The 2002 Winter Olympic Games will provide long-term benefits to the real estate markets in Salt Lake City, according to a report by Chicago-based Jones Lang LaSalle.
In particular, the city’s hotel sector is poised for strong growth because new hotels constructed in preparation for the Olympics provide a strong anchor for the city’s tourism and convention market, notes the report, "Salt Lake City 2002: Lessons from Past Olympic Hosts." New hotels built for the Games include the 775-room Grand America Hotel and the 359-room Marriott City Center.
"Experience suggests that hotel markets [in host Olympic cities] have tended to fall into a trough in the year following the Olympics, which is not surprising in view of the artificial peak created by the Games," says Melinda McCay, a senior vice president at Jones Lang LaSalle. "However, the markets tend to recover quickly, creating a strong growth position for the years following the Games in which the general market cycle influences prevail."
Atlanta used the Olympics to increase its convention business, registering a record number of conventions the year following the 1996 Olympics, according to the report. In Salt Lake City, 2002 is expected to be a record year in terms of convention delegates despite the sluggish economy.
The report also notes that tourism increased by an average of approximately 25% in the past four host cities of the Summer Olympic Games — Seoul (1988), Barcelona (1992), Atlanta (1996) and Sydney (2000) — in the second year after the Games.
Among other findings of the report:
• Salt Lake City’s office markets are expected to benefit from major improvements to the transportation and telecommunications infrastructure. The $1 billion in highway reconstruction and a new light-rail system will make the city more attractive to businesses.
• A number of previous host cities have converted their Olympic villages into new residential neighborhoods or college housing. Salt Lake City will follow suit by converting its Olympic village, built on the campus of the University of Utah, into dormitory space.
• The growth in the tourism and convention sectors will have a lasting impact on Salt lake City’s retail sector. Retail markets should be buoyed in the long-term by the increased flow of visitors to the city in the wake of the Olympics.