Download pdf - The Road to Rio 2016 · until the 2016 Summer Olympic Games in Rio de Janeiro, Brazil. The Olympic Games have evolved into one of the best-managed global brand-marketing outlets in

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DEBORAHWEINSWIG,MANAGINGDIRECTOR,FUNGGLOBALRETAIL&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2016TheFungGroup.Allrightsreserved.

The Road to Rio 2016 FungGlobalRetail&Technology is countingdowntheweeksuntil the 2016 Summer Olympic Games in Rio de Janeiro,Brazil. The Olympic Games have evolved into one of the best-managedglobalbrand-marketingoutletsintheworldduetotheirglobal reach, and they are one of the largest-scale and mostprofitableofallmediaevents.Wewillbetrackingdevelopmentsandnewsrelatedtobusiness,theeconomy,politics,retailandtechnologyintherun-uptotheGamesinAugust. CONTEXTTheSummerOlympicGames,takingplaceAugust5–21inRio,constituteone of the most highly anticipatedglobal sporting events and areexpected to generate record-breaking viewership numbers.According to Nielsen, the BeijingOlympics attracted 4.7 billionviewers over 17 days in 2008. In2012, NBC’s London SummerOlympicsbroadcastswerethemost-watched television event in US TVhistory.Thus,alleyesareonBrazilas itprepares tohostmore than10,000athletesandhundredsofthousandsoftourists.

Brazil is the first-ever SouthAmerican country to host theOlympics, and it has facedbothchallengesandtriumphsasithasundertakenrapidandexpansivedevelopmentinordertosucceedinitsroleashost.Inthis,ourfirstinstallmentinaseriesofreportsonthecountdowntothe2016SummerGames,wetakeaquicklookatthemacroeconomicconditionsinBrazilandthecountry’sOlympicbudget,thendiscusstheZikavirusthreat,ticketsalesandRio’spreparationsintermsofinfrastructure.

MACROECONOMICCONDITIONSINBRAZILAccordingtotheInstitutoBrasileirodeGeografíaeEstatística,Braziliscurrentlyfacing:

• Unemploymentof11.2%

• Inflationof9.3%(April2016versusApril2015)

• AnexchangerateofUS$1=R$3.58

• A7.0%declineinretailsalesvolumein2016

RIOOLYMPICSBUDGETFIGURESAccordingtotheInternationalOlympicCommittee(IOC):

• The 2007 proposed balancedOlympic budget from the Organising CommitteesfortheOlympicGames(OCOG)wasUS$2.82billion.

• The2007proposednon-OCOGcapitalinvestmentbudgetwasUS$11.1billion.

• ThecurrentoperatingOlympicbudgetisR$7.4billion(US$1.85billion).

• TotalprivateandpublicOlympic-associatedexpenditureshavetotaledUS$10billion.

Source:Reuters/SergioMoraes

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THEWORLDHEALTHORGANIZATION(WHO)REJECTSRIOOLYMPICSPOSTPONEMENTGlobalpublicityregardingtheongoingthreatoftheZikavirus—amosquito-bornevirusthat causes severe birth defects and rare neurological problems—is taking a toll onOlympicticketsales.

In late May, 150 health experts issued an open letter to the United Nations’ WorldHealthOrganization,callingontheagencytodelayorrelocatetheRioGamesduetothe“publichealththreat”posedbyZika.WHOofficialsrepliedbystatingthatthere is“nopublichealthjustification”fortakingsuchadrasticmeasure.

Source:Reuters

However, concernspersist.OneOlympic athlete, Spanishbasketball player PauGasol,hasannouncedthathemaypassuptheopportunitytoplayinRiothissummerduetotheZikathreat.ReigningOlympictennischampionAndyMurraypubliclystatedthathewouldbeseekingmultiplemedicalopinionsregardingZika,andsaidthat,ifhedidgototheGames,hewouldnotstayintheOlympicVillage,butinanoff-siteapartment.

IOC:67%OFRIOOLYMPICSTICKETSHAVEBEENSOLDTheIOCconfirmedlatelastweekthat67%ofavailableticketsfortheRioOlympicshavebeen sold, and that 2million tickets remain, with the games two and a half monthsaway.Yearsago,itwasannouncedthat7.5millionticketswouldbeavailable,butthatnumberhasdroppedto6.6–6.7milliontickets,withtheexactnumberdependingontheremainingconstructiontobedoneandthereductionofvenuecapacitiesforswimming,rowingand canoeing.Unexpectedly,of the2millionunsold tickets,nearly800,000arefor soccer—Brazil’s favorite sport.Organizers have cited Brazilians’ culturaltendencyto“doeverything last-minute”asone reason for the lagging ticket sales. Forperspective, 11 million out of 11.3 millionavailable tickets were sold for the 2012LondonOlympicGames. Source:Rio2016.com

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RIO’SINTERNATIONALAIRPORTDOUBLESITSCAPACITYINPREPARATIONFORTHEGAMESIn order to deal with the hundreds of thousands of people flooding into Rio for theOlympics, the city’s international airport, known as Galeão, has nearly doubled itspassenger capacity, from 17million passengers per year to 30million passengers peryear. The airport addeda kilometer-long terminalwithnew x-ray scanners, elevators,check-in desks, parking garages and improved electrical networks. The rest of theairport was revamped as well, in order to make room for 100 new shops andrestaurants.ThenewterminalopenedtothepubliconMay23.

Source:Rio2016.com

RIODEBUTSMETROLINE4,CONNECTINGTHECITYCENTERANDOLYMPICPARKA new metro line, Line 4, linking Rio’s city center, tourist neighborhoods and beachareas to theOlympicPark, embarkedon its first triponMay22.Upon full operation,which begins August 1 (four days before the start of the Olympics), the line willtransportupto300,000passengersdaily,accordingtotheIOC.DuringtheGames,thelinewillbeopenonlytoeventticketholders,athletesandmedia.

Source:Twitter@metrolinha4rj

According to State Transportation Secretary Rodrigo Vieira, due to delays inconstructionandbudgetshortfalls,thetrainwillrunlessfrequentlythanexpected.Thelinewas initially forecast to cost R$5 billion (US$1.4 billion), but is now estimated tohavecostaboutR$9.7billion(US$2.8billion).

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DeborahWeinswig,CPAManagingDirectorFungGlobalRetail&TechnologyNewYork:917.655.6790HongKong:852.6119.1779China:86.186.1420.3016deborahweinswig@fung1937.comRachaelDimitResearchAssociateHONGKONG:10thFloor,LiFungTower888CheungShaWanRoad,KowloonHongKongTel:85223002470LONDON:242-246MaryleboneRoadLondon,NW16JQUnitedKingdomTel:44(0)2076168988NEWYORK:1359Broadway,9thFloorNewYork,NY10018Tel:6468397017FBICGROUP.COM