Rio Games are Bucking Travel Insurance Trends
29 Jun, 2016By: Tracey Schelmetic
If You Bet on Lots of Claims to Cancel Travel, You'd Have Made a Bad Bet
While the economic value of Olympic Games are complex enough to fill a text book, there is one industry that typically sees a spike in its fortunes in Olympic years: travel insurance.
When global sporting championships take place in foreign locations, travelers often turn to insurance policies to keep them from losing money due to trip cancellation or illness. While it’s true that this year, companies that sell travel insurance are anticipating a sales increase of between 13 and 15 percent as a result of the Games, the lackluster interest in travel to the Rio Summer Games may be slowing the usual trend.
That's right: the games with pollution, Zika, economic and political unrest: people are still coming. They're not cancelling.
According to Jamie Biesiada writing for Travel Weekly, the 2014 Winter Games in Sochi, Russia, InsureMyTrip saw a 200 percent increase over typical travel volume. The 2014 World Cup, held in Rio, also saw a 200 percent increase.
For a number of reasons – media coverage about a lack of preparedness on the City of Rio or scares about the Zika virus, the travel spike hasn’t happened this year. InsureMyTrip has actually reported seeing a 60 percent decrease in travel to Brazil this summer. With the games only a few weeks away (the opening ceremonies are set to take place on August 5th), this has many in the travel industry worried.
One would imagine that Rio, being perceived a riskier destination than London, for example, would increase the volume of travel insurance being purchased, noted Biesiada. While this may be true, the decrease in the volume of travelers may keep the purchase of travel insurance flat.
“The same factors keeping some travelers away from the Games this year, such as Zika and the desire to have medical and evacuation coverage, might spur others to purchase insurance for their trip,” she wrote. “The political and economic climate in Brazil are also likely on travelers’ minds, with heightened media concentration on those issues as the Games approach.”
Jeff Rutledge, CEO of AIG Travel, told Travel Weekly that the risk of traveling for this year’s Summer Olympic Games is on the minds of Americans considering making the trip.
“We have not experienced an increase [in insurance sales] that we can specifically attribute to the Olympics,” he told Biesiada. “But we have seen an increase in inquiries regarding Zika from travelers with existing policies who are traveling to affected areas.”
While Olympic officials and political leaders in Rio remain positive about the potential for a successful Summer Games, others have expressed doubts. Business Insider has reported that rising crime and instability are raising doubts among officials and residents in Rio de Janeiro. Homicides and street robberies are on the rise, and South America’s worst economic climate in years is leading to considerable civil unrest. Pollution of the city’s water venues for some Olympic events has also been a concern.
“All this has most likely had a chilling effect on ticket sales,” wrote Business Insider’s Christopher Woody. “As of late May, only 4 million of the available 6 million tickets (down from the 7.5 million that were to be offered) had been sold. Of the 2 million unpurchased tickets, 800,000 were for soccer events, Brazil's most popular sport.”