Give agents a sporting chance

Originally appeared in TravelWeekly Australia 22 August 2008
By Justin Wastnage

Sport now accounts for one quarter of some cities' tourism receipts. Justin Wastnage recently travelled to Hong Kong to find out what motivates cities to host large scale sporting events

Watching thoroughbred horses doing ballet was never likely to be thrilling. One spectator at the recent Olympic dressage events in Hong Kong's Sha-Tin racecourse remarked that after warming up, he had expected the horses and riders to get into it, but they never did.
Yet as Lucinda and Clayton Fredericks' scores started to mean something and it was obvious that Australia was leading the competition, the event got a whole lot more interesting. The arguably more-compelling show jumping and cross country that complete the Olympic sport of eventing got underway with Australia in pole position with scores of green and gold supporters cheering them on.
The Olympics are the biggest sporting event in the world in terms of television viewers and physical spectators. Only the FIFA World Cup comes close (and is arguably larger, depending on who does the measuring). The five ring circus is a golden chance for a country to reset its image. The Vancouver suburb of Richmond, for example, "went all out" to attract part of the 2010 Winter Olympics to its ice rink, says Ange Chew, Tourism Richmond marketing director.
For China, the Olympics were meant to massively boost its tourism industry. Yet visitor numbers to China are down on expectations, due in part to tighter visa restrictions, but mainly due to sky-high hotel rates and poorly distributed tickets.
For travel agents, sporting events have long been an irrelevancy, with package holidays sewn up in exclusive deals. The current Beijing games being no exception: the Australian Olympic Committee signed an agreement with New Jersey-based sports tours company Co Sport for Australian distribution rights. Co Sport established a sales office in Sydney, but offered no commission to travel agents.
Separately, many Australians were duped into an internet scam in efforts to obtain tickets.
Co Sport was unable to reply to questions, but is understood to have underperformed against its targets for Australian ticket sales. In an earlier statement, Co Sport said that the high demand sporting events included swimming, athletics and artistic gymnastics, which had a combined 6000 ticket requests made.
"We are proud to be able to provide this rarified access to the Olympic Games to the Australian public," Kevin Steele, president of Co Sport said.
An typical hotel in Co Sport's inventory is the four-star China People Palace, where a double room during the games is yours (in combination with tickets) for US$585 (A$670) per night. High hotel rates are one reason why cities around the world are gearing up to host sporting events. Ultimately though, tourism is the prize.
The average television audience of a Formula 1 race is around 80 million - each of these is a potential tourist. But direct tourism around the event is also major motivator, which is why national tourism boards are often integral in putting bids together to attract sporting contests to cities.
The economies of cities, regions and even countries around the world are increasingly reliant on the visiting golfer or the travelling football, rugby or cricket supporter, says Sport Business International, a trade magazine. For some countries, sport can account for 25 per cent of all tourism receipts, it says.
The beauty of sports tourists is their demographic. Predominantly male and high-spending, their passion for the game means they are inflexible in travel times.
But travel agents have missed out, admits Glenn Hedley, managing director of one of Australia's largest sports tour operators, Events Worldwide Travel. His company pays commission to those agents who purchase tickets on behalf of clients, but most agents inadvertently push clients to direct sales channels. "Too many agents say when asked about a specific sporting contest 'we don't know anything about that, check on their website' and that drives the sales to us. Not that we mind either way," he says.
But there is a shift towards working with agents, either as licensed resellers or as sub-agents, Hedley believes. This is how many of the world's big events work, with the FIFA World Cup and the Olympics the major exceptions. Most tickets have a mark-up on the value, which the sub-agent builds into their prices. In return, organising bodies restrict internet sales.
The last Rugby World Cup in France, for example, had four sports wholesaler sub-agents in Australia reselling on behalf of the International Rugby Board (IRB). Royalties on tickets ranged from 100 per cent mark-up on individual final tickets, to 30 per cent on earlier stage games when bought in a brace of tickets. These wholesalers could then pass tickets onto individual travel agents. The FIFA World Cup, however, drives all sales through national football associations, partly due to European police requirements to track potential hooligans. As a result, these sales are lost to travel agents except when these fans require add-ons. FIFA, the international football governing body is understood to be reconsidering its direct-channel-only distribution for South Africa 2010 after European wholesalers mounted a challenge. "Rugby has the right approach," says Hedley. The Australian Rugby Union (ARU) is active in growing the sport and works with distributors to get the tickets out and grow the fan base. At a recent Sydney lunch to celebrate the opening of the Bledisloe Cup - the annual games between Australia and New Zealand - ARU spokesman Peter Jenkins said 40,000 room nights had been generated in the past decade through its partnership with the Intercontinental Hotel Group.
Cricket and golf tours are also big business for the four major sporting wholesalers; Australian Sports Tours, Total Sports Travel, Fanatics and Events Worldwide. Former market leader Keith Prowse Sport and Entertainment appointed a new managing director in February and one of his objectives is to reclaim some lost ground in the sports sector. Rugby specialists We Love Rugby (formerly Wallaby Travel), Fox Sports Tours and the Fairfax newspapers' Sporting Edge are also important players in the market.
Hong Kong, which held the Olympic equestrian events thanks to a long horseracing tradition combined with mainland China's non equine flu free status, is at the forefront of destinations trying to attract major international sports events. The Gulf States are also hard at work, aiming mainly at high-profile motor sports and golf tournaments.
Australian tourists are a key part of this masterplan, as witnessed by the forthcoming Bledisloe Cup tie between Australia and New Zealand that the Chinese territory will host in November - the first time it has been played outside the Antipodes.
The Hong Kong Rugby Football Union was keen to attract the fixture, says its commercial manager Warrick Dent. "We'd run the [IRB] Sevens [World Series] for a long time and we were looking for a second event. It could have been a Super 14s game or one from the [European club tournament] Heineken Cup because we knew that to make it worthwhile it had to be something big," he says.
He says Asian cities soon tired of meaningless exhibition matches played by B-strength teams. The trip to Sydney by David Beckham's Los Angeles Galaxy soccer club last November was an example. "Fans see through this if you do it too often. Our long-term plan is to get international matches here that have ranking for the World Cup qualifiers," he says.
If the Bledisloe in Hong Kong is a success, you can expect to see more offshore international fixtures in rugby and other sports, Dent predicts. As long as they are for re-sale, this is good news for agents.