The Economic Impact of Olympic Host Cities


The economic effect of hosting the Olympics is often less favorable than expected. Because most towns have ended up substantially in debt as a result of hosting the games, localities without the essential infrastructure may be better off not bidding San Fran payday lender.


Many nations and localities bid tens of millions of dollars for the opportunity to host the Olympics.

Many people feel that the amount of tourism and foreign investment generated by hosting the games would be beneficial to the economy.

Others believe the games are exorbitantly priced, leaving towns and countries with large debts and economic troubles.

Costs Associated with Hosting the Olympics

It takes millions of dollars to submit a proposal to the International Olympic Committee (IOC) to host the Olympics. Fees for consultants, event organizers, and travel linked to hosting responsibilities normally range from $50 million to $100 million. For example, Tokyo lost around $150 million on its campaign for the 2016 Olympics but spent about $75 million on their successful 2020 effort.

The expense of hosting the games is considerably higher than the cost of bidding. For example, London spent $14.6 billion to host the 2012 Olympics and Paralympics. Taxpayers contributed $4.4 billion to that total. In 2008, Beijing spent $42 billion on hosting. The 2004 Olympics in Athens, Greece, cost $15 billion. Athens taxpayers will continue to be levied yearly installments of around $56,635 until the debt is paid in full. In 2000, Sydney spent $4.6 billion to host the Olympics. Taxpayers paid $11.4 million of that amount. Rio de Janeiro, Brazil, spent more than $20 billion to host the 2016 Olympics.

When a city wins a bid to host the Olympics, it is typical for that city to build or improve highways, airports, and train connections to handle the enormous influx of visitors. Housing for athletes in the Olympic village, as well as at least 40,000 available hotel rooms and event-specific amenities, must be built or refurbished. Infrastructure expenses might range from $5 billion to $50 billion in total.

The Advantages of Hosting the Olympics

Communities that host the Olympics earn temporary employment as a result of infrastructural enhancements that will continue to benefit the cities in the future. Rio de Janeiro, for example, built 15,000 extra hotel rooms to accommodate visitors. Sochi, Russia, spent over $44.3 billion on non-sports infrastructure for the 2014 Olympics.

Beijing spent more than $22.5 billion on road, airport, subway, and rail line construction, as well as about $11.25 billion on environmental cleaning. Furthermore, thousands of sponsors, journalists, athletes, and fans often visit a host city six months before and six months after the Olympics, generating extra money.

The Disadvantages of Hosting the Olympics

The increase in employment creation for Olympic cities is not always as helpful as originally believed. For example, when Salt Lake City hosted the 2002 Olympics, the city created just 7,000 jobs, or approximately 10% of the amount that authorities had predicted. Furthermore, the majority of employment went to those who were already working, which did not assist the number of jobless people. Furthermore, much of the revenues made by construction businesses, hotels, and restaurants are diverted to multinational corporations rather than the local economy.

Furthermore, cash from the games sometimes only covers a percentage of expenditures. For example, the 2012 Summer Olympics in London took in $5.2 billion but cost $18 billion. After investing $7.6 billion on the Winter Games in 2010, Vancouver, Canada, took in $2.8 billion. In 2008, Beijing earned $3.6 billion and spent more than $40 billion on the Summer Olympics. As of 2016, Los Angeles was the only host city that profited from the games, owing to the pre-existing infrastructure.

Furthermore, it is difficult to determine which advantages result from hosting the Olympics. Before winning the bid to host the 2010 Olympics, Vancouver, for example, had planned several infrastructural upgrades.

Debt incurred as a result of the construction of Olympic facilities

Because of their size or unique character, several of the Olympic stadiums remain prohibitively costly. For example, Sydney’s stadium requires $30 million in yearly upkeep. Similarly, yearly upkeep for Beijing’s Bird’s Nest arena costs $10 million.

It took until 2006 for Montreal to pay off its debt from the 1976 games, and Russian taxpayers will have to pay about $1 billion per year for many years to pay off the debt from the 2014 Winter Olympics in Sochi. Furthermore, the majority of the facilities built for the 2004 Athens Olympics contributed to Greece’s financial crisis and are now vacant.

Olympic Cost Examples

The Olympics in Montreal in 1976

Montreal was experiencing a tremendous increase in its worldwide reputation at the time of the event. The games helped to convert the city into a world-renowned destination in conjunction with the Expo ’67 World Fair, which was hosted to commemorate the nation’s centennial. The governing body quickly ran into fiscal problems, as its predicted expenses of $360 million fell well short of the ultimate $1.6 billion figure.

The Montreal Games ended up leaving the city with a 30-year debt and financial catastrophe, with the deteriorating, custom-built venues remaining a desolate sight for decades.

Athens 2004 Olympic Games

Some experts attribute Greece’s current economic troubles on the 2004 Olympics in Athens. The event represents extravagant and reckless expenditure. To begin with, the entire cost—estimated at $15 billion—far above the initial projected figure; although, to be fair, the increase was caused in part by extra security expenditures paid in the wake of 9/11. (which were unforeseen when Greece bid for the games in 1997).

While this is acceptable, the construction of superfluous and ill-conceived permanent athletic arenas was difficult to grasp. A handful of these places are still inactive to this day. This lack of vision and preparation left the country with a gap of 50,000 euros per Greek family, which has subsequently been borne by taxpayers.

Rio de Janeiro will host the 2016 Summer Olympics.

Many competitors withdrew from the 2016 Olympics due to health worries about the Zika virus, which was spreading in Brazil, and many fans did not visit the nation. Despite the fact that the Brazilian government deployed 2,000 healthcare specialists to assist during the Olympics, the country’s fiscal problems placed extra burden on the healthcare system. Furthermore, experts discovered that the water utilized for boating and swimming activities was tainted with raw sewage and “super germs,” raising further worries about public health. Before the Olympics, Brazil had already lost an estimated $7 billion in tourism as a result of the Zika virus.

The Brazilian government spent around $13.1 billion to host the 2016 Olympics ($3.5 billion over budget), plus an extra $8.2 billion in infrastructure enhancements and renovations paid for using a combination of public and private funds. The anticipated economic advantage of hosting the Olympics did not materialize in Rio de Janeiro. According to The Associated Press, the city is behind in paying teachers, medical staff, and pensioners, and violence has reached near-record levels.

Tokyo will host the Olympics in 2020 (2021).

Japan won the 2020 Olympics with a $12 billion offer, beating out competitor Italy for the hosting berth. Then, in the spring of 2020, the COVID-19 epidemic struck, and the Olympics were postponed until the summer of 2021. The delay adds $2.8 billion to the overall cost, which is expected to be more than $15 billion—the most costly Olympics ever conducted.

When the year 2021 saw an increase of COVID-19 in many regions of the globe, including Japan, the decision was taken to prohibit spectators. Without fans, overseas tourism will not provide the necessary revenue to cover the expenditures made by the Japanese government. While the economic costs will be significant, the health costs may be far greater. As of Aug. 9, 2021, the day after the closing ceremonies, 436 people (including athletes) have tested positive with COVID-19, according to Tokyo officials. It remains to be seen what effect these figures will have on Tokyo’s health and economy.

In conclusion

Cities that host the Olympics often suffer from serious economic problems. Unless a city already has the infrastructure in place to accommodate the influx of visitors, not hosting the Olympics may be the best choice.


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