KRASNAYA POLYANA, Russia - Businesses and residents have a lot to gain if the Winter Olympics fulfills Vladamir Putin’s pledge to turn Sochi and its surroundings from a summer playground for well-off Russians into a year round international resort for everyone. But that’s a big “if.”
The limited number of foreign spectators at these games is dampening dreams. So is all the negative attention around the not-quite-finished hotels and the many “For Rent” signs on empty apartments around Olympic Park.
Merchants are trying to keep their spirits up by looking past the Olympics to a forthcoming new Formula 1 race in Sochi and the 2018 World Cup.
“It would be nice to be able to stay open all year, so that no one has to take an extra job,” said Marina Nagabedian, whose family owns a convenience store near the sands of the Black Sea shore, not far from Olympic Park. In the past, her husband took a second job in the winter to help feed their two kids, and they just “waited for summer again.”
“In summer, we have lines out the door,” said Nagabedian, in her 40s. This week, in the midst of the Winter Olympics, the store sees barely a trickle of customers. Many come in to get change for large bills instead of buying her wares: milk from regional farms, fresh poppy seed buns and “Sochi”- emblazoned slippers.
A look back at past Olympics suggests the odds are against local businesses reaping huge rewards, despite ambitious promises. The 2004games left Greece saddled with huge debt and didn’t lead to long-term benefits for businesses. Just a few years after the 1998 Nagano games in Japan, the city had little to show for its role as Olympic host. Accurate data are hard to come by because governments don’t always want to find out - or publicize - whether the heavy expenditure was worth it.
Up the nearby Caucasus Mountains, Vitaly Pishchuk is doing brisk business at a cellphone franchise in Krasnaya Polyana, with more than $17,000 a month in turnover. Foreign tourists, construction workers - “people from all social classes need us,” he said.
He hopes it stays that way beyond the Winter Games so he can afford to take his 4-year-old son to a new Sochi amusement park dubbed Russia’s Disneyland. And maybe they’ll learn to ski. If business sags, the parent company will likely shut down his roadside shop and leave him looking for work elsewhere.
Then he pauses and reflects on the challenge of attracting visitors here.
Americans have little incentive to cross half the planet for the Caucasus slopes. Europeans have the Alps and more. Even drawing in Russian visitors, as the government hopes to do with a promised 42,000 hotel rooms and more than 90 miles of slopes, may not be so easy.
Vacationing here “is pretty expensive for an average Russian tourist,” both up the mountain and down on the Sochi shore, Pishchuk says. “You can travel to Turkey or Spain for 300 bucks.”
Sochi, with its mild climate, once drew the Communist elite to its seaside resorts but was widely seen as a summer destination.
The region’s $51 billion transformation for the Olympics has been by all accounts striking. But for all the money spent on Olympic infrastructure, 74-year-old Sochi native Dina Kobolenko says, “This was a village, is a village and will remain a village” - not Russia’s answer to Las Vegas or Dubai.
She’s proud of her city and can’t afford to be down on the games. Her three-generation household’s income depends in part on a tourist kiosk she manages selling maps, books and postcards outside the Sochi train station. Any extra profit she can make on a Russian-English map of town helps her $342-a-month pension stretch further.
She was horrified at the amount of money spent on the games - “That is a lot! A lot, a lot!” - not to mention the estimated $2 billion yearly cost to maintain Olympic facilities. And she’s skeptical of the government’s projections of bringing in cruise ship business, doubling tourism to 6 million visitors a year and creating 600,000 jobs.
Business, Pages 68 on 02/16/2014