Olympic Host Town Livigno Sees Mixed Economic Impact During Winter Games

On the climb to Livigno, Italy, a lonely customs checkpoint marks the entrance to a village that has enjoyed duty-free status for centuries. This unique tax exemption typically draws shoppers from across Europe, but during the Winter Olympics, the Italian mountain town’s retail businesses are experiencing an unexpected economic downturn while hospitality venues thrive.

Shop owners along Livigno’s main street report significant sales drops as Olympic restrictions limit the usual influx of day-tripping bargain hunters who normally flock to the duty-free haven during February’s peak season.

“I’m not positive about the Olympics, because usually you are working more than double in this period,” said Olga Salari, owner of a toy store filled with Lego sets. “Now, this period is like our low season.” Salari reports a staggering 70% drop in sales compared to an average February. “Olympic visitors don’t even visit the shops,” she added.

The reason for this retail slowdown stems from access restrictions. Visitors to all six mountain Olympic venues must have accreditation, accommodation reservations, event tickets, or a ski pass—effectively eliminating the casual day shoppers who drive to Livigno specifically for tax-free bargains.

A Centuries-Old Tax Haven

Nicknamed “Little Tibet” for its historic isolation and snow-clad peaks, Livigno has maintained tax exemptions since medieval times. These concessions originally helped the impoverished, cut-off community import essential goods. When paved roads finally connected the village in the 20th century—first to southern Italy and later to Switzerland through a tunnel—the duty-free status transformed into a powerful economic engine.

Today, visitors can purchase up to €300 ($356) worth of goods without Italy’s 22% sales tax. The town enforces specific limits on perfumes, cigarettes, cigars, liquor, and gasoline. This tax advantage has made Livigno a popular destination for skiers from Austria, Germany, Switzerland, and beyond, who typically combine their sporting trips with shopping expeditions.

“The tourists are more interested to see the competition. They’re not so focused on shopping,” explained Manuel Galli, whose family owns an electronics store.

Long-Term Economic Benefits Expected

According to Italy’s Banca Ifis, the overall economic impact of the Games is projected to reach €5.3 billion ($6.2 billion), with tourists expected to spend €1.2 billion ($1.4 billion) at host sites during the next 18 months. Milan Cortina organizing committee president Giovanni Malagò cited more than €5 billion in potential economic benefits during an interview with Italian radio.

The committee notes that the Olympics have already catalyzed infrastructure improvements, including upgraded electrical distribution systems, health facilities, and rail service for Livigno and other mountain venues—investments that will benefit the region long after the Games conclude.

Unlike Livigno, other mountain venues are seeing immediate retail benefits. In Cortina d’Ampezzo, Vice Mayor Roberta Alverà reported “a significant influx of people” filling not just accommodations and restaurants but also shops along the town’s pedestrian-only Corso Italia. Similarly, Bormio’s historic center has bustled with fans throughout the men’s Alpine ski racing program, bringing activity to local businesses.

A Marketing Opportunity for Global Tourism

Sergio Schena, a member of the organizing committee for Livigno, acknowledges the uneven economic impact but remains optimistic about long-term benefits. The global spotlight, he believes, will attract tourists from new markets, similar to Turin’s experience after hosting the 2006 Winter Olympics.

“What we expect to happen is that the markets change, and we get more tourists from the United States and Asia,” Schena said.

This shift concerns some shop owners like Salari, whose business model depends on European visitors who drive to Livigno and use their vehicle trunk space to transport purchases home. She fears that long-distance tourists arriving by plane will only buy items small enough to fit in their luggage.

Nevertheless, most Livigno residents, including struggling retailers, are hopeful that the televised images of snowboarders and freestyle skiers soaring off the town’s slopes will eventually expand their tourism base.

“This is very important because the Games are providing 360-degree publicity around the world and Livigno is coming across very well,” said Derio Claoti, owner of a perfume shop that has experienced a 70% sales drop during the Olympics.

Nearby at the Golden Clock shop, which sells luxury watches and jewelry, Damiano Longa echoed this sentiment despite his own sales decline: “We hope that the advertising that it’s making for Livigno will work for the future.”