SportsThe Economic Impact Of The Olympics

The Economic Impact Of The Olympics

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The economic impact of hosting the Olympics is often less positive than expected. Since most cities are heavily in debt after hosting the Olympics, it is best for cities that lack the necessary infrastructure not to submit bids.

In this article, the International World Records Book tells you about the drawbacks and benefits of hosting the Olympic Games for host countries.

Key Takeaways

● Many countries and cities have offered tens of millions of dollars to host the Olympics.
● Many believe that the level of tourism and foreign investment generated by the organization of the Olympic Games could be an economic advantage.
● Others felt that the Olympics were too expensive, leading to huge debts and economic disasters for cities and countries.

Olympics

Cost of the Olympics

Millions of dollars are required to submit an application to the International Olympic Committee (IOC). Cities typically spend between $50 million and $100 million on consultations, event organizers, and travel costs related to hosting responsibilities.

For example, Tokyo’s bid for the 2016 Olympics cost around $150 million and the successful bid for the 2020 Olympics cost around $75 million.

The cost of hosting the Olympics is even higher than the bid process. For example, London paid $14.6 billion to host the Olympics 2012 Paralympics. $4.4 billion comes from taxpayers. In 2008, Beijing spent $42 billion on the Olympics and Athens spent $15 billion on the 2004 Olympics.

Taxpayers in Athens will continue to be subject to an annual assessment of approximately $56,635 until the debt is fully paid. Sydney paid $4.6 billion to host the Olympics in 2000, including $11.4 million from taxpayers. Rio de Janeiro is expected to shell out more than $20 billion by the end of the 2016 Olympics.

Once a city has won hosting the Olympics, it typically increases the number of roads, builds or improves airports, and constructs railway lines to accommodate large numbers of people.

Olympic Village, as well as at least 40,000 available hotel rooms and specific facilities for the event, must also be built or renewed. Overall, infrastructure costs could be between 5 and 50 billion dollars.

Benefits Of The Olympics

Olympics

The host city of the Olympic Games has obtained temporary jobs, which will allow it to continue to benefit from them in the future.

For example, 15,000 new hotel rooms were built in Rio to accommodate visitors. Sochi invested around $42.5 billion in building non-sports infrastructure for the 2014 Olympics.

Beijing has spent $22.5 billion to build roads, airports, subways, and railways, and nearly $11.25 billion to clean up the environment. In addition, thousands of sponsors, media, athletes, and spectators usually visit the host city six months before and six months after the games.

Disadvantages of Organizing the Olympic Games

The increase in job opportunities in cities hosting the Olympics has not always been as beneficial as originally thought. For example, Salt Lake City added only 7,000 jobs, that’s about 10% of the number mentioned by officials in Salt Lake City, the host city of the 2002 Olympics.

Also, most jobs are restricted to workers who are already employed, which doesn’t help the number of unemployed. Furthermore, much of the profits made by construction companies, hotels, and restaurants went to international businesses rather than the host city economy.

Also, games revenue usually only includes a portion of the costs. For example, London invested $5.2 billion and $18 billion in the 2012 Summer Olympics. Vancouver generated $2.8 billion in revenue after spending $7.6 billion on the 2010 Winter Olympics.

Beijing generated $3.6 billion in revenue and spent more than $40 billion on the Summer Olympics in 2008. In 2016, Los Angeles was the only host city enjoying the games, mainly because the necessary infrastructure already existed.

Also, it is difficult to determine with certainty the benefits of hosting the Olympics. For example, Vancouver planned many infrastructure projects before winning the hosting of the 2010 Olympics.

Olympics

Debts arising from the creation of Olympic venues

Many venues built for games are still expensive due to their size or the special nature of birds nesting in Beijing, which amounted to 10 million.

Montreal only paid off its debt for the 1976 Olympics in 2006, and Russian taxpayers will pay nearly $1 billion a year over the next few years to pay off the debt for the 2014 Winter Olympics in Sochi. Also, please note that for Athens Olympics 2004, the Greek debt crisis worsened and remained empty.

Examples of Olympic Games Costs

Montreal Olympics 1976

montreal

During the event, Montreal’s global image grew significantly. The Olympics helped the city become a world-famous city during the 67th World Expo, which celebrates the country’s centennial. regulation soon ran into familiar budgetary problems, as its estimated cost of $360 million was significantly lower than the final bill of $1.6 billion.

The Montreal Olympics ultimately left the city with 30 years of debt and financial disaster, and these rotten, custom venues were a desperate place for decades.

2004 Athens Olympics

2004

Some economists have traced Greece’s continuing economic difficulties to the Athens Olympics in 2004, an event that reflected excessive and irresponsible spending.

First, the total cost – estimated at $15 billion – far exceeded the original budget, but it’s fair to say that the overrun is partly due to additional security costs incurred as a result of the events of 9/11 (which Greece had not anticipated when it applied for the Olympics in 1997).

Although it is an understandable cost, the construction of an unnecessary and poorly thought-out permanent stadium is extremely difficult to understand. Some of these sites are still inactive.

The country is short 50,000 people due to a lack of vision and planning. Every Greek family, since then, has been shared by taxpayers.

Rio de Janeiro Olympics 2016

2016

Health concerns about the spread of the Zika virus in Brazil led many athletes to leave the 2016 Olympics and many spectators not to enter Brazil. Although the Brazilian Government has added 2,000 medical professionals to the Olympics, the country’s debt crisis has strained the healthcare system.

Additionally, scientists have determined that water used for boating and swimming is contaminated with untreated sewage and “superbugs”. which increased health problems. Prior to the Olympics, Brazil had lost an estimated $7 billion in tourism due to the Zika virus.

Hosting costs for the 2016 Olympics are approximately $13.1 billion ($3.5 billion over budget), plus $8.2 billion for upgrades and renovations infrastructure, financed jointly by the public and private funds. The economic benefits expected from hosting the Olympics have not materialized in Rio.

According to the Associated Press, the state of Rio de Janeiro has backlogs of teachers, hospital staff, and pensions, and the city has a near-record crime rate.

Tokyo 2020 Olympic Games (2021)

tokyo

Japan won the 2020 Olympics with a bid of $12 billion, beating rival Italy to host it. Subsequently, however, a novel coronavirus-19 pandemic broke out in the spring of 2020 and the decision was to postpone the Olympics to the summer of 2021.

This postponement resulted in an increase in total expenditure of $2.8 billion, estimated to be over $26 billion. It was decided to ban viewers from watching the summer outbreak of novel coronavirus – 19 in many parts of the world, including Japan.

Without fans, international travel was not enough to cover the costs of the Japanese Government. Although the economic costs are significant, health costs may be higher.

As of the days before the opening ceremony, July 20, 2021, 71 athletes were tested positive for a novel coronavirus.- Yes. During the same week, the number of reported cases in Japan increased by more than 1,700, which is 26% more than the previous week.

The final result

Hosting the Olympics often results in a severe shortage of the urban economy. Unless a city already has the infrastructure to support a large influx of people, it might be best not to host the Olympics.

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