The Olympics. A tradition with over 2,000 years of history, linking sport and culture. It was revived in the modern era by Baron Pierre de Coubertin with the aim of unifying the world through sport. Today, the Games are a biannual event where the world’s best athletes compete in shiny new stadiums for the whole world to see. However, this comes at a cost.
Author: Alexandra Monteiro Lopes
Almost no Olympic game has stayed under budget in the last 60 years, with nearly none turning a profit. Not to mention the lasting damage it causes to the host city. So, how much does hosting the Olympics really cost?
Hosting the Olympic Games is a once-in-a-generation opportunity to highlight the best parts of your country to the world. Every four years, over five million people attend the Olympics, and over three billion watch it on TV. Competition used to be fierce: twelve cities bid for the 2004 games and ten bid for the 2008 games. However, since then interest has dwindled; five cities applied to host the 2020 Olympics, and for 2024 there were only two options left, Paris and Los Angeles, after three countries dropped the bid. As a result, the International Olympic Committee made an unprecedented decision and agreed to award the 2024 and 2028 Olympic Games simultaneously.
To convince cities to host, the International Olympic Committee (IOC), pitches them with three major claims. The first claim is that the Olympics will increase national pride. With the Olympics, the host country’s culture is in the spotlight for the world to see. For example, the 1964 Tokyo Olympics symbolized Japan’s recovery from World War II, and the 2008 Beijing Olympics showcased China’s rapidly growing economy. Paris’s 2024 Olympics are exactly one hundred years since they last hosted them, showing that France has been a superpower for the last century.
Secondly, the IOC claims that the Olympics will increase tourism through the number of athletes,media personnel and fans. The Olympics create a temporary boom in spending at hotels, restaurants, and local businesses, as well as contributing to an improved image of the country, leading to increased tourism in the long term. The third claim the IOC makes is that hosting the Olympics leads to improvement of the city. With the games comes the need to upgrade transportation and the local infrastructure. These days the IOC requires various athletic centers, an Olympic village, a media and television production facility, a media village, ceremonial space and green space. This all with transportation amongst them, and special lanes for the IOC executive’s transportation to all venues. All this could later be repurposed and benefit the local population and economy.
Although the IOC makes great promises, the data proves the contrary. A study showed that net tourism in London in 2012 decreased by 5% and in Beijing in 2008, net tourism decreased by 20%. Air France warned this year that at the beginning of July, they expected $180 million in decreased revenue because of the Olympics. Host cities often overestimate the amount of revenue that the tourism will bring in. The studies predicting the economic benefits that will happen because of the Olympics are often done by the parties that want the Olympics to happen (a.k.a. the IOC). During the games, there is a significant avoidance in traveling to the hosting city. Tourists that would normally come during this time avoid the city due to the congestion and confusion. Economists Steven Billings and Scott Holladay claim that there is no long-term GDP impact associated with hosting the Olympics.
The venues built for the 2012 Olympic Games in London have shown that they have kept their promise. The focus of London’s successful bid for the games was legacy through the sustainability and adaptability of stadium and venue architecture. Hosting the Olympic Games presented the opportunity to rejuvenate a 560-acre site in the east of the city, an area which historically featured an industrial site. As a result of the regeneration, 4,000 new trees have been planted since 2012, bringing the total to 13,000 trees; bird numbers increased greatly; and endangered invertebrate species began to inhabit the park. While this is a great example of what host countries should do, the next edition of the games didn’t follow suit.
The 2016 Rio de Janeiro Olympic Games were highly anticipated because they were the first to be held in a South American city. They won the bid back in 2009 when Brazil was growing and this was supposed to send a message that it could be a world power. However, one of the worst recessions hit them right before the games, along with an outbreak of the Zika virus. Not to mention a high-profile money laundering scandal. All this caused unemployment to shoot up, and inflation to rise, and yet they still needed to invest billions of dollars into the Olympic venues. This resulted in massive debt for the nation and left them with white elephants – venues too expensive to maintain but too difficult and precious to tear down. After the two weeks had passed, they were abandoned and left to rot. This is unfortunately not the only example, in Athens the Aquatic Center and venues are currently vacant. Beijing’s rowing and kayaking course is now empty.
Hosting the Olympics is a commitment that is nearly impossible to reverse once made, so cities must have facilities for all the Olympic sports. Which usually means the construction of new ones. On top of all the infrastructure needed, the host city must adhere to strict security rules, whose number of rules have risen over sixfold since the 1990’s. The cities are forced into a situation where they must spend money no matter what. Even though these are IOC rules, the one responsible for any cost overrun is the host. This explains why the latest Olympic games have always gone wildly over budget.
London budgeted $5 billion to host the 2012 Summer Games. The actual cost? 18 billion dollars. Rio budgeted $14 billion to hold the 2016 Summer Games, but it ended up costing $20 billion. Sochi budgeted $10 billion to host the 2014 Winter Games when the actual cost amounted to $51 billion – the most expensive ever. It’s becoming increasingly clear that more and more cities are struggling to afford the Games. Only two countries bid to host the 2026 Winter Games, Italy and Sweden. However, this doesn’t mean the Olympics will be gone for good. The Olympic Games were never just about sports. It is a way for countries to show off their progress on the world stage, which is why Russia and China have been the biggest spenders. So long as these countries continue to spend, the show will go on. But if the IOC wants to see more diversity among the host city candidates there have to be improvements made in the way they are run, assuring countries that they will win more than they lose by hosting.
Cover image by: Roman Grac from Pixabay
Edited by: Johanna Larsson Krausová
