Australia hosts the Commonwealth Games this week. Will it draw the crowds? They've already been coming here for years, says Tim Webb

'Where the bloody hell are you?" asks Australia's new official advertising campaign ahead of the Melbourne Commonwealth Games, which start this week. Even in Australia, famed for its informality, some people thought that this was a step too far, fearing the campaign would offend tourists, rather than inspire them to flock to Oz.

Melbourne folk, who like to think of themselves as being more sophisticated than Sydney dwellers, were most sensitive about being labelled uncouth. After all, the Commonwealth Games is the biggest event to take place in the city since 1956, when it hosted the Olympics. Almost two million visitors are expected during the Games, with 40,000 from overseas.

Yet the landscape is little changed. Visitors who come to Melbourne when the Games are over should not expect to see dozens of spanking new stadiums and a proliferation of other facilities. Nor will you hear talk of regeneration, unlike in Manchester, host of the last Commonwealth Games in 2002, which used them to kick-start a £2bn renewal programme. Locals say their city already had just about everything it needed to host the Games. Besides, they quite like it as it is, thanks very much, mate.

Only A$500m (£200m) has had to be spent on big projects because most of the stadiums are already there. The total bill for the Games will be less than A$2bn, all of which will be paid for by ticket sales, sponsorship and broadcasting rights. Not bad when you consider Greece expects to spend the next decade paying off a €36bn (£25bn) deficit partly created from hosting the Olympics in 2004. So how has Melbourne done it? The Games are not the only event in the city's hectic sporting calendar. Every year, it holds the Australia Open tennis tournament, the Melbourne Cup (horse racing), Formula One grand prix (famously swiped from the previous venue, Adelaide, in 1996 and which begins four days after the Games close), and the Australian Football League finals. All of these draw in around 1.3 million visitors.

Even over the course of a typical weekend, around 200,000 spectators will watch Australian Rules football at the Telstra Dome (which seats 55,000) and the recently refurbished Melbourne Cricket Ground (which seats 105,000), says Michael Taylor, an international games consultant. Both venues will be used in the Games, with the MCG the main venue, as will the Rod Laver Arena where the Australian Open is held. The main venues are all 15-minute walks from the centre of the city.

It is no accident that Melbourne is home to so many sporting venues, says Ron Walker, the head of the Games committee. "God gave Sydney one of the most beautiful harbours in the world, but gave Melbourne mudflats." Australians used to call Melbourne and the surrounding Victoria state the "rust bucket" of Australia because it was more backward than the rest of the country. But Melbourne has carved out a niche for itself by staging these events. "They have given a sense of purpose to the people of this state. They laughed at us when we bid for these events. But not any more."

John Brumby, Victoria's treasurer, says that staging events is Melbourne's best way of advertising itself to the rest of the world. "We are 1,400km from a lot of places. Our problem is to make people aware we are here. We do not have a Great Barrier Reef or Opera House. We have to get our own icons through events."

Games chiefs will not admit it - they insist they are all good Australians - but they hope that the event means that more tourists come to Melbourne rather than Sydney. And if the Games are as good as they say they will be, in the next few years, Sydney tourism officials might be asking visitors "Where the bloody hell are you?".