Unearthing the best organisational practices behind running mega-sporting events so their impacts for businesses and legacies for the community are improved, is a key interest for Dr Joan Carlini from the Department of Marketing, for Professor Andrew O’Neil, Dean Research from the Business School, and for Dr Amelia Green Sessional Academic from the Business School, who all experienced the Gold Coast Commonwealth Games in April 2018.
Mega-sporting events (MSEs) can have significant impacts and legacies on local communities, i.e. better roads, improved public facilities and transport (for example, the Gold Coast Light Rail), and a positive spike in tourism, but the hype and media attention they bring can also lead to overstated expectations around increased business demand, and have an inverse effect on local business when they are faced with boosted security, changed consumer behaviours of locals, and displaced leisure tourists making way for the event.
Twelve months out from Gold Coast Commonwealth Games (GC2018) the research team wanted to know more about the potential impacts facing the Gold Coast business community, so they looked into other MSEs and quickly realised that the effects on local businesses are relatively unreported. Dr Carlini, who specialises in corporate social responsibility and consumer behaviour teamed up with Professor Andrew O’Neil, a professor of political science, and they began interviewing a broad mix of stakeholders from private enterprise, Local/State Government and NGOs, along with experts in sports, events, legacy, urban planning, HRM, marketing and psychology.
They produced a report in July 2017 titled: ‘Gold Coast Business and the Commonwealth Games: Impact, Opportunity and Legacy.
The report’s aim was to inform Gold Coast businesses of the potential macro changes that the Games might bring in April 2018, to understand the implications and to ensure businesses were informed. A key finding of the report indicated there would inevitably be disruptions confronting businesses as a result of GC2018, but there was also scope for some sectors in the business community to leverage opportunities. Another key message was to plan with caution, as the evidence suggested that economic outcomes from ‘Boom Predictions’, do not always match expectations or materialise.
“We conducted the research a year before the Commonwealth Games to understand what the anticipated impacts may be? We looked into the literature firstly, Glasgow 2014, Sydney 2000 Olympics and Barcelona 1992 Olympics, to gain some lessons on what had happened,” said Dr Carlini.
“We selected those because there were similarities to the Gold Coast context. For example, the Sydney Olympics was held in Australia, and although the Games’ bid predicted a $7.3 billion boost, a later report stated that the benefits that were expected were not delivered, and in fact had a negative economic effect.”
“We also looked at the event literature and found important clues to understanding other potential impacts that could affect the Gold Coast, for example, ‘a change in tourist type’ from leisure tourists to sport tourists.”
“This research involved us talking to businesses, experts, and reviewing the literature. It is quite difficult to analyse previous mega-events, and make a prediction on what might happen in our local context,” said Dr Carlini.
“The result was interesting, in the end, what we said could happen resembled what actually happened. We were able to come up with a likely scenario.”
“MSEs are not like the typical annual sporting events, they appear in the host city once, and may never return. The distinction between normal sporting events in comparison to MSEs becomes more important for local businesses.”
Some previous host cities had a negative legacy effect, with infrastructure degrading to become expensive white elephants because of the high cost to maintain aging facilities. However, some cities were able to benefit from being a mega event host by attracting major sporting events and improved recreational facilities for the community. In the case of GC2018, careful venue planning for temporary construction was employed and short-term structures were built around existing assets, i.e. swimming pool and temporary stadium.
“It was really a surprise when we delved into event legacy literature, and found issues of surplus infrastructure, white elephants, and overpromising and under delivering. In this regard the Gold Coast was very clever how they utilised existing assets and built new assets,” said Dr Carlini.
One surprising impact was on the restaurant and café industry, where common expectations for an increase in trade during the event, was not realised. Hospitality businesses who prepared for what they expected to be their busiest time, were disappointed. But, there are also reports that certain industries may have prospered.
“The challenges that we found relate to expectations versus actual reality, and how predictions in the media affected the businesses planning and decision making and the flow on effects of this,” said Dr Carlini.
A respondent from the interviews outlined the reality for many hospitality businesses during MSEs, stated, “one of the lessons we’ve learned now is that people don’t come to major international sporting events and go and see sport all day, and then go and seek out cultural opportunities at night. They don’t even go to restaurants as we discovered.”
One key message for small to medium enterprise (SME) in future host cities, such as Birmingham, is to investigate the potential changing market dynamics that will occur. A good place to start is to look at what happened at past events, such as the Gold Coast, but they may find commercial information hard to get due to the sensitive nature on the material.
“This type of business commentary is not well documented. We spoke to the CEO of one of the local hotels, she mentioned calling their hotel chain in the city where the Commonwealth Games was held last, and to ask what happened? Unfortunately, that general manager had moved on and nothing was recorded. Even in industry, it’s hard to get useful information to assist planning,“ said Dr Carlini.
“Leading up to the bid, business stakeholders are a really important part of the process, with the assumption that is there is going to be enhanced business opportunities, but once the event draws near, other stakeholders needs become more critical.”
“The importance of this research lies in the fact that local business is often a forgotten stakeholder group of large sporting events. If event organisers had collaborated with business when they were designing parking restrictions, security and transport, the experience for business may be different.”
“Organisers need to have honest and authentic discussions about expected benefits and impacts for businesses, some industries may do well, and while others not so well,” said Dr Carlini.
Another participant stated, that they “expected to get really good customer patronage, because we were near the volleyball, we were along the cycling track, but in actual fact they had completely the opposite.”
“Yes if we go on observation, there was not a lot of locals on the Gold Coast during the event, and you hear reports of Sunshine Coast and Bali being full of Gold Coasters.”
Another key finding from the 2017 research is that MSEs will create business upswings for some sectors and industries, e.g. property, construction and labour hire in the lead up to events, and advertising and media companies during the event, but then downturns for others during the event, e.g. restaurants and cafes, and education and training providers.
“One positive report was in the boating industry, where a business had chosen to move their yearly event to coincide with the games. That was a decision they took so people could attend their event and go to the Games. It worked well for the business, saying that the combination sparked interest and novelty for their attendees,” said Dr Carlini.
A media and publishing business advised they had a 30% increase in advertising revenues resulting from the Games and increased readership. The building industry benefited with increased jobs in construction for the Games Village, and property development companies were able to utilise new local planning relaxations on building heights near tram stations.
One interviewee commented, “because of the Games, the Council has relaxed height limits allowing densification in certain areas to which makes it profitable to redevelop.”
A positive legacy was improved Gold Coast City branding and increased international awareness from media coverage, that is expected to bring an increase in tourists for years to come. And some tourism insiders believe that GC2018 will build a reputation for the Gold Coast as a city capable of hosting major events.
After GC2018, the Games Village will become a new master planned mixed-use community and home to new residents and businesses integrating with the 200 hectare Gold Coast Health and Knowledge Precinct, which includes the Gold Coast University Hospital, Griffith University, and the new private hospital.
“If you talk to people about the Commonwealth Games the stories are wonderful. And what we are doing is not taking away from a successful Commonwealth Games, we’re looking at how it affected businesses,” said Dr Carlini.
The Gold Coast received major infrastructure and public transport improvements for GC2018, with the new light rail that now connects Brisbane to Broadbeach via Helensvale, and improved park-n-ride facilities, and the global exposure is likely to continue to assist the tourism and accommodation sectors.
“We have come across some businesses that were forced to shut down, because their location was in a restricted area. In one example, businesses near the Nerang State forest where the mountain biking was taking place were not able to access their premises and they were forced to close,” said Dr Carlini.
“In another example, we interviewed the owner of an education and training business, because they were near the beach volleyball. They were advised to close for four weeks and reported a loss of income. To use their words, ‘we are now clawing-back’, when they discussed their current situation.”
In the second phase of the research, 38 interviews were conducted with Gold Coast businesses, industry associations and key leaders. The interviewees discussed their Commonwealth Games experiences and tactics they employed to navigate the changing environment during that time. Dr Amelia Green who specialises in City Branding, also assisted the current research which focuses on how businesses were impacted and the extent of the impact.
The effect of the Commonwealth Games on the general business environment is of interest to the community and will allow for better policy and planning at future events. The aim of this research will further inform businesses and government on what they could be facing when hosting MSEs. Another positive outcome is having the Griffith Business School working closely with key business community members and government, to generate MSE knowledge. This insight can then be used to create a better place to do business.
“We are still trying to understand what is happening post event. A lot of people say it’s business as usual, but a lot of businesses talk about getting back to pre-games revenue,” said Dr Carlini.
“Some businesses have mentioned that discretionary income has been spent and that the expected 3-month hangover, may be much longer than that.”
“I would say that engaging with local residents at a much deeper level, encouraging them to be part of the party, as opposed to stay off the roads, and stay away messaging, would have led to better outcomes.”
“Some of the lessons need to go to the MSE planners, engaging with business needs to be more of a partnership. And to be considerate of businesses as an important part of the host city,” said Dr Carlini.
To learn more about mega-sporting events and the impacts and legacies for business stakeholders and the community, please contact Dr Joan Carlini.
Griffith Business School research leaders Dr Joan Carlini from the Department of Marketing and Professor Andrew O’Neil, Dean Research, have launched their business impact research report – One Year On: A Business Impact Analysis of the 2018 Gold Coast Commonwealth Games – at the Sheraton Grand Mirage Resort, Gold Coast on June 18, 2019.