This history appears in Sportico’s Morning Lead email. To sign up for a newsletter, simply click this link to receive it right in your box.
Without a doubt, sponsoring the Olympics attracts a lot of attention. Does it, at least during and immediately following the game, offer little in terms of money? The answer is ambiguous if Olympic’s most recent income accounts are anything to go by.
A case in point is Delta. As part of a$ 400 million multiyear sponsorship program, the airline is one of the main U.S. Olympic Team sponsors. For Paris this summer, its planes seemed generally to be carrying athletes, as British tourists ‘ perspective of France echoed Yogi Berra’s attitude of a famous New York team: No a goes there because it’s very crowded. According to Delta, U.S. travelers avoided Paris during the Olympics, which caused a$ 100 million revenue loss on its French routes in its earnings report from October.
” Really having a great year in the trans-Atlantic, just if you ]overlook ] the one thing, the exogenous event, being the Olympics”, Delta president Glen Hauenstein said at a September investment conference. It was like turning on the lighting when the Olympics were over in August, which is how things always go now.
The airport group claimed that Air France-KLM, the major sponsor of the International Olympic Committee, lost about$ 210 million in lost revenue, which was worse than it had anticipated prior to the Games. According to Jefferies Group flight analyst Sheila Kahyaoglu,” the Olympics have a softening effect on travel in the host region when traffic flows become more concentrated,” she wrote in a research note.” Travel is slowed down by the usual visitor by taking one northbound flight in, staying the entire trip, and taking one outbound flight out. The Olympics taking place during the normal maximum time amplifies this. It furthermore dampens non-Olympics related go to the area”.
Even one of the businesses that clearly benefited from the Olympics, Airbnb, did n’t find the impact completely positive. According to Wall Street’s measurement, which measures income circulation and pricing power, Airbnb experienced weaker head times on client bookings earlier this year.
According to Airbnb’s chief financial officer Ellie Mertz,” we truly saw some of the lead-time warmth that we were seeing in the EMEA ( Europe, Middle East, Asia ) was related to some distraction around the Olympics,” according to a contact with buyers two weeks ago. It’s tough to find little problem with the Olympics for Airbnb, however: Paris ordering were up five-fold from 2023, helped along by a 50 % increase in available apartments. However, enthusiasm for Paris was baked into Wall Street’s objectives. Due to higher advertising costs, Airbnb’s earnings for the second quarter far exceeded scientist expectations.
Results were likewise mixed for a smaller partner, medical scrubs manufacturer Figs, which sponsors the U. S. Olympic medical and teaching team. The business ‘ marketing expenses increased by 50 % to$ 9.5 million in the quarter for the company’s Olympic sponsorship and related marketing initiatives.
The emphasis on the Games delayed its quarterly end-of-summer selling push, too. In a contact with investors two weeks ago, CEO Trina Spear explained why Figs fell short of sales expectations by explaining that “our back-to-school campaign was moved after in the timeline this time, largely due to the timing of our Olympian concentrate.” This year, we did n’t have the best time to host this event.
Interestingly, a review of the earnings calls of seven other top Olympic sponsors—including Alibaba, Allianz, Procter &, Gamble and Salesforce—found just a passing nod to the Games or no mention of the Olympics at all. Considering headline sponsorship of the games costs some$ 100 million, that’s a bit of a surprise.
Less surprising are two sponsors ‘ statements to investors that the Paris Games ‘ sponsors had only experienced positive business outcomes. Coca-Cola said volume of drinks sold in Europe jumped because of the Olympics, though the company did n’t cite any numbers. Visa, meanwhile, appears to have been the Games ‘ biggest winner: The credit card payments network attributed a jump of 130, 000 more merchants accepting Visa in Europe to the games, which, along with other services Visa provided related to the Olympics, contributed a whopping$ 225 million revenue boost in its third quarter. In October, Visa CEO Ryan McInerney remarked,” The Olympics and Paralympics certainly helped.”
However, brands should n’t be focusing solely on the immediate business effects of Olympic sponsorship. It’s a big-picture marketing ploy that should pay off long-term. At least that’s the case Figs ‘ Spear made to concerned analysts.
” This was a win for the brand”, she said, in response to a question one the recent call. ” And I want to just say this was n’t a short-term play. The campaign’s objective is to promote long-term brand loyalty and brand awareness that will pay off over time. We were able to identify incredible data points. Over a billion earned media impressions. We saw significant increases in site traffic and brand searches. Our]sales ] leads surged during the period”, Spear said.
” And so, I really feel good about the Olympics campaign”.