invested in infrastructure for the games, which would have been mostly paid back with the massive influx of tourists and their spending cash. Now the Japanese government and its people are on the hook for a lot of that money.
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Sure, there is money from sponsors and endorsements. Still, the impact of 600,000 foreign visitors with cash to spend now either staying home or going elsewhere this July and August will have a detrimental impact on Japan for years to come.
Now that the Olympic Games have been promoted, sold, and basically cancelled to tourists and national spectators, where did all the tourists — and all their money — go when they were shut out of Tokyo?
Approximately 600,000 people bought tickets ranging in price from 60 USD to 2700 USD through authorized ticket resellers for the Tokyo Olympics. Distributors like CoSport, the official American ticket distributor, take a 25% non-refundable cut to cover costs. Customers will receive back the face value of the tickets but will lose out on the processing fees for credit cards and conversion fees. That hurts the customers.
Ticket refunds should be processed in the third quarter of the year (July 1 to September 30).
However, an executive at CoSport says they don’t make a bunch of money from ticket sales. They make most of their profit on high-end packages that include hotels, flights, and hospitality events. Those must all be refunded now too. That hurts the businesses.
While most of the ticket money will be refunded, credit card companies are saying they will not refund processing fees. Olympic Organizers say there is nothing they can do about fees they neither processed nor received. For most people, they will be out some money, but not all of it.
What About The Hotels?
In preparation for the games, approximately 46,000 hotel rooms per day were reserved just for the organizers. Thousands more rooms were reserved for spectators. Refund policy would be up to each hotel chain, but many were booked with non-refundable conditions. Others, such as American booking company ATR, offer 75% refunds or an option for 100% transferred to credit.
Many hotels were built specifically for the influx of tourists coming for the Olympics, seeing the beauty of Japan, and increasing their tourism industry as a whole for years to come. Now, many are bracing for bankruptcy if the government doesn’t bail them out.
The larger hotel chains in the city will be hit hard without money from the games, but how long COVID, in general, lasts in Japan will determine the hotel industry's fate. Specifically, the smaller, independent or family-run places will initially be the hardest hit in the short term. However, f they can withstand the pandemic and get back to hosting “stay-cationers” and domestic travellers later in the summer or the fall, they should be fine.
Unfortunately, they have all lost out on a massive Olympic payday.
Depending on which website was used and which hotel chain, would-be visitors might not have received a refund. If you were one of the lucky ones to get your money back, you are free to spend that money in a different country or wait a few more months (hopefully) and see the beauty of Japan.
And the Airlines?
The airline industry is just getting back on track right now after a devastating year and a half. With the help of government aid, many airlines could issue refunds, or at least travel vouchers, for most airline tickets booked during the pandemic, including travellers to Japan for the Olympics.
Many people, especially vaccinated travellers, will be wanting to get back on a plane as soon as possible, and the airlines will be more than happy to oblige.
In America, the airlines received $50 billion to stay afloat during COVID. In Canada, $9 billion. The airlines received more than enough money to save their jobs and stay in business during COVID and are now chomping at the bit to get back to surviving with their own money. With vaccination rates increasing and countries opening up to tourism again, the airline industry should be back to normal levels very soon.
However, with COVID cases increasing in Japan lately, not many people will be flying there anytime soon.
So Where Are People Going?
Pretty much anywhere else.
Since many people could get refunds or a travel voucher, they will have to spend their vacation somewhere. They will also have all the cash they didn’t spend in Tokyo to spend in a new destination.
Here is a list of places Americans can travel to right now.
Many countries are on this list, and most say that obtaining a negative COVID test and/or vaccination is necessary and quarantine is not or conditionally necessary. Japan is not on this list of places Americans can safely travel right now.
A majority of the countries on this list are beach destinations. Instead of watching Olympic athletes compete at their highest level, tourists can watch surfers compete for the biggest waves. These smaller countries will undoubtedly benefit from travellers who had Olympic dreams but are now looking to spend their Olympic money elsewhere.
Japan lost out on a lot of money that would have come from tourists for the Olympic Games. COVID came along at the worst possible time for Japan to host the Olympics, and not even postponing them for a year could make the situation work out for everyone.
There will be economic fallout from not having any fans at the Olympics. Every host city has had problems making their investment money back, but Japan will have it especially tough.
Some people have lost money on their Olympics purchases, no doubt. Major purchases like those are not without risk and should be considered carefully before buying. One good thing to come out of all this COVID madness is that we now know that a force majeure can happen, and we should prepare for it.
We are not quite out of the COVID nightmare yet. More and more people are getting vaccinated, and travel will start happening again soon. But as Tokyo can attest, we can’t rush these things. If countries aren’t ready to open yet, then the priority is the safety of their citizens, no matter how many billions of dollars in tourist money are needed for airlines, hotels, and stores.
Please stay safe and travel when it's safe to do so.
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