Nolan Fahey
It is the ultimate goal of every city to host the famous
Olympics. To get two weeks in the
limelight of the entire world is seen as a chance to show off just how awesome
your country is. What’s not to love
about hosting the Olympics? You get a
chance to massively increase your infrastructure, increase tourism and turn an
economic benefit in the long run. The
trouble is, the only thing that happens is a massive increase in spending on
infrastructure and an increase in jobs for a few years preceding the
event. The gains from the broadcasting
of the events, and ticket revenue are nowhere near enough to compensate for the
expenses of the more recent Olympics.
As
you can see in the graph, all of the Olympics since 2004 have cost more than
sponsorship and ticket and broadcasting revenue combined. Although the cities are able to convert some
of the venues into multi-use facilities that see some use in the years after
the Olympics, these venues and the exposure to the world are not enough to
spark waves of new tourists. In fact,
before the Olympics, the cities see a decrease in tourism, and don’t always
gain that back fully. During the
Olympics the cities experiences large dips in tourism outside of Olympic
spectators and athletes, and these “tourists” hardly boost the local economy as
much as regular tourists because of their interests in the Olympics prevent
them from taking part in other activities that would stimulated the local
businesses. Yet as these cities continue
to see economic losses, other cities clamber over each other to bid to host the
next Olympics. There are a few potential
fixes to maximize economic benefits to host cities and countries. As experienced with the last couple Olympics,
the larger cities fail to increase tourism directly to the city as a result of
the Olympics, however smaller cities with lesser known attractions are able to
boost national and international knowledge in their places of interest. A potential solution would be for smaller
cities to host Olympics, not cities that are know of world wide, and already
have large numbers of tourists visiting, because it is unlikely for them to
boost already relatively high numbers. Smaller cities may be able to increase
tourism in the later years, and spawn new suburbs to accommodate the increase
traffic. These cities may not have the
finances to build adequate venues, however they may be able to take out loans
from the government or from larger cities, as they will most likely be able to
pay them off better than a larger city would.
Another way to make the Olympics host able for smaller cities is to
construct less permanent structures.
Along with being cheaper to construct, they do not require expensive
demolishing if it ends up derelict and in the way of future projects. The U.S. Olympic Swimming Trials are
sponsored by the Mutual of Omaha is hosted in a portable pool, which allows the
trials to be held in a different city every four years, any city with a
sizeable hockey or soccer arena is able to host the Trials.
Unfortunately, cities will
continue to waste millions of dollars hosting an event that will only put them
in the hole financially.
I agree 100% with this article country's spend millions of dollars every 4 years just so they can host the Olympics. They think that they will make money by doing this when in the long run they don’t because all the money they make goes to the building that they had to build. If you want to make more jobs for your country hosting the Olympics is not the best way because it will create jobs when they are building the building's the they need but after the Olympics are over those jobs go away. I personally think that we should pick a location to have the Olympics and have them in the same place every 4 years.
ReplyDeleteI thought that the cities would gain money for hosting the Olympics, it would make more sense for there to be one Olympic city for every Olympics, so then cities wouldn’t have to worry about losing money, there could be a decrease in pride for not hosting the Olympics, but when it comes down to it, it’s all about the benjamins.
ReplyDeleteIf a smaller city were to host the Olympics how would they be able to pay back the cost if even a larger city couldn't? And would there even bee room inside a smaller city from all of the different stadiums needed and not to mention all the houses? I agree that countries do spend too much money on a large venue that will only last for a short time and gets virtually no use after the events are over; however, it is a chance for a country to show off. So I believe that countries should be allowed to spend however much money they please.
ReplyDeleteThe reason that smaller cities and countries make money on the Olympics is because the Olympics actually promote interest in their attractions, where as a larger country or city would not benefit from promoting their already well known attractions. The trend was tourism afterwards increased in smaller cities and countries, but did not in larger countries.
DeleteI think this is a good topic to bring up because most people do not know the negative economic consequences of the Olympics. Many host cities are left desolate, a tribute to what once was. The stadiums generate a much lower profit than the cost and the city cannot handle the debit they incur because of it. Your solutions are reasonable and could have a greater economic benefit, however I am wondering if big cities would be willing to give up the Olympics as there is so much pride in hosting them. I think as the Olympics continue to expand, creating more costs per less revenue people will begin to realize the negative externalities created by the Olympics in a big city and work to improve the situation.
ReplyDeleteI completely agree that these countries are getting into a huge hole with how much they are spending on the Olympics. Looking at the graph that you had chosen was appalling seeing how much was spent on the Sochi Olympics. There were so many negative externalities that came along with this outrageous price like the quality of the hotels. You would think that if they were putting this much money into something, they would up the standards of the accommodations. I really like your idea of building in unpopular places but I can foresee the problem of unfinished accommodations just as there were last year. This would cause a whole series of negative externalities which would lead to the marginal cost over powering the marginal benefit of it.
ReplyDeleteMakes sense the the over budgeted project would never turn a profit. Also the fact it is in a horrible city. Also, does seem that the USA may have made some in the 2002 olympics. I do like the idea of putting the olympics into smaller cities. That will have a lot larger of an economic gain, potentially, than hosting it in a larger city. Gives people a reason to go to the city. It's a lot like the superbowl. In theory it'd increase everything, but in reality it doesn't.
ReplyDeleteThis is a problem that more countries that are looking to host the Olympics should look into. By looking at the graph, you can clearly see that after the 2002 Salt Lake City Olympics, the cost of hosting the Olympics outweighs the long term benefits. From 2006 and on, you can clearly see how much these countries are losing. I just have to wonder why nations put so much money into these events when they know they are not going to get a chunk of it back. When you look at the difference in costs between Athens and Beijing, sure Beijing got more money back than Athens but Athens spent less than half of what it cost to host the Beijing Olympics. Now you have Russia hosting the Sochi Olympics, which to this date is the most expensive Olympics and they haven’t got a fraction of their money back. I have to agree that hosting the Olympics does show off your country for a couple of weeks, but is it really worth fifty billion dollars? That’s what I do not understand. I have nothing against Russia hosting the Olympics, but their strategy and costs have left them with a huge hole in their economy which I don’t think they’ll ever cover. Good job on the post.
ReplyDelete