Hospitality – a benefit or a curse?

My first recollection of hospitality becoming a key part of sports marketing goes back to the mid 1970s. I remember West Nally renting an impressive house up on Nob Hill in Montreal. We brought over a cook from England who not only dished up terrific food but looked pretty tasty herself.

We entertained the great and good of the international sports world at that house – Juan Antonio Samaranch, Primo Nebiolo (who was particularly impressed), Tommy Keller (who almost moved in!), Un Young Kim, João Havelange and many others all commented on what an enjoyable experience it was and on the important link between enjoying the event and the hospitality surrounding it.

West Nally’s Montreal experience was an attempt at ‘one-upmanship’ to rival the extraordinary Auberge hotel and restaurant at Horst Dassler’s Adidas HQ in Landersheim, France, but it was from Montreal that hospitality started to become a significant part of our strategic thinking, and providing sponsors with a ‘package’ of exclusive rights needed to include ‘exclusive hospitality’.

This strategy led to West Nally helping the newly formed Sportsworld in its plans for hosting ‘official sponsors’ at the World Cup in Spain in 1982, and to the success of the sponsorship package for the Rugby Football Union (RFU) at Twickenham where the newly built corporate hospitality boxes in the South Stand became an integral part of the sponsor offering. Indeed, nowadays quality corporate hospitality facilities are a key component in successful fundraising for new stadium and arena builds, like the new Wembley Stadium. The downside, however, is the tiers of seating that suddenly become empty post half-time. Hospitality is understandably important to venue owners and sponsors but swathes of empty seats at events are damaging the image of the very sport sponsors have chosen to support.

Back in the 1970s, the tented hospitality village concept being developed for official sponsors by Wimbledon and IMG was also gathering momentum, and the inclusion of hospitality for sponsors at other international events started to become the norm. Athletics, golf, tennis, cricket, and horse racing all benefited from hospitality being an integral part of the sponsorship offer.

Initially the hospitality village format was restricted exclusively for the use of official event sponsors and seemed to be a good-value component of a sponsor’s package. However, conflicts began to arise as more specialist agencies emerged wanting to sell hospitality to any company as well as to the general public.

With events becoming more popular, a ‘grey market’ evolved and we started to see a significant growth in new companies offering hospitality outside of an event’s official sponsors’ village. Many tented villages popped up in car parks, fields and even private homes. At first, there were no rules or strategy to these activities but events like the Wimbledon Tennis Championships and the Olympic Games saw that corporate hospitality could become a major revenue generator outside of the official sponsor offer.

With different providers subscribing to different standards and values, hospitality has never really outgrown its ‘grey’ image. Increased activity in the hospitality market has harmed the integrity of some events and has given rise to ambush marketing. Despite attempts to put controls in place and police hospitality offerings, there are still many cases of ticket scalping and pirate operators.

Indeed, the whole question of event corporate hospitality seems to be a double-edged sword – a major fundraiser on the one hand while creating negative perceptions on the other. This conflict is particularly noticeable in the Olympic movement where the survival of many National Olympic Committees depends heavily on the revenue they can generate from ticket and hospitality use at the Olympic Games, which clashes directly with Olympic and LOC sponsors.

If the Olympic Games are to continue to make a positive contribution to both the physical and practical legacy of the Olympic movement, it is my view that the approach to hospitality needs to change. No longer can the International Olympic Committee (IOC) allow the conflicts that corporate hospitality currently creates to continue.

After London won its bid to host the Games, I joined a consortium bidding – unsuccessfully – for the 2012 hospitality rights which felt that an innovative and imaginative new plan was necessary. Our thought was to create a London 2012 Citizen Charter to galvanise everyone who participated at the London 2012 Games, especially through ticket purchase and hospitality offerings, to become an ‘Olympic Citizen’ linked together by social media and encouraged to support and promote the ‘Olympic Ideals’.

Although our concept was innovative, the decision on the selected hospitality offer was ‘romantic’ – what generated the highest revenue! Locog’s role was not about the future – that is for the IOC – but for meeting financial targets.

The ability to protect official sponsors, police standards, control pricing and the use of prestige tickets at venues has become a significant challenge. Seeing some of the complexities now surrounding both the Fifa World Cup and the Olympic Games and their hospitality and ticketing expectations, clearly change is needed to turn hospitality into a more credible way of supporting wider sporting ideals and help bring about positive change for everyone.

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