London Organizing Committee of the Olympic Games
Background
London Organizing Committee of the Olympic Games (LOCOG) is planning the 2012 Olympics in East London. This part of town will be revitalized through the building of Olympic Park. The LOCOG hopes to create “Everybodys Games” by keeping ticket prices relatively accessible to the public and providing public transportation. We hope to achieve profit and turnout similar to the 2000 Sydney Olympics.
Recommendation
We recommend trying to reach revenue targets by risking a small percentage of attendance. The Australian Olympic team succeeds in most of the same sports as the Great Britain Olympic team and thus our recommendations for pricing as seen in Exhibit 1 and 2 are based on the prices of the Sydney Olympics. Due to inflation since the 2000 Sydney Olympics we incorporated a 25% increase in ticket prices. The only exception to this is our ticket prices for indoor track cycling in which we included a surcharge due to its popularity in Great Britain.
Basis for Recommendation
We want to try and maximize revenue by increasing prices in tickets while still keeping the prices relatively low to maintain the image of “Everybodys Game.” We took into account the inclusion of public transportation costs and inflation. Our ticket prices reflect the need to attract knowledge fans but also average Londoners. We hope to maintain a relatively packed stadium while also maintaining our revenue goals. We modeled our ticket pricing after the Sydney Games as the number of tickets available for sale is similar. Sydney, like London, is a major city in a wealthy, sports loving nation. We hope to attract the same large attendance and high willingness to pay that were present at the Sydney Olympics.
Assumptions and Risks
We made the assumption that since indoor track cycling is the event that England