olympics increase tourism

Japan’s Tourism Reality From Olympics: Build It and Maybe They Will Come Later

Lebawit Lily Girma, Skift

July 19th, 2021 at 2:00 AM EDT

The 2020 Tokyo Games will be a big financial hit for Japan's tourism sector, but vaccines now under way plus pent-up demand and infrastructure boosts could make it come out of this tough stretch a winner — sooner than one might think.

The postponement by Japan of the 2020 Tokyo Olympic Games to this summer came as a hard blow for its pandemic-hit tourism industry. Since that announcement, Covid outbreaks and inconsistent global travel rules, not to mention a surprisingly low vaccination rate for the country, at 21 percent, cast doubts that the Games would even be held.

Still, the Games will go on. As the Tokyo prepares to kick off on Friday with the opening ceremonies, amid the country’s fourth state of emergency, the ban on tourist and local crowds at the mega event could result in the biggest hit yet to Japan’s travel economy.

Yet, the government remains steadfast, keeping its target of 60 million visitors and $136 billion in tourism revenue by 2030 , while staying hopeful for an international audience this year, even if nowhere near pre-Covid levels that saw record tourism for seven straight years. Still, the long-term economic boost from hosting well-attended Olympics has been elusive over the years. That could create a hiccup to Japan’s tourism progress that may takes years to regain.

“With or without the Olympics, already the tourism sector is depressed from April last year,” said Sayuri Shirai, professor of economics at Keio University and former Bank of Japan policy board member.

Accommodations, attractions, and commercial centers, among others, had embarked on a frenzy of investments and loans as early as 2013 in anticipation of the Games and international visitors.

“Now we have zero audience and they still counted on this small audience but all those are gone, so we might start to see an increasing number of bankruptcies,” said Shirai.

Despite the financial loss from the Games, will the infrastructure investments made in preparation boost Japan’s tourism industry post-pandemic ?

It may only see $1 billion, or maybe $2 billion, of general infrastructure investment facilitating not only tourism but other elements of its economy, according to Andrew Zimbalist, professor of economics at Smith College and a leading global expert in the business of sports.

“But if you spend $35 billion, and you get infrastructural improvements that are valuable that amount to $1 billion or $2 billion, that’s not a very good economic calculus, right?”

For Japan’s tourism leaders, the infrastructure gains still outweigh the negatives.

“Compared to before, Japan now offers more extensive free Wi-Fi, more infrastructure supported with multilingual signage, and increased deployment of universal designs for those with disabilities,” said Michiaki Yamada, executive director of the Japan National Tourism Organization’s New York office since May.

“We are confident that these many investments will enable inbound tourists to enjoy visiting Japan more than ever, and will also draw them back again and again for many years to come.”

For Kei Shibata, co-founder of online travel company TRAVEL jp , the aforementioned investment geared towards “foreigner friendliness” is more powerful and will make Japan more competitive post-pandemic, particularly for international meetings and events on the scale of those hosted in Singapore.

Beyond the Olympics’ losses, there’s a bigger picture when it comes to the promise of travel rebounding in Japan, Shibata said — and that’s the government’s steadfast commitment to make tourism a major economic driver on par with exports.

“Japan has a structural problem as a country, which is a decreasing, aging population — that’s one of the biggest reasons why this country’s actually pushing inbound tourism, because it’s one of the very few growing industries. If Japan can reach the 2030 target, tourism will exceed the automobile export industry.”

An Oversupply Problem

Prior to Covid, Japan’s tourism sector enjoyed a seven-year success streak, with the number of tourists increasing steadily, reaching 31.8 million visitors in 2019 . According to the World Tourism and Travel Council , that resulted in $49 billion in visitor spend and tourism made up 8.5 percent of Japan’s total employment.

Shira said this success was in some part attributable to the naming of Tokyo in 2012 as a host for the 2020 Games.

“It’s a combination of the Tokyo Olympics story, and because the Bank of Japan started to do monetary policy easing, so the interest declined significantly and that also contributed to the construction and real estate boom.”

That monetary easing policy led to a significant depreciation of the yen against the U.S. dollar, making it much cheaper for tourists to visit Japan. “It became a very big discount for many tourists. That’s why they started to come to Tokyo.”

Last summer’s “Go To Travel” incentive campaign from the Japan Tourism Agency created demand for the domestic tourism sector to the tune of $9 billion in revenue , but it was short-lived because of the subsequent surge in variant cases.

Shirai said that Japan’s government has supported the tourism sector through Covid with cash and subsidies for wages and rent, as well as discounted loans.

The concern now was the over-supply in hotels and real estate created as a result of the Tokyo Games.

“Before the Olympics, the total number of hotels and small inns within Tokyo was about 1,800. Now it’s double that. It means over the 7 years, there are lots of new hotels, lots of new commercial shopping centers, many facilities created and of course those were created by having debt. That is a problem.”

Shibata said that the main infrastructure benefit to have out of the Tokyo Games is the expansion of the international terminal at Haneda, which will open the door to more market share, and allow future tourists to land in the heart of Tokyo.

All others are inconsequential, experts agreed, given Japan is a mature destination.

Masashi Imai, director of marketing at Tokyo Convention & Visitors Bureau , said that the “soft power” resulting from the mega event was equally important.

“In order to welcome people from all over the world on the occasion of the Olympics, many people, including young people, elderly people, students, and volunteers, are involved in the preparations. This will be an asset to the city in the future.”

Proving the overall benefits of hosting the Olympics for tourism is difficult, said Smith College’s Zimbalist.

“The argument’s often that by hosting the Olympics you put yourself on the world stage, and that promotes your city, and makes people want to travel there, people want to trade with you more — there’s simply no evidence that that happens,” said Zimbalist.

For now, Japan’s tourism board is focused on maximizing the three-week broadcast and online coverage of the Tokyo Games.

“We plan to seize this opportunity to showcase Japan and its many attractions, and thereby encourage people to start dreaming about future trips to Japan once the travel restrictions are lifted and it becomes safe to enjoy traveling to Japan again,” said Yamada.

A Ray of Hope: Vaccines and Japan’s Brand

In spite of the disappointing outcome of a visitor-free Olympic Games, there’s good news for Japan’s tourism industry: vaccinations are advancing rapidly, after an earlier botched plan.

“Every day I hear 1.2 to 1.4 million jabs are executed now,” said Travel Japan’s Shibata. “Many experts are saying that by Q4, Japan will get through to the mark with 60-70 percent of fully vaccinated population, so we think that towards the end of the year domestic tourism will be recovered to some degree.”

Data analytics and consulting firm Global Data predicts pre-pandemic domestic tourism levels will return in 2022 and inbound visitors will reach pre-pandemic levels by 2024.

Japan National Tourism Organization’s Yamada said the government still believes its 2030 inbound tourism targets are reachable and that the organization was currently developing both worldwide and market-specific strategies to achieve those goals.

“In the U.S. market, we will promote unique Japan experiences that are worth the wait. We will continue to promote Japan as an ideal travel destination once travel restrictions are lifted.”

Cultural differences, however, may also dictate locals’ sentiment on domestic or international travel, according to Keio University’s Shirai.

“Japanese worry about this, getting infected from foreigners,” said Shirai. “You know, when I look at TV and what’s happening in Europe, U.S. many people are trying to go on vacation and they’re more optimistic. But Japanese are more cautious people.”

The pent-up interest in Japan as a tourist destination signals another potential bright spot.

“Long-term, fundamentally I’m quite optimistic about Japan as a destination,” Shibata said, adding the government’s target of 60 million inbound tourists can be met, given Japan’s unique natural and cultural assets.

“Inside Asia and also outside Asia, a lot of people tell me if the borders are open, I want to actually go to Japan first, or I want to actually work there. There is great interest about Japan.”

In the shorter run, Shibata said, there are a lot of uncertainties — including when China would reopen, one of Japan’s former primary source markets, and the issue of lower efficiency of China’s Covid vaccines.

But the work continues for Tokyo’s tourism board.

“In order to recover the number of tourists that dropped significantly during Covid-19, we will continue to conduct PR activities for overseas markets such as Europe, the United States, Australia, and Asia,” said Imai. “We will also work to create business opportunities for the tourism industry in Tokyo.”

The focus going forward, Imai added, would be not just on quantity but also quality.

“In this moment, many people perceive to learn or do something good by even travel. Tokyo, where tradition and technology are well harmonized and generate new things every day, will offer and provide vivid information by introducing a variety of experiences to fulfill their demand.”

As far as the concept of the Olympic Games benefiting tourism long-term, Japan’s current scenario has proven the risk that lies for mature destinations, Zimbalist said, adding that more countries in recent years have been avoiding bidding to become a host.

“I think that we’ve hit a turning point and Tokyo just emphasizes or accentuates that turning point.”

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Tags: asia , coronavirus , coronavirus recovery , japan , tokyo olympics

Photo credit: Spectator stands will be empty at the 2020 Tokyo Games and leave tourism reeling, but Tokyo's long-term commitment to the industry will eventually pay off. Courtesy of Japan Online Media Center / Japan National Tourism Organization

Boston 2024 has told us that hosting the Olympics would “put Boston on the map.” However, Boston is already on the map . Boston ranks seventh in the US in terms of international overnight visitors and international overnight visitor spending. During the summer months, Boston and Cambridge hotels are at near full capacity.

Tourism plays an important role in Boston’s economy. With the rich history evinced by our 58 national historic landmarks and enviable museums, it’s easy to see why. However, when a city hosts the Olympics, tourists turn the other way in order to avoid the congestion, and the sports tourists who come only for the Olympics aren’t coming to explore the cultural offerings of the city.

Olympic boosters often argue that hosting the Olympics increases tourism. Boston 2024 representatives regularly claim that the London 2012 Games—and not, say, a weak pound —were responsible for the increase in tourism in 2013. However, research doesn’t bear out such predictions of Olympic-sized gains.

London 2012

Jamie Elliott, “Olympic bargains galore as London's theatres and hotels slash rates,” The Guardian , July 7, 2012, http://www.theguardian.com/uk/2012/jul/07/olympics-london-hotels-slash-prices .

“Hotel bookings in the capital are down 35% in July and 30% in August, according to the latest published figures from hotel room wholesaler JacTravel, which books half a million London bed nights a year.”

“Rooms in central hotels can be obtained for as much as 30% below the usual rates and tickets for some West End hits are being offered at half price.”

“A survey by the European Tour Operators' Association last November showed that advance bookings for the Olympics period were down 90% compared with last year.”

“The cost of seeing a London show in July and August has also fallen, as theatre seat bookings have slumped by 20% or more, according to Chris Ryan, director of marketing for Encore Tickets, which sells two million West End theatre tickets a year.”

Peter Woodman, “London Tourism Struggles During Olympics,” The Independent , July 31, 2012, http://www.independent.co.uk/news/uk/home-news/london-tourism-struggles-during-olympics-7994159.html .

“London's tourism industry is struggling to compete with the impact of the Olympic Games, which has left the host city a ‘ghost town,’ businesses said today.”

Mark Rubinstein, president of the Society of London Theatre: “Normally tourists will visit central London but they are mostly here to see the Games.

Sri Balay, online sales manager at Leicester Square Box Office: “Theatre in general is pretty quiet. We have a lot of visitors going past but they are going to Olympic events or spending a lot on hotels.”

Steve McNamara, general secretary of the Licensed Taxi Drivers Association: “Anecdotally our business is down by about 20-40 per cent depending on the time of day.”

A spokeswoman for the British Museum: “Anecdotally at the moment, it is looking like we are about 25-30 per cent down on the same time last year.”

Christopher Woodward, director of the Garden Museum: “The positive has been that visitors have been very happy but the negative has been that we have been hit by the loss of wedding receptions which is a major source of income to the museum.”

Shawn Pogatchink, “Trade Body Says UK Tourism Slumped During Olympics,” Associated Press , August 13, 2012, http://bigstory.ap.org/article/trade-body-says-uk-tourism-slumped-during-olympics .

“A survey of more than 250 tour operators, hoteliers and visitor attractions found that tourist traffic fell all over Britain, not just London, said UKinbound, a leading trade association representing British tour operators and other businesses dependent on tourists.”

“The group's survey said that of its members, 88 percent reported some losses during the games compared to the same period last year. The businesses reported that visitor numbers were down by 10 to 30 percent compared to last year, Rance said.”

Miles Quest, spokesman for the British Hospitality Association: "The people who came to the games really didn't do very much sightseeing, didn't do very much shopping, didn't do very much eating out…London's hotels have hit about 80 percent occupancy, which is not higher than typical August rates.”

Rebecca Smithers, “UK Tourist Attractions Suffer Plunge in Visitor Numbers,” The Guardian , October 8, 2012, http://www.theguardian.com/business/2012/oct/09/uk-tourist-attractions-plunge-visitor .

“Some major London attractions hosted 60% fewer visitors during the two weeks of the Games, the Association of Leading Visitor Attractions (Alva) said, while many further afield suffered one of the worst trading periods since foot and mouth disease gripped the British countryside in 2001.”

“Overall, those [attractions] in London saw an average decrease of 15% in visitor numbers in May-August compared with the same period last year.”

“In the capital, gardens and outdoor attractions suffered the largest single decrease of 21.3% in visitor numbers, as heavy rainfall made visitors turn their backs on normally popular destinations such as London Zoo (run by the Zoological Society of London) and the Royal Botanic Gardens.”

“But heritage sites and cathedrals – including the Tower of London, St Paul's Cathedral and the Houses of Parliament – were also casualties, with visitors numbers slumping by 20.3% and retail and catering spending by 20.2% and 8.6%. Visitor numbers to museums and galleries in London fell by 13.1%.”

Vancouver 2010

Mark Shaffer, “Looking Back on the Vancouver-Whistler Winter Games,” Policy Note , February 6, 2014, http://www.policynote.ca/looking-back-on-the-vancouver-whistler-winter-games/ .

“As for tourism, the incremental effect of the Games was minimal, contributing very little to GDP or employment. There were many reasons for this including the financial crisis of 2008, a strong Canadian dollar and what some suggest was a failed marketing campaign. Regardless, as compared to the pre-Games forecast of 40,000 to 56, 000 person years of tourism-related employment due to the Games (with the government of course touting the high end of that range), PWC estimated the total tourist industry impact at less than 10,000 person years of employment.”

“No Post-Olympics Tourist Bump in Sight for B.C.,” The Globe and Mail , October 25, 2011, http://www.theglobeandmail.com/news/british-columbia/no-post-olympics-tourist-bump-in-sight-for-bc/article559092/ .

“For the first eight months of 2011, the number of overnight international visitors to the province was actually down by more than 200,000, compared with a similar period for 2009, the year before the Olympics.”

Beijing 2008

Anita Chang, “Despite Olympics, China Sees Drop in Visitors in 2008,” USA Today, January 8, 2009, http://usatoday30.usatoday.com/travel/destinations/2009-01-08-china-visitors_N.htm .

“The number of travelers to China dropped by 2 million in 2008 in what was supposed to be a banner year for tourism but became one dampened by Olympics-related security measures and the global economic crunch.”

Sampling of Scholarly Work

Heather Mitchell and Mark Fergusson Stewart, "What Should You Pay to Host a Party? An Economic Analysis of Hosting Sports Mega-Events," Applied Economics 47, no. 15 (January 2015): 1550-1561, http://www.tandfonline.com/doi/full/10.1080/00036846.2014.1000522#abstract .

Abstract : Governments all over the world put huge amounts of money into bidding for, and then hosting, sports events like Football’s World Cup or the Olympic Games. They also give money to professional sports teams and other mega-events to encourage them to locate within a particular constituency. This article examines the statistical relationship between tourism and three Football World Cups and five Olympic Games, finding very little positive effect. Given this conclusion, the article looks at why governments continue to bid for these competitions. It presents evidence that shows that these sports contests make people happy, and argues that politicians capitalize on this feel-good factor; harnessing the hubris associated with these events for political gain. The article then contends that the best way to reduce the politics associated with bidding for mega-events is to allocate them via an auction, rather than the wasteful rent-seeking methods that are currently used.

Kathleen Gruben, Steven Moss, and Janet Moss, “Do the Olympics Create Sustained Increases in International Tourism?” Journal of International Business Research 11, no. 1 (January 2012), https://www.questia.com/library/journal/1P3-2750829401/do-the-olympics-create-sustained-increases-in-international .

Abstract : The purpose of this study is to examine international tourism as a legacy of the hosting the Olympics. Sustained tourism after the Olympics is hypothesized to be a result of the massive media coverage of the event and the host city. The media exposure is thought to create a positive image of the host city and generate international tourism. The largest media market for the Olympics is the US. In this study air passenger traffic from the US to eight Olympic host cities is analyzed pre and post event. Time series models are used to forecast the trend in US air passengers to each city. Tests for increases in passenger volume during and post Olympics are performed. The results show no sustained increase in international tourism from the US to the host city in the post Olympic period.

Mike Weed, Dikaia Chatziefstathiou, Suzanne Dowse, Louise Mansfield, and Ian Wellard, Understanding Olympic Tourism Flows (Canterbury, UK: Canterbury Christ Church University, 2012), https://radar.brookes.ac.uk/radar/items/948e3936-292c-629d-05a5-33ded81616b5/1/ .

“The Olympic and Paralympic Games undoubtedly have an impact on tourism, and the positive impacts in the host city can be significant. However, SPEAR’s research into the measurement of Olympic tourism flows shows that claims about Olympic tourism are usually pre-Games predictions rather than post –Games evaluations. It also shows that negative effects, such as people staying away from the host city because they think the Games will make it too busy and too expensive, or the possibility that the host city will draw tourism flows away from the rest of the host country, are rarely accounted for. Finally, Olympic tourism flows that have no additional impact, such as people deciding to travel to the host city during the Games as a replacement for a trip at another time, are often counted as positive impacts.”

Shina Li, Adam Blake, and Chris Cooper, “Modelling the Economic Impact on International Tourism on the Chinese Economy: A CGE Analysis of the 2008 Olympics,” Tourism Economics 17, no. 2 (April 2011): 279-303, http://www.ingentaconnect.com/content/ip/tec/2011/00000017/00000002/art00003 .

Abstract : International inbound tourism to China has grown phenomenally since 1980 and the hosting of the Olympics in 2008 was an important milestone. This paper takes the first step in applying computable general equilibrium (CGE) modelling to forecasting the economic contribution of tourism generated by the Beijing Olympics. CGE modelling has been widely applied to different tourism issues in many countries. In China, it has been used in fields such as taxation and international trade. However, economic impact studies on China's tourism using CGE modelling have not been found. The paper includes two types of estimations: ex ante and ex post. The ex ante estimation was conducted before the Beijing Olympics and thus predicted the impact of international tourism based on historical data, such as previous literature and historical statistics. The ex post estimation was conducted several months after the Beijing Olympics and the estimation was based on up-to-date statistics published by the China National Tourism Administration. The economic impact generated from the two types of estimations is compared. It was found that, while the economic impact of international tourism was predicted to be positive in the ex ante estimation, this impact was analysed as negative in the ex post estimation.

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An Olympic Impact on Sports Tourism: The Legacy for U.S. Host Cities

For los angeles, atlanta, salt lake city and lake placid, hosting the olympic games created exposure that still resonates.

With the Olympic and Paralympic Summer Games having concluded in Tokyo, one of many questions about the Games’ legacy is whether the city will be able to benefit from having hosted two of the world’s biggest sporting events—including the second time for the Olympic Games.

Without sports, Tokyo has more than enough to boast about as a tourist destination. But when it comes to benefits from investment in the Games, one immediate plus for when people travel more frequently again is that Haneda Airport now has an expanded terminal for international visitors and a new train line that will reduce congestion for Japanese residents.

“The positive aspects of Tokyo 2020’s tourism legacy will offer no quick fix for the amount of investment that will be lost due to no international visitation and restricted domestic visitation,” said Ralph Hollister , a travel and tourism analyst at GlobalData. “However, it offers benefits for Japan in the long-term, and will assist the nation by creating a more robust and varied tourism product for future years.”

Aside from infrastructure investments, the city may yet benefit from a sporting perspective. “When bidding for future events, Japan’s case will now be strengthened with these new facilities,” Hollister said.

Still, there are many other previous hosts that could have felt that way when the athletes left town and now, instead, have white elephant venues sitting unused with no international festivals or events on the schedule.

For the four U.S. markets that have hosted either the Olympic Summer or Winter Games in modern history, what happened after the Games were gone have provided a variety of lessons. From establishing legacies to expanding their sporting reputations, each destination is still able to capitalize on the status of having hosted the world.

Leaving a Legacy While Looking to Future

When Los Angeles hosts the 2028 Olympic Summer Games, it will join Paris and London as the only cities to have hosted three times. But Los Angeles remains the standout among perhaps any Olympic Summer Games host not only for what it did in 1984 in delivering record profits and bringing commercialism to the Games for the first time, but what it has done afterward with LA84 Foundation — a nonprofit institution created to manage Southern California’s endowment from the 1984 Olympic Games that at the time was groundbreaking in its inception.

“It’s such a great story,” said Kathyrn Schloessman , president and chief executive officer of the Los Angeles Sports and Entertainment Commission . “It’s a story for us in telling what major events do for a city and we can point to a specific example. … I think (LA84) sets the bar pretty high on the expectations for what needs to be delivered after a major event. You’re talking about a $160 million surplus from those Games that is still alive and well and being invested in youth sports in our community almost 40 years later.”

Between so many of the 1984 venues still in use and plenty of new venues in the competitive Los Angeles market, the 2028 Games will in many ways be the crowning summer of a run of major events in the city that few destinations could dream of hosting. Los Angeles is scheduled to host the 2022 Super Bowl, the 2023 College Football Playoff championship game, 2023 WrestleMania and is expected to be one of the host cities for the 2026 FIFA World Cup.

“What we’ve been telling everybody as we’ve been coming out of this pandemic the past few months, this run that we have during a six-year period is an incredible opportunity to showcase our city in a time where it’s so important to be able to do that, now more than ever because of what (COVID) did to the hospitality industry,” Schloessman said. “Having the Olympics to look forward to is such a great, ultimate North Star at the end of this whole thing to build toward. The Olympics are No. 1 in the world in terms of visibility. Being a future Olympic host city in 2028, it’s giving us a media platform. It just adds a level of excitement about our city.”

The Start of a Big-Event Run

When Atlanta won the bid to host the centennial 1996 Olympic Summer Games , it put the city on a bigger stage than ever before.

“It was the beginning of our buildup as a big sports-event hosting destination,” said Atlanta Sports Council President Dan Corso . “It paved the way to showing that our city and our state was capable of, and putting on an event of that size gave us the confidence that we could do anything.”

Four years after hosting the Games, the Super Bowl came to town. The city has since become home for the Southeastern Conference football championship game, the 2020 Super Bowl and three NCAA Men’s Final Fours, plus one NCAA Women’s Final Four.

“I think coming off the momentum of the Olympics helped in those bids,” Corso said. “Twenty-five years removed from it, it’s certainly part of our narrative as for our event hosting experience.”

Corso also said the Games’ legacy continues in every major event the city hosts in another way; there are volunteers that first helped at the 1996 Games that still help at major events. Multiple venues are still in use, including the Centennial Olympic Park that Corso is able to see every day from his office downtown.

“I’m seeing people walking around and taking photos of the (Olympic) rings right now,” he said earlier this summer. “We hold public fan fests and concerts in that venue when we host the Super Bowl or Final Four. It’s part of our pitch for the FIFA World Cup to use that location as our fan festival site. Centennial Olympic Park is really that epicenter of our downtown championship campus and is utilized on a daily basis.”

Memories of the 1996 Games were even stronger this year as the 25th anniversary came around. Atlanta’s Games were marred by a domestic terrorism event in the Centennial Olympic Park but may now be known as much for the groundbreaking success of U.S. women’s athletes in both team and individual sports.

“It’s part of our history,” Corso said. “We had the 2003 Women’s Final Four, we’ve had a women’s professional soccer team, we’re now home to the (WNBA’s) Atlanta Dream and have multiple colleges and universities and HBCUs surrounding metro Atlanta that put an emphasis on women’s sports. That’s part of our lasting legacy of the ’96 Games.”

Expanding Into Year-Round Hosting

The 2002 Olympic Winter Games has been called by many around Salt Lake City as the region’s coming-out party on the world stage. Since that moment nearly 20 years ago, the region has continued to be a winter sports haven with U.S. Ski & Snowboard now located in Park City and international events regularly held in Park City and speedskating events at the Olympic Oval in Kearns.

The bigger boost the state has gotten, said Utah Sports Commission President Jeff Robbins , has been the impetus to make the region into a year-round sports destination. Robbins said the commission has helped attract about 900 events since the 2002 Games — about 250 of them being Olympic-related events but many others in sports such as soccer, volleyball, climbing and weightlifting.

“Since the Games, we’ve evolved and made a name for ourselves,” Robbins said. “We’ll always be known as a Winter Olympic host but we’ve had a lot of success in evolving into a year-round sports destination.”

The region has been able to bring in events not only because of Rice-Eccles Stadium, site of the Opening and Closing Ceremonies that has since been a regular stop for motocross events, but everything from major international soccer at Rio Tinto Stadium to the new skatepark at the state fairgrounds, which opened in late August with the Street League Skateboarding tour as well as the inaugural Tony Hawk Vert Alert.

“Having that platform gives you the ability to go out in the marketplace and it gives you a certain level of credibility,” Robbins said. “We’ve done so many different things in the marketplace since that we have a reputation now not just from the Olympics, but for everything else we’ve been doing. … It used to be that the Olympics was the piece. Now, the Olympics are a piece of the sports infrastructure here.”

And, potentially, the Olympics will be part of Salt Lake’s future as the city is seeking to host again in 2030 or 2034.

No Miracle That They Still Remember

In terms of pure sporting memories, there may be no more famous Olympics in U.S. history than the 1980 Winter Games in Lake Placid, New York, thanks to the “Miracle on Ice.”

And still 40-plus years later, the Lake Placid Convention & Visitors Bureau’s venue tracking shows that the Games remain a top reason tourists visit — to step into the arena where the U.S. beat the Soviet Union: “The association with the Olympic Games, it’s ongoing and it’s continual,” said CVB President and Chief Executive Officer Jim McKenna .

Lake Placid is also preparing to host the 2023 World University Winter Games , which will bring 1,600 athletes from around the world. As part of the preparations, U.S. athletes in luge, bobsled and skeleton can take advantage of a new ice house at Mount Van Hoevenberg and the speedskating rink is getting a complete makeover.

“If we didn’t have the 1980 Olympics, we probably wouldn’t have the World University Games in 2023,” McKenna said. “It was identified as a realistic multi-sport winter event that we could host and it would allow us to really look at our sports venues, bring them up to and beyond international standards, and be a catalyst for community housing and community infrastructure.”

Lake Placid has also gotten invaluable networking and information through the World Union of Olympic Cities, which is based in Lausanne, Switzerland, “where the community of Lake Placid with a population of 8,000 can be in the same conversation with London,” McKenna said. Being part of the group helped Lake Placid focus the past three years on revitalizing the existing 1980 venues with just under $500 million invested by New York state. A recent tour of the sliding, biathlon and skiing areas left International Bobsled and Skeleton Federation President Ivo Ferriani and USA Biathlon Chief Executive Officer Max Cobb wowed, McKenna said.

“Our door is being knocked on for all the winter sports now,” McKenna said. “The Olympic legacy as a winter sports destination has allowed us to position ourselves not only currently for success in the world of winter sports competition but more importantly in the future.”

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Tokyo Olympics 2021: What Will Be the Lasting Impacts?

David Maurrasse

The latest version of the Olympic Games are upon us, and once again, it is time to review the value of major international sporting events to local communities. Cities across the world continue to present elaborate bids, hoping to secure these substantial experiences that require tremendous local investment in venues, transportation, housing, and other resources. For generations, many have wondered about the meaning and value of such spending. What are the lasting benefits of Olympic games to cities? Do Olympic games tend to benefit local populations, especially lower income constituencies? Do they improve environmental sustainability? Do they expand opportunities in employment, education, and housing?

The Tokyo Games provide an intriguing case regarding the local population. After all, these games are taking place in the midst of the COVID-19 pandemic. The running, swimming, jumping, twisting, and all manner of physical feats will take place without fans. This will certainly dramatically reduce local revenue in the shorter term. But even holding the event is questionable given strikingly low vaccination rates in Japan. At the beginning of the month, only 12.65% of Japan’s population was fully vaccinated against COVID, as compared to more than 40% in places like the U.S. and U.K.

The 2021 games are no ordinary example of the Olympics. Nevertheless, it is still worth taking a fresh look at the idea of major international sporting events as engines of community and economic development. Are they worth the effort for local communities? Particularly bringing an equity lens to these circumstances, do these events tend to reduce inequities and expand opportunities, or do they exacerbate existing disparities? It is one thing to attract capital by harnessing these events. Ensuring that this capital is distributed and applied to populations that could most benefit from these resources is an entirely different proposition.

Over recent decades, the International Olympic Committee (IOC) has begun to grapple with some of these dynamics. International sporting events have been encouraged by the United Nations to align with the Sustainable Development Goals (SDGs). In 2015, the UN General Assembly mentioned the important role that sports play in supporting the UN 2030 Agenda for Sustainable Development and the 17 SDGs. The Olympic Movement has core missions closely aligned with many SDGs.

A December 2017 IOC report addressed concerns about the lasting legacy of Olympic Games. The report outlines an approach that includes considering and documenting the games’ long-term impacts. These objectives underscore, at least rhetorically, the IOC’s commitment to ensuring games contribute substantially to local communities well beyond their occurrence, which is considered in the selection process. Consequently, cities hosting contemporary games were required to propose a lasting legacy. Ostensibly, Olympic Games will increasingly be expected to deliver on promises. Will they succeed? Will they be held accountable if they do not?

For the most part, cities have experienced various challenges with ensuring a lasting legacy from these events. First of all, Olympic Games typically require numerous new facilities — housing apartments, sporting arenas and tracks, exercise areas and equipment. These structures leave cities with additional infrastructure that can be costly to maintain and lacks long-term value. Secondly, the economic impact from these events tends to be concentrated in the particular geographic areas in the immediate vicinity of the Olympic Park. These are often areas that are relatively inaccessible. Third, environmental regulations instituted in order to ensure a healthy and clean environment for the Games are often terminated after the event, leaving no lasting impact. Additionally, Olympic Park spaces require significant reconfiguration in order to be useful under normal circumstances. They also require new forms of public transportation to be accessible on some regular basis. Considering equity, these challenges are even more complex.

Some relatively recent examples of Olympic Games have promised lasting local benefits, and attempted to deliver them.

2016 Rio Olympic Games

Like the Tokyo Games, the Rio Olympics took place under a cloud of controversy and intense scrutiny over health and safety. These Games were rather costly at somewhere in the range of $13 billion USD. They promised tourism as a pathway to short-term job creation. As in the case of other Games, Rio accelerated various infrastructure investments around an Olympic Village, including 31 residential buildings with 3,604 apartments sold after the event. A recreational park, City of Rock, was created as well. But, here again, these structures are concentrated in a particular region that does not reach most local citizens. The tourism stimulated by the event actually revealed existing capacity and municipal management limitations.

The Organizing Committee of the Rio Olympic Games implemented a sustainable development plan to look at the environmental impacts of the Games on the host community. Medals distributed during the Games were made of recycled materials, and a Solar City Tower supplied energy to part of the city and the Olympic Village. However, the Games produced roughly 3.6 million metric tons of carbon, related to road and building construction along with emissions from air travel and shuttles between airports, stadiums, and hotels.

The Games provided an opportunity for Brazilians to share and gather, strengthening a sense of community. Crianca Global, a new government program, was created to expand educational opportunities for children and youth, requiring public schools to teach English as a second language. This program led to the hiring and training of 350 new teachers in 2014, which impacted 100,000 primary schoolchildren. Nineteen towns received funds from the program in 2016.

Despite this program with direct educational impact on local children, the Games encountered significant opposition, including widespread public demonstrations in 2014. The Organizing Committee rented or sold Olympic Village apartments at unaffordable prices. The Village was built on the site of the favelas , forcing the relocation of low income families. Additionally, the activity surrounding the games led to an increase in drug trafficking and the availability of drugs.

2012 London Olympic Games

The London Games were held in a historically lower income community in East London. Included in London’s proposal to the IOC was a commitment to transform this local community . Their Olympic Park was created on a site that was largely polluted and inaccessible, which was acquired through a program of land acquisition, remediation, and development. The transformation began with the remediation and clean-up of 2.5 kilometers of brownfield land. Six permanent sporting venues were developed. In 2013, after the Games, responsibility for the transformation of the Olympic Park was transferred to the London Legacy Development Corporation. The corporation’s work included transforming Olympic facilities into nearly 10,000 new homes, two primary schools, a secondary school, nine nurseries, three health centers, and a number of multi-purpose community, leisure, and cultural spaces.

The Games also resulted in some expansion of public transportation, including a project to double the capacity of a local train station (Stratford Station), upgrades to the Dockland Light Railway, and upgrades to the North London Line. Various local development projects were either accelerated or expanded, including the improvement of Hackney Wick and Fish Island, Greenwich Riverside and Town Center, and Stratford Center. Here again, we find some development stimulated by Olympics, but in a limited geographic area, as these projects are in the vicinity of the Olympic Park in Stratford.

While the intention to improve an area that has been relatively underserved is certainly noble, a 2017 report released by the London Assembly’s Regeneration Committee asserts that the gap in many quality of life indicators — including housing, health, and life expectancy — between the six host boroughs in East London and the rest of London has not been closed, and the earnings gap in 2015 was greater than it was in 2009, before the Games. Other key areas such as unemployment and income levels seem to have annual fluctuations but with little signs of consistent or permanent improvement. Nevertheless, educational targets for these boroughs have been achieved; whether the Games were a factor or not is unknown. Overall, the changes in East London may have been accelerated temporarily by hosting the Games, but long-term improvements are not likely.

Tokyo has proposed various approaches with respect to the environment, education, employment, and other areas .

The Games’ approach to venues has been a central aspect of their intended environmental legacy. They are making greater use of existing venues than some other Olympic Games, rather than building anew — 58% of venues are existing competition sites. The organizing committee is promoting the use of public transportation and fuel cell electric vehicles with a low environmental impact. They are making use of recycled materials in venues.

Also with respect to environmentally sustainable practices, various citizen CO2 reduction campaigns are connected to the Games. The Games have been collaborating with Tokyo Metropolitan Government’s Bureau of Environment on a range of strategies. Attention to the natural environment and biodiversity are also included. The venues are conserving water through rainwater harvesting and recycling. They have been retaining existing trees and protecting wildlife habits in the design and construction of venues.

Citizen engagement has been incorporated into the approach with projects such as Tokyo 2020 Nationwide Participation, a volunteer initiative to maximize the Games’ impact. They have engaged sponsors in dialogue about sustainability matters through the Sponsors Sustainability Network, created in 2017. Fifty-one companies were involved in this effort as of January 2020. The Games have also been considering human rights, labor, and fair business practices, including spreading diversity and inclusion and working to ensure accessibility through mobility support, information accessibility, and venue facilities development.

In education, as of April 2017, the Tokyo Organizing Committee launched a national education program (Yoi Don – Get Set) to promote the values of the Olympic and Paralympic Games to schoolchildren across Japan. Schools using these materials will receive special certification. This strategy includes dispersal of math textbooks to more than 100,000 students at public elementary schools in Tokyo. These textbooks aim to help students with mathematics through problems that involve Japanese athletes and sporting bodies.

CISCO Information Security Education includes a partnership with Cisco to provide training in information security. The “Cyber Security Scholarship Program” is open to students and adults seeking to become specialists in cyber security. This effort, which includes cooperation with local governments and educational institutions, is certified as a part of the “Tokyo 2020 Participation Program”.

In 2017, the Tokyo Metropolitan Government calculated the estimated economic and other effects associated with holding the Tokyo Games. Regarding employment, the government estimated that approximately 1.3 million people across Tokyo and 1.94 million people across Japan would be employed by the Games, including throughout the process of preparing for and holding the games, and employment opportunities continuing after the Games were held. While these estimations were made before the impacts of COVID-19 were a consideration, they indicate how Tokyo as the host city expected to gain lasting employment opportunities through the Games.

Regarding culture, the Japanese government started the “Beyond2020” program in 2017 to promote activities that highlight the rich and diverse regional cultures of the country. The “Beyond2020” program authenticated 8,593 projects from its inception in 2017 until the end of 2018.

Overall, the Tokyo strategy, while including numerous categories in which they hope to leave a lasting legacy, lacks a comprehensive community and economic development agenda. It does not appear to prioritize equity or ensure that lower income populations benefit. Certainly, the COVID-19 pandemic may have seriously disrupted the potential impact of the Games. Without spectators, billions in revenue will be lost. The approach of these Games appears to be relatively surface level and short term.

In some ways, the public health context surrounding these games is an extreme challenge to the community benefits of Olympic Games. The local population overwhelmingly opposes holding the event given the continued spread of the virus. Now that numerous athletes are testing positive, some of the fears are being realized. Nevertheless, it appears the games will proceed.

It remains to be seen what the Olympics will catalyze for Tokyo populations in the coming years. But, reflections on the historical evolution of community and economic development via sporting events such as the Olympics provide us some considerations for the future. First of all, it is difficult to discern whether the IOC has effectively encouraged Olympic Games to leave a legacy that is truly transformative. Given the amount of time, energy, and resources invested in securing, holding, and leveraging the Games, it feels as if they should be held to a higher standard.

Even if a host committee promises a comprehensive and transformative strategy, what are the consequences for not following through? What is the role of the IOC in ensuring that Games benefit cities, particularly in an equitable manner? The overall approach of Olympic Games and other major international sporting events to host cities requires a fresh, critical look.

Furthermore, local populations should have a greater voice in shaping how the Games can strengthen benefits to host communities. Indeed, partnerships have been fundamental to organizing these multifaceted sporting experiences, but corporate sponsors and government officials are not the only partners to engage. Grassroots organizations that represent constituents that actually need an infusion of new resources bring a different point of view. Olympic Games should transcend strategies that merely generate revenue and other resources without attention to distributing them where they are needed most of all.

In addition to being a research scholar at Columbia University’s Earth Institute, David J. Maurrasse is the president and founder of Marga Inc., a consulting firm providing advice and research to strengthen philanthropy and innovative cross-sector partnerships to address some of today’s most pressing social concerns. He is the author of Philanthropy and Society and the soon to be published Strategic Community Partnerships, Philanthropy and Nongovernmental Organizations . He is also beginning research toward the production of another book, Community Partnerships Toward Sustainable and Equitable Communities.

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Expert Commentary

Olympics and their economic impact: Updated research roundup

In light of the 2016 Olympics in Rio de Janeiro, we update our review of studies relating to earlier games and their local and national economic impacts.

Republish this article

This work is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License .

by John Wihbey, The Journalist's Resource August 4, 2016

This <a target="_blank" href="https://journalistsresource.org/economics/economic-and-cultural-benefits-of-the-olympics-research-roundup/">article</a> first appeared on <a target="_blank" href="https://journalistsresource.org">The Journalist's Resource</a> and is republished here under a Creative Commons license.<img src="https://journalistsresource.org/wp-content/uploads/2020/11/cropped-jr-favicon-150x150.png" style="width:1em;height:1em;margin-left:10px;">

The Olympics are about competition and heroics and national pride. But they are also about big business. Host cities invest deeply in the games — the Sochi Winter Olympics, for example, cost over $50 billion — with the hope of reaping sizable gains for the local and national economy through tourism, marketing and other means. So what have we learned about hosting the Olympics and the proverbial “bottom line”?

Of course, it’s often hard to discern what the hard facts are amid all the hoopla around such global sporting mega-events. Long after the crowds vanish, it turns out that some host cities and countries ended up taking large net losses on their investments. Others have seen better outcomes; the 1984 Los Angeles Olympics are sometimes cited as a model of reasonable success. The consequences of the 2012 London Olympics continue to be analyzed; early U.K. government estimates suggest there was substantial benefit , though independent analyses urge caution, as conclusions are likely premature. Sochi was supposed to cost a mere $12 billion .

Scholars have long worked on models to estimate the benefits in advance (“ ex ante ” models) and how to properly capture all of the true returns over time after the events. It’s not an easy area of inquiry. There are “intangibles,” as some researchers point out , that need to be taken into consideration. As Vancouver found out when it hosted the 2010 winter games — and as Munich, Montreal and Moscow and others did before — estimates can be just that: a best guess, subject to the rough edges of reality. Even Beijing’s astonishing new building and infrastructure for the 2008 summer games hasn’t worn well ; and that’s a familiar fate in other host cities of bygone days. In any case, there are some good online resources that put such issues in broader research context; and some good analytical journalism — see The Economist ‘s reporting here , here and here , as well as this NPR piece and this Atlantic blog — can help inform coverage.

We’ve gathered studies that relate to economics and cost-benefit analysis. We’ve tried to include at least one on most modern games.

“Going for the Gold: The Economics of the Olympics” Baade, Robert A.; Matheson, Victor A. The Journal of Economic Perspectives , 2016. doi: 10.1257/jep.30.2.201.

Abstract: “In this paper, we explore the costs and benefits of hosting the Olympic Games. On the cost side, there are three major categories: general infrastructure such as transportation and housing to accommodate athletes and fans; specific sports infrastructure required for competition venues; and operational costs, including general administration as well as the opening and closing ceremony and security. Three major categories of benefits also exist: the short-run benefits of tourist spending during the Games; the long-run benefits or the “Olympic legacy” which might include improvements in infrastructure and increased trade, foreign investment, or tourism after the Games; and intangible benefits such as the “feel-good effect” or civic pride. Each of these costs and benefits will be addressed in turn, but the overwhelming conclusion is that in most cases the Olympics are a money-losing proposition for host cities; they result in positive net benefits only under very specific and unusual circumstances. Furthermore, the cost–benefit proposition is worse for cities in developing countries than for those in the industrialized world. In closing, we discuss why what looks like an increasingly poor investment decision on the part of cities still receives significant bidding interest and whether changes in the bidding process of the International Olympic Committee (IOC) will improve outcomes for potential hosts.”

“After Sochi 2014: costs and impacts of Russia’s Olympic Games” Müller, Martin. Eurasian Geography and Economics , 2015. doi: 10.1080/15387216.2015.1040432.

Abstract: “This paper assesses the outcomes of the 2014 Winter Olympic Games in Sochi, Russia, examining the costs and economic impacts of the event, the prospects for the long-term use of venues and infrastructure, and the attitudes of the global and the Russian population. Total costs were $55 billion, having increased 4.5 times from $12 billion at the time of the bid. Of this total, about $16 billion were sports-related costs. After accounting for inflation, this makes Sochi the second-most expensive Olympics ever in terms of sports-related costs and the most expensive Olympics in terms of cost per event. With a public share of 96.5 percent of funding, the Sochi Games had the highest proportion of public money for any Olympic Games on record. The benefit from this high cost, however, is limited. Extensive construction led to hotel overcapacities, investors defaulted on state-backed loans, and there is no coherent plan for the after use of venues and some of the largest infrastructure projects. As a consequence, the Sochi Olympics will continue to be a burden for the Russian state, with expenses for operation, maintenance, and foregone interest and tax revenue in the order of $1.2 billion per year. The event also did not manage to improve the image of Russia in the world. Among the domestic population, support dropped over the seven years of its implementation, most notably among the local population.”

“The Illusory Economic Gains from Hosting the Olympics World Cup” Zimbalist, Andrew. World Economics , 2015. ISSN: 1468-1838

Key Points: “Scholarly evidence suggests that hosting either the IOC’s Olympic Games or FIFA’s World Cup event is no economic bargain for the host city or country.  According to official reports, in London 2012, the city brought in around US$3.5 billion in revenues, and spent in excess US$18 billion – a negative balance of $14 billion plus.  Political systems in both democratic and authoritarian countries have shown themselves increasingly unwilling or unable to engage in effective long-term event planning.  Gains will be uneven as long as the monopoly structure of the auction of hosting rights to competing cities and countries from around the world remains in place. ”

“About Winning: The Political Economy of Awarding the World Cup and the Olympic Games” Szymanski, Stefan. SAIS Review , Winter-Spring 2011, Vol. 31, No. 1, 87-97, doi: 10.1353/sais.2011.0003.

Abstract/findings : “The hosting of major sporting events such as the Olympic Games or the FIFA World Cup has become the subject of intense competition among nations. Governments seem willing to make large financial commitments in order to win the bidding competition but evidence suggests that the economic impact of this spending is limited. While this outcome is easily understood in terms of rent seeking behavior, it is suggested that organizations such as the IOC and FIFA could better serve their constituents by diverting competition away from lavish provision of facilities towards goals that would raise participation in sports…. The members of the IOC and the FIFA Executive Committees do little to discourage extravagant spending. The memberships of these organizations have frequently been accused of outright corruption in the past, but corruption is only one part of the problem. It is perfectly reasonable for the IOC and FIFA to extract a surplus from the sale of TV and sponsorship rights to fund the global development of sport. However, the unjustified claim that these events produce substantial economic benefits can (a) mislead people into believing that their taxes are being productively spent on social regeneration rather than just funding mass entertainment, and (b) lead some private individuals to invest their own wealth in the expectation that an event will generate returns when it is unlikely to do so.”

“Economic Aspects and the Summer Olympics: A Review of Related Research” Kasimati, Evangelia. International Journal of Tourism Research , 2003, Vol. 5, 433-444, doi: 10.1002/jtr.449.

Findings: “Covering the period of 1984 through to [estimates of] 2012, all the ex ante [anticipating the event] economic studies indicate the significant role of the Summer Olympic Games in the promotion of the host economy. They highlighted the extension of the Games economic impact well beyond the actual period of the event occurrence itself. Economic growth, increased tourism and additional employment were some of their major findings. However, the high expectations released by most of them could be considered to be potentially biased, because the ambition of those commissioning the studies is to favour the hosting of the Games. This issue has received a great deal of attention from scholars investigating the Games and other mega-events (Mills, 1993; Crompton, 1995; Howard and Crompton, 1995; Kesenne, 1999; Porter, 1999; Preuss, 2000; Baade and Matheson, 2002). Nevertheless, it is our opinion that if the estimation process is made transparent, then the findings are reliable. Taking into account the strengths and weaknesses of all the methods and techniques used, the discussion here shows that ex ante models and forecasts were not confirmed by ex-post analyses and this therefore prompts the need for improved theory.”

“Bidding for the Olympics: Fool’s Gold?” Baade, R.A.; Matheson, V. Paper in Barros C; Ibrahimo M.; Szymanski , S. (Eds.), Transatlantic Sport: the Comparative Economics of North America and European Sports , 2002, 127-151.

Findings: “The purpose of this paper was to assess the economic impact of the Summer Olympic Games on Los Angeles in 1984 and Atlanta in 1996. In so doing, it was our hope that we could provide some useful information to cities bidding for the Games. It is conceivable that an after-the-fact sober appraisal of the economic contribution of the Games could help temper some of the excesses that have been brought to light by the well-publicized ‘overzealous’ behavior of those who succeeded in bringing the Olympics to Salt Lake City and Atlanta. Los Angeles and Atlanta represent an interesting contrast in terms of their approaches to the bidding process. This difference reflects to a substantial extent past financial experiences. In the wake of the financially troubled Montreal and Moscow Olympic Games in 1976 and 1980, only Los Angeles bid for the 1984 Games. This fact explains the absence of significant public sector financial support in Los Angeles, and, perhaps, the private financial success the 1984 Games are thought to have enjoyed. The increase in economic activity attributable to the 1984 Games, as represented by job growth, an estimated 5,043 full-time and part-time jobs using our model, appears to have been entirely transitory, however. There is no economic residue that can be identified once the Games left town. Los Angeles was not visibly affected by the experience; certainly it was not transformed by it. Atlanta represented a return to the extraordinary levels of public spending associated with the Olympic Games in 1976 and 1980, a phenomenon not coincidentally associated with several cities bidding for the right to host the Games… It is not surprising that the best-case scenario for the Atlanta Games of 1996 is consistent with what we could reasonably expect to find for public investments in general. More specifically if beginning in 1994 all the economic growth beyond Atlanta’s normal experience could be attributable to public expenditures in conjunction with the Olympics, Atlanta spent approximately $63,000 to create a permanent full- or part-time job. To create a permanent full-time job equivalent, past public works programs have spent approximately the same amount of money.”

“Resident Perceptions of Mega-Sporting Events: A Non-Host City Perspective of the 2012 London Olympic Games” Ritchie, Brent W.; Shipway, Richard; Cleeve, Bethany. Journal of Sport and Tourism , 2009, Vol. 14, Issue 2-3, 143-167, doi: 10.1080/14775080902965108.

Abstract: “Despite the growing importance of a ‘triple bottom line’ approach to mega sport event research, limited longitudinal research has been carried out to understand and explain resident perceptions of the impact of such events. The aim of this paper is to develop a deeper understanding of the social dimension of Olympic tourism development, by exploring resident perceptions of the London 2012 Olympic and Paralympic Games within the two respective communities of Weymouth and Portland in England. This paper reports the first stage of a repeated cross-sectional longitudinal study conducted in 2007. It highlights that generally residents were supportive of hosting the event in the local area but were concerned over perceived traffic congestion, parking issues and potential increases in the cost of living. A factor analysis identified five factors that explained 60.5% of the variance in resident perceptions, with the largest factor comprising ‘positive social impacts,’ followed by ‘negative impacts,’ ‘transport issues,’ ‘positive economic impacts’ and ‘price rises.’ Differences were found between these factors and socio-demographic characteristics. Implications for mega event managers and future research are outlined.”

“Mega-events and Housing Costs: Raising the Rent while Raising the Roof? ” Coates, Dennis; Matheson, Victor A. The Annals of Regional Science , 2011, Vol. 46, No. 1, 119-137, doi: 10.1007/s00168-009-0340-5.

Abstract: “This paper examines the relationship between hosting mega-events such as the Super Bowl, Olympics, and World Cup and rental housing prices in host cities. If mega-events are amenities for local residents, then rental housing prices can serve as a proxy for estimating residents’ willingness to pay for these amenities. An analysis of rental prices in a panel of American cities from 1993 to 2005 fails to find a consistent impact of mega-events on rental prices. When controls are placed on the regression models to account for nationwide annual fluctuations in rental prices, mega-events generally exhibit little impact on rental prices in cities as a whole and are as likely to reduce rental prices as increase them…. Somewhat stronger evidence exists, however, that mega-events tend to affect rental prices outside of the center city in a fundamentally different manner than in the city core. Atlanta experienced lower rental prices in the central city compared the suburbs both before and after the 1996 Summer Olympics while Salt Lake City witnessed an increase in rental prices in its central city compared to its suburbs before and after the 2002 Winter Olympics.”

“The Impact of the London Olympics on Property Prices” Kavestos, Georgios. Urban Studies, May 2012, Vol. 49, No. 7, 1453-1470, doi: 10.1177/0042098011415436.

Abstract: “This study estimates the impact of the London 2012 Olympics announcement on property prices. Using a self-constructed dataset of a sample of property transactions, it is estimated that properties in host boroughs are sold between 2.1% and 3.3% higher, depending on the definition of the impact area. A similar investigation based on radius rings suggests that properties up to three miles away from the main Olympic stadium sell for 5% higher. It is estimated that the overall impact on the price of properties in host boroughs amounts to £1.4 billion, having substantial social and financial implications for existing residents.”

“The Olympic Effect” Rose, Andrew K.; Spiegel, Mark M. The Economic Journal , June 2011, 652-677, doi: 10.1111/j.1468-0297.2010.02407.x.

Abstract: “Why should countries offer to host costly ‘mega-events’ such as the Olympic Games? We show that hosting a mega-event increases exports. This effect is statistically robust, permanent and large; trade is over 20% higher for host countries. Interestingly, unsuccessful bids to host the Olympics have a similar impact on exports. We conclude that the Olympic effect on trade is attributable to the signal a country sends when bidding to host the games, rather than the act of actually holding a mega-event. We develop an appropriate formal model and derive conditions under which liberalizing countries will signal through a mega-event bid.”

“The Labor Market Effects of the Salt Lake City Winter Olympics” Baumann, Robert; Engelhardt, Bryan; Matheson, Victor. Working paper series, International Association of Sports Economists, September 2010.

Abstract: “The local, state, and federal governments, along with the Salt Lake City Organizing Committee, spent roughly $1.9 billion in direct costs related to planning and hosting the 2002 Winter Olympic Games. In this paper, we investigate whether these expenditures increased employment. At the state level, we find strong evidence it increased leisure related industries in the short run and potentially in the long run. However, the results indicate it had no long term impact on trade or total employment.”

“City Branding and the Olympic Effect: A Case Study of Beijing” Zhang, Li; Zhao, Simon Xiaobin. Cities , October 2009, Vol. 26, Issue 5, Pages 245-254, doi: 10.1016/j.cities.2009.05.002.

Abstract: “City branding is a common practice adopted by many cities in the context of intensified urban competition for mobile resources, markets, opportunities and attention. This paper examines the effectiveness of efforts to brand Beijing, the capital city of China. Based on an analysis of official branding strategies through the Olympics, and an attitudinal survey of peoples’ understanding of Beijing, the paper investigates to what extent the current campaign has caught the city’s good attributes. The paper finds a mismatch between the identity and core values as branded by the city government, and the realities as experienced by visitors and residents. The paper argues that the Beijing Olympics could only have limited impacts on the city’s brand.”

“Assessing the Impact of the 2004 Olympic Games on the Greek Economy: A Small Macroeconometric Model ” Kasimati, Evangelia; Dawson, Peter. Economic Modelling , January 2009, Vol. 26, Issue 1, 139-146, doi: 10.1016/j.econmod.2008.06.006.

Abstract: “This paper examines the impact of the Athens 2004 Olympic Games on the Greek economy. Using a small aggregate macroeconometric model we find evidence to support the view that the Olympics is an event that could successfully boost the economy of the host city by generating benefits that outweigh the preparation cost. Consistent with recent literature in this area, whilst the impact effects are quite strong during the preparation phase and the year the Games took place, the long-term economic legacy effects appear to be quite modest.”

“The Seoul Olympics: Economic Miracle Meets the World” Bridges, Brian. The International Journal of the History of Sport , December 2008, Vol. 25, No. 14, 1939-1952, doi: 10.1080/09523360802438983.

Abstract: “ The 1988 Olympic Games in Seoul were a coming out party for South Korea — a culmination of its efforts to be recognized as an accomplished economic power and a serious international actor. The South Korean leadership undoubtedly looked for accelerated economic growth as well as heightened national consciousness (including awareness of sporting cultures). Yet, the run-up to and the actual hosting of the games also had a dramatic impact on both South Korea’s domestic politics, as it became a factor in the struggle for democratization, and its external relations, most specifically with North Korea and its erstwhile allies. While there were economic benefits and a more subtle impact on South Korean society, national pride, collective memory and sporting culture, it is these political legacies that have been the most profound.”

“The Economic Consequences of the Sydney Olympics” Madden, John R. Current Issues in Tourism , 2002, Vol. 5, Issue 1, 7-21, doi: 10.1080/13683500208667904.

Abstract: “This paper assesses the economic impact of the 2000 Olympics. It draws on economic modeling I undertook for Arthur Andersen (financial adviser to the Sydney Organising Committee for the Olympic Games).The analysis is undertaken with a large-scale multiregional computable general equilibrium model, so as to take into account both the positive and negative flow-on effects of Sydney staging the Games. The effects of Olympics construction and operating expenditure, and of spending by Games visitors and additional tourists are modelled over a 12-year period, under specific assumptions regarding the Australian labour market, capital supply constraints and Australian government policy on foreign debt. Olympics expenditure not funded by Games revenues is modelled as being met by an increase in New South Wales state tax revenues (via a larger revenue base and slightly higher tax rates than would otherwise be the case) and a substantial diversion of government expenditure from non-Olympic to Olympic items. Simulation results indicate that NSW activity is 0.3% higher over the 12-year period due to the Games, but there is little effect on the other states. However, the final outcome is sensitive to the degree the Olympics promotes tourism from overseas and the labour market reaction.”

“National Well-being and International Sports Events” Kavestos, Georgios; Szymanski, Stefan. Journal of Economic Psychology, 2010, Vol. 31, Issue 2, 158-171, doi:10.1016/j.joep.2009.11.005.

Abstract: “The widely proclaimed economic benefits of hosting major sporting events have received substantial criticism by academic economists and have been shown to be negligible, at best. The aim of this paper is to formally examine the existence of another potential impact: national well-being or the so-called ‘‘feelgood” factor. Using data on self-reported life satisfaction for twelve European countries we test for the impact of hosting and of national athletic success on happiness. Our data covers three different major events: the Olympic Games, the FIFA World Cup and the UEFA European Championship. We find that the ‘‘feelgood” factor associated with hosting football events is large and significant, but that the impact of national athletic success on happiness, while correctly signed, is statistically insignificant.

“Olympic Bidding, Multicultural Nationalism, Terror, and the Epistemological Violence of ‘Making Britain Proud'” Falcous, Mark; Silk, Michael L. Studies in Ethnicity and Nationalism , October 2010, Vol. 10, Issue 2, 167-186, doi: 10.1111/j.1754-9469.2010.01073.x.

Abstract: “This paper excavates the entanglement of British nationalist identity politics with sport, terrorism, place re-imagining, mega-event bidding, and corporate neoliberalism. We focus on London’s 2012 Olympic bidding and the coalescence of corporate, state, civic, and sporting interests surrounding the national (re)imaginings that characterised the bid. We open with a critical reading of the bid narratives explicating how selective assertions of Britishness were envisioned through the motifs of harmonious multicultural unity, ‘youth,’ and passion for sport. We focus on how these narratives offered up ‘idealised’ multicultural citizens and harmonious diversity as a reactionary form of nationalist ‘pride politics’ ( Fortier 2005 ). We subsequently juxtapose these narratives with a critical reading of English press and political discourse in the aftermath of the 7 July 2005 bombings — the day after London was awarded the Olympic games. This juxtaposition reveals the tensions and ambiguities between assertions of inclusive civic nationalism — that apparently transcends ethnic difference — and the geo-politics of the ‘war on terror’ within Britain’s post-imperial self imaginings. Specifically, we tease out the place — and ambiguities — of the 2012 olympics within these imaginings reading the London games as an exemplar of a soft-core ideological spectacle informing selective nationalist narratives within the the context of unfolding neoliberal politics.”

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John Wihbey

Even With No Tourists or Fans, Japan Is Already Seeing Economic Benefits From the $15.4 Billion Tokyo Olympics

W ith a volley of fireworks at National Stadium, the Tokyo Summer Olympics ended with a bang. In economic terms, though, it felt more like a whimper.

The Olympics cost Japan at least $15.4 billion , making them the most expensive summer Games ever, according to a study by University of Oxford researchers . The cost for the 2008 Beijing Olympics is widely cited as being more than $40 billion, though the researchers found most of the spending was not directly related to the Games.

The 17-day Tokyo Olympics were held without foreign tourists or even domestic fans amid a COVID-19 state of emergency during which Japanese officials urged people to stay home and bars to close early amid skyrocketing infections. This means the usual ways that host countries make up the cost of Olympics spending aren’t on the table.

Critics have called the Tokyo Olympics a write-off, but the Games have generated some benefits and can’t be called a total loss.

Takahide Kiuchi, executive economist at Nomura Research Institute, a think tank, projected that the short-term economic benefits of the Games would be $16.4 billion in June, when many in Japan were advocating for canceling the Tokyo Olympics. He lowered that to $15.2 billion due to restrictions on spectators. That’s far below some rosy predictions.

“A few years ago, the Tokyo city government estimated the economic legacy of the Games at 12 trillion yen or $109 billion. They expected foreign spectators would be frequent visitors to Japan and accelerate inbound demand. This estimation was clearly overstated because foreign spectators were not allowed,” says Kiuchi. “However, I still expect some economic legacy to materialize. Hotels and restaurants spent money on renovations for the convenience and comfort of foreign tourists. I think this is one of the economic legacies of the Games and it will contribute to attract foreign tourists to Japan.”

READ MORE: Japan’s COVID-19 Strategy Relied on Trust. Holding the Olympics Shattered It

The huge costs associated with holding the Olympics has sparked backlash in recent years, with Boston and Budapest withdrawing their bids for the Games amid local opposition. Brisbane’s recent winning proposal for the 2032 Summer Olympics—the only bid to reach a final vote—included a pledge to fund the organizational budget entirely from private sources.

As a result, whether Japanese taxpayers and businesses feel they’ve gotten good value for the money invested in the Olympics could factor into whether future cities decide to bid for the Games.

Here are some less obvious ways the Tokyo Olympics have already generated economic activity in Japan.

One of the biggest recipients of Olympics economic activity is the construction industry. The Kengo Kuma-designed, 68,000-seat National Stadium and seven other venues were built for the Olympics, costing about $3 billion ; 25 other facilities were renovated. After the Games, the stadium will be used for soccer and rugby matches, as well as cultural events. The athletes’ village , surrounding roadwork and infrastructure, cost some $490 million and will be converted into apartments.

The COVID-19 pandemic not only delayed the Olympics by a year, adding about $2.8 billion to the price tag, but the alarming spread of the delta variant in Japan led authorities to ban spectators from nearly every event. Those who were shut out watched the competitions on the internet and television, and some splurged on big screens. One hot item was 65-inch organic light-emitting diode (OLED) TVs. Electronics retailer Bic Camera tells TIME it saw a 30% increase in sales of OLED TVs in July compared to the previous year.

Huge new interest in some sports is also generating economic activity. One example is skateboarding. Yuto Horigome dazzled fans with his seemingly effortless moves at Tokyo’s Ariake Urban Park when he took home the first-ever Olympic gold medal in the sport in the men’s street skateboarding final. Sakura Yosozumi, Kokona Hiraki, and Sky Brown, three girls born in Japan, took all the medals in the women’s park skteboarding final.

The high-flying youths have added jet fuel to a skateboarding craze, which got rolling earlier on in the pandemic as a way to get outdoors and exercise while social distancing. It’s bringing more and more skaters to the streets and skateparks of Tokyo.

“We’ve seen more people getting into skateboarding, kids and adults alike, especially recently because of the Olympics,” says Koichi Hirooka, manager of Murasaki Park Tokyo, a skateboard park in Tokyo’s Adachi Ward. “Before the Games, foreign athletes like Nyjah Huston were a big influence, but with Japanese winning medals I expect skateboarding will become a major sport in Japan.”

Another benefit may accrue from the stellar performance of Japan’s female athletes. Including its skateboarding girls, Japanese women were on the medals podium a whopping 33 times, out of the record 58 medals for the country. Women also claimed 15 of the 27 golds.

“I believe this will not only encourage more females to pursue athletics, but I hope these female athletes serve as role models to show Japanese girls and women that anything is possible and barriers are made to be broken,” says Kathy Matsui, a former Goldman Sachs vice chair known for coining the term “ womenomics ” in male-dominated Japan to promote the economic benefits of empowering women.

In the latest World Economic Forum Global Gender Gap Report , Japan ranked 120th out of 156 countries. It has made some progress, however, and Matsui has written about how closing the gender employment gap could boost Japan’s GDP by 10%.

Even with the Olympics’ $15.4 billion official price tag, the portion shouldered by taxpayers is a tiny fraction of heavily indebted Japan’s $1 trillion state budget .

Only time will tell whether it was money well spent.

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Artists perform during the Tokyo 2020 Flag Handover ceremony during the closing ceremony of the Rio 2016 Olympic games at Maracana in Rio de Janeiro

Tokyo Olympics: no spectators is bad for business, but hosting could still bring long-term benefits

Head of Department, Reader in Events, and Director of the Observatory for Human Rights and Major Events, University of Surrey

Disclosure statement

Dr. Mike Duignan has previously received funding from the International Olympic Committee (IOC), but for a topic unrelated to this article. Mike is also the Director of the Observatory for Human Rights and Major Events which is the UK's official Olympic Studies Centre, which is affiliated to the IOC's academic Olympic Studies Centre. However, the nature of this relationship is academic with the view to disseminate good social science concerning how we can enhance the social and economic benefits of hosting the Olympic Games for the host country, city and its citizens. This article was based on work funded by 2020 Marie Skłodowska-Curie Actions, Research and Innovation grant agreement no. 823815

University of Surrey provides funding as a founding partner of The Conversation UK.

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Japanese Olympics minister Tamayo Marukawa has confirmed that, due to COVID, no spectators will be allowed to attend Tokyo 2020. This comes after initial announcements in March 2021 that no international tourists would be allowed to enter Japan for the events which are scheduled to open on July 23.

No visitors means no income. This is, of course, an economic setback for Japan, but specifically for tourist attractions and local businesses often prepared for a spending bonanza .

Capturing tourist spending in and around the live events of the games plays a key role in the return on investment injected by the government and taxpayers into making the games happen in the first place. The total cost of hosting currently stands at US$15.4 billion (£11.1 billion). This will compound the impact COVID-19 has had on the Japanese economy, which shrank by 4.8% in 2020.

Tourism was the primary justification for hosting. Both the government and the public are acutely aware of how important the Tokyo 1964 games were, in terms of revitalising and reconstructing Japan’s infrastructure after the second world war .

From the construction of venues like the Nippon Budokan judo centre, repurposed for Tokyo 2020, to transport networks, including the Shinkansen bullet train , the 1964 games triggered key improvements to the built environment. This in turn has become central to Japan’s tourism industry .

Furthermore, Tokyo 1964 were the first Olympic games to be broadcast live via satellite in the history of the games. Footage beamed to between 600 million and 800 million spectators worldwide showcased the city and its cultural assets.

Seated crowds in an arena watch a judo match with Japanese flag above

In his 2016 book The Games , sports writer, broadcaster and sociologist David Goldblatt argues that the 1964 games were “the single greatest act of collective reimagining in Japan’s post-war history”. This illustrates how hosting large-scale events can contribute to long-term economic growth and drive tourism ambitions .

The city of Tokyo expected to welcome over 40 million foreign visitors for the 2020 games. An aggressive tourism development strategy put in place, long before COVID hit, was one of the structural reforms the then-prime minister, Shinzo Abe, introduced to fuel future economic growth .

Structural reforms

A series of ecological shocks contributed to catalysing these reforms. The first was the 2011 earthquake . Known as the great Tohoku earthquake, it triggered the tsunami that devastated large swathes of north-eastern Japan and led to the nuclear meltdown of the Fukushima Daiichi power plant, rendering the area uninhabitable and off-bounds to tourists.

My recent research has shown how this left Japan with a blemished destination brand, in tourism terms. As part of the recovery effort to signal Japan as a safe place to visit, the government embarked on a decade-long marketing and infrastructural campaign to revive the country’s tourism industry.

Safety, however, was only one objective. The primary goal was to rehaul Japan’s tourism industry and reinvent the country as a unique place to visit. To this end, two initiatives were devised: the country-wide EnjoymyJapan campaign. This was supplemented by a global, multilingual online platform intended to showcase the country’s key attractions, assets and experiences, all in one place.

Row of posters featuring cartoon characters

The second, entitled Tokyo, Tokyo , aimed, much like the UK’s This is GREAT Britain Campaign for London 2012, to illustrate the relationship between the old and the new. Posters featured older cultural symbols, from maneki-neko fortune cats to kabuki theatre, alongside Hello Kitty and new-age robotics. Scattered across the city, from billboards to train stations, these rubbed shoulders with official Tokyo 2020 Olympic posters too, illustrating the strategic link between the two campaigns.

These initiatives appear to have worked. The number of foreign visitors skyrocketed from 7 million international tourists in 2011 to 31 million in 2018. This took Japan from being the 36th most visited country (behind Belgium and Bulgaria) in 1995 to the 11th in 2018 .

As a result, citizens at some sites across the country, from the Sasaguri’s Nanzo-in temple to the Golden Gai district in Shinjuku, Tokyo, are reportedly suffering from overtourism . Local living standards have deteriorated, and cultural and ecological damage has been reported.

Broader returns

Beyond the 40 million visitors Japan hoped to reach by 2020 was the goal of 60 million by 2030. COVID of course has put a stop to this. It is not unreasonable to suggest that these campaigns could have easily existed regardless of the Olympics. Arguably, though, without the impetus of hosting, they may have neither come to fruition or received the level of funding required to be successful.

a graphic showing Japan’s tourism growth from 1964 to 2018

It is worth noting, too, that not all aspects of tourism development are economic. More often than not, these developments are part of a series of social policies too.

Tokyo’s train stations, for example, have been reconfigured to be physically more accessible for those with disabilities. This goes hand in hand with related campaigns, such as the Unity in Diversity leaflets distributed across Japan to change social attitudes towards people with disability. This is significant, as the needs of people with disability have historically been poorly attended to - but this is slowly changing .

A Tokyo 2020 pamphlet in English on diversity

Significant economic gains, which tourism scholars refer to as the pregacy (the pre-legacy), have been accrued in the years prior to COVID-19. It is possible, when consumer confidence returns and international travel for pleasure is once again permitted, that Japan’s aggressive tourism development strategy will regain momentum. The benefits of Olympic-led tourism development in the short and long-term are undeniable. Could this be achieved, however, without the billions that hosting an event of this size costs?

This article was amended to clarify that the Tokyo 1964 Olympic games were the first to be broadcast live via satellite around the world

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Costs Incurred When Hosting the Olympics

Benefits of hosting the olympics, drawbacks of hosting the olympics.

Debt Resulting from Olympics

Examples of Olympics Cost

The bottom line, the economic impact of hosting the olympics.

Pete Rathburn is a copy editor and fact-checker with expertise in economics and personal finance and over twenty years of experience in the classroom.

The economic impact of hosting the Olympics tends to be less positive than anticipated. Because most cities have ended up falling massively in debt after hosting the games, cities without the necessary infrastructure may be better off not submitting bids.

Key Takeaways

Many countries and the cities within them bid tens of millions of dollars for the chance to host the Olympics.
Many believe that the level of tourism and foreign investment that result from hosting the games can be an economic boon.
Others see the games as overly expensive, leaving cities and nations with massive debts and economic woes.

Hosting the games is even more costly than the bidding process. For example, London spent $14.6 billion to host the Olympics and Paralympics in 2012. Of that amount, $4.4 billion came from taxpayers. Beijing spent $42 billion on hosting in 2008. Athens, Greece, spent $15 billion on hosting the 2004 Olympics. Sydney paid $4.6 billion on hosting the Olympics in 2000. Of that total, taxpayers covered $11.4 million. Rio de Janeiro, Brazil, paid over $20 billion for the 2016 Olympics.

Once a city wins a bid for hosting the Olympics, cities commonly add roads, build or enhance airports, and construct rail lines to accommodate the large influx of people. Housing for the athletes in the Olympic village, as well as at least 40,000 available hotel rooms and specific facilities for the events, must be created or updated as well. Overall, infrastructure costs may range from $5 billion to $50 billion.

Cities hosting the Olympics gain temporary jobs due to infrastructure improvements that continue benefiting the cities into the future. For example, Rio de Janeiro constructed 15,000 new hotel rooms to accommodate tourists. Sochi, Russia, invested approximately $44.3 billion in constructing non-sports infrastructure for the 2014 Olympics.

Beijing spent over $22.5 billion constructing roads, airports, subways, and rail lines, as well as almost $11.25 billion on environmental cleanup. Additionally, thousands of sponsors, media, athletes , and spectators typically visit a host city for six months before and six months after the Olympics , which brings in additional revenue.

Job creation for cities hosting the Olympics doesn't always pan out as projected. For example, when Salt Lake City hosted the 2002 Olympics, the city added only 7,000 jobs, about 10% of the number that officials had initially indicated the games would bring. Also, most jobs went to workers who were already employed, meaning unemployment statistics did not necessarily budge significantly. Furthermore, many of the profits realized by construction firms, hotels, and restaurants flow to international companies rather than to the local economy .

Income from the games often covers only a portion of expenses. For example, the London 2012 Summer Olympics brought in $5.2 billion, compared to the city's spending of $18 billion. Vancouver, Canada, brought in $2.8 billion after spending $7.6 billion on the Winter Games in 2010. Beijing generated $3.6 billion and spent more than $40 billion for the Summer Olympics in 2008. As of 2016, Los Angeles is the only host city that realized a profit from the games, mostly because the infrastructure required of them already existed.

Debt Resulting from Creating Olympic Facilities

Many of the arenas constructed for the Olympics are not one-time costs. Rather, they represent ongoing expenses. For example, Sydney’s stadium costs $30 million annually in maintenance. Similarly, Beijing’s Bird’s Nest arena costs $10 million in annual maintenance.

In addition, when a city borrows to finance construction, it can be on the hook for repayment long after the games are over. It wasn't until 2006 that Montreal finished paying off its debt from the 1976 games. This is the case even if the facilities are themselves defunct. For instance, most of the facilities created for the Athens Olympics in 2004 contributed to Greece’s debt crisis and remain empty.

The 1976 Olympics in Montreal

At the time of the event, Montreal was undergoing a dramatic surge in terms of its global profile. In conjunction with the Expo ’67 World Fair, which was held to celebrate the nation’s centenary, the games helped to transform the city into a world-renowned location. The governing body soon ran into the familiar budgetary issues, as their estimated costs of $360 million fell drastically short of the final $1.6 billion bill.

The Montreal Games ended up leaving a 30-year legacy of debt and financial disaster for the city, with the decaying, custom-built venues remaining a forlorn eyesore for decades.

The 2004 Olympics in Athens

Some economists trace the beginning of Greece’s ongoing economic woes to the Olympics held in Athens in 2004. The event stands as the embodiment of excess and irresponsible spending. Its total cost was an estimated $15 billion, which far surpassed the original budgeted amount. A significant portion of the overrun was due in part to additional security costs incurred in the aftermath of 9/11.

The 2016 Olympics in Rio de Janeiro

Health concerns over the Zika virus that was spreading in Brazil caused many athletes to withdraw from the 2016 games and many spectators to not enter the country. Although the Brazilian government added 2,000 healthcare professionals to help during the Olympics, the country’s debt crisis put additional strain on the healthcare system. Additionally, scientists determined that the water being used for boating and swimming events was contaminated with raw sewage and “super bacteria,” adding to health concerns. Brazil had already lost an estimated $7 billion in tourism due to the Zika virus before the Olympics were taken into consideration.

The 2016 Olympics cost the Brazilian government approximately $13.1 billion to host, which was $3.5 billion over budget. In addition, it bore $8.2 billion in infrastructure upgrades and renovations, paid for with a mix of public and private money.

The 2020 (2021) Olympics in Tokyo

Japan won the 2020 games by bidding $12 billion, pushing out rival Italy to win the hosting spot. But then the COVID-19 pandemic hit in the spring of 2020, and the decision was made to postpone the Olympics to the summer of 2021. The postponement added an additional $2.8 billion to the total outlay, which is estimated to be a total of more than $15 billion, making it the most expensive Olympics ever held.

When 2021 brought a surge of COVID-19 in many parts of the world, including in Japan, the decision was made to bar spectators. Without fans, international tourism did not provide the spending needed to make up for the costs incurred by the Japanese government.

How Does Hosting the Olympics Affect the Economy?

The Olympics can bring a range of benefits and drawbacks to its host city. Countries and cities are often compelled to bid for the privilege of hosting the games, in hopes that it will stimulate the development of infrastructure, draw tourisms dollars, and boost employment. However, in many instances, the games have failed to deliver on their projected economic boons, leaving host cities with debt and defunct facilities.

Is Paris 2024 on Budget?

In a January 2024 interview with Bloomberg, the CEO of the Games organizing committee indicated that the Paris Olympics was on track to meet its cost goals. Central to the city's bid was an aim to have 95% of infrastructure be either existing or temporary, so as to keep building and maintenance costs low.

How much will the 2024 Olympics cost?

The original budget for the 2024 Paris Olympics was set at 8 billion euros, or $8.2 million USD.

Hosting the Olympics tends to result in severe economic deficiencies for cities. Unless a city already has the existing infrastructure to support the excess crowds pouring in, not hosting the Olympics may be the best option.

Observer Research Foundation. “ Extortionate Costs and the Role of International Sporting Bodies .”

Council on Foreign Relations. “ The Economics of Hosting the Olympic Games .”

Journal of Economic Perspectives. “ Going for the Gold: The Economics of the Olympics ,” Page 205.

Journal of Economic Perspectives. “ Going for the Gold: The Economics of the Olympics ,” Page 203.

College of the Holy Cross. “ The Labor Market Effects of the Salt Lake City Winter Olympics ,” Page 7.

The Guardian. “ The 40-Year Hangover: How the 1976 Olympics Nearly Broke Montreal .”

Council on Foreign Relations. “ Greece’s Debt: 1974 – 2018 .”

Encyclopædia Brittanica. “ 7 Ways Hosting the Olympics Impacts a City .”

Foundation for Defense of Democracies. “ Terrorism, Economics, and the London Olympics .”

Council on Hemispheric Affairs. “ Super Bacteria in Rio de Janeiro’s Olympic Arenas .”

United Nations Development Programme. “ A Socio-Economic Impact Assessment of the Zika Virus in Latin America and the Caribbean ," Download PDF, Page 25.

The Associated Press. “ Tokyo Olympics Cost $15.4 Billion. What Else Could That Buy? ”

Business Insider. “ The Tokyo 2020 Olympics May Cost More Than $26 Billion — and the Estimate Keeps Rising .”

Olympics. “ Statement on Overseas Spectators for the Olympic and Paralympic Games Tokyo 2020 .”

Olympics. “ Tokyo 2020 Tests and Total Confirmed Positives .”

AP. " Paris Olympic Organizing Head Says Budget ‘Under Control’ a Year Ahead of 2024 Games. "

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Tokyo Was Promised Glory and Riches. It Got an Olympics in a Bubble.

The Games failed to live up to their economic promise and cast a harsh light on Japan’s political culture. Some feel “a hunger for a new system.”

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By Ben Dooley , Hikari Hida and Hisako Ueno

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TOKYO — Tokyo’s leaders promised glory and riches when the Japanese capital won its bid to host the 2020 Summer Olympics . Jobs and the economy would grow. The public would rally in support. Japan’s international stature would rise.

The Olympics are set to close on Sunday, a year later than planned and far off the script the organizers described when they won the Games in 2013 . The coronavirus forced the organizers to put the Games inside an anti-coronavirus bubble, all but eliminating any economic or even spiritual upside for Tokyo .

Instead, the city has been reduced to a mere vessel for a mega-event that has demanded much but provided little in return. Even after spending many billions of dollars, Tokyo experienced the Games much like any other city: as an event on television.

Makoto Inoue borrowed heavily to open a Mexican restaurant in 2018 in the shadow of Tokyo’s new Olympic Stadium, hoping that the location would attract Olympic visitors plus crowds of tourists for years to come.

On the afternoon before the Olympics kicked off, customers piled into his small basement shop for one of the first times since the pandemic began. But at 8 p.m., coronavirus restrictions forced him to close his doors just as the opening ceremony was getting underway.

“I could see the fireworks,” said Mr. Inoue, 43.

Instead of an economic boost, the Olympics brought a growing sense of malaise. Already weighed down by scandal and billions of dollars in cost overruns, the Games went ahead against the wishes of most of Japan’s people, who viewed them as an unacceptable risk to public health. The organizers’ insistence on holding them reinforced a sense that the country’s leaders are unaccountable to the public.

After enduring so much, many in Japan have been left wondering what the point of it all was.

“National confidence is in a fragile state,” said Nobuko Kobayashi, a partner in Tokyo with the Japanese arm of the consulting firm Ernst & Young, who regularly writes about social issues in the country.

The chaos surrounding the Games has reinforced “a hunger for a new system and a new way of doing things,” she said.

Poor decisions and missteps led to a series of resignations among top Games officials. Japan is now confronting its worst coronavirus outbreak yet, as some people in Japan appear to have taken the Games as a license to lower their guard.

Voters may punish Japan’s leaders for their persistence. The party of Yoshihide Suga, Japan’s increasingly unpopular prime minister, is likely to retain power in the face of weak opposition in parliamentary elections that are set to take place no later than the end of October. Still, its grip could be considerably weakened, and Mr. Suga’s fate after that is an open question.

Opinions about the Games have softened somewhat as they finish their two-week run, melted by the glow of Japan’s best-ever medal haul. Government leaders have danced around questions about what benefits the Olympics have conferred, providing bromides about how the athletes’ success in the face of adversity will set an example for a world struggling with the pandemic.

The biggest setback for the Games came from the pandemic, which forced organizers to delay the event for a year, leading to ballooning costs, economic losses and political disarray. The total cost is unclear: The absence of spectators alone probably reduced the economic benefit by $1.3 billion, the Nomura Research Institute, a Tokyo think tank, projected before the Games.

But many of the shortcomings were of Japan’s own making. Scandals over things as diverse as bid rigging, cost overruns, plagiarism and misogynistic comments by the head of the Japanese Olympic committee piled disrepute on the Games.

Promoters promised to deliver a reasonably priced, environmentally friendly event that would embrace diversity and sustainability and deliver economic benefits that would last for years.

But as Tokyo fired up its cranes and cement mixers, the official cost skyrocketed to $14.9 billion from $7.3 billion. The one-year pandemic delay drove costs 20 percent higher, according to a government report. But those figures probably still don’t represent the true cost: A government audit conducted before the pandemic had already put the real price at $27 billion.

The economic forecasts, too, began to look shaky. Official estimates suggested that the event and its legacy effects would create nearly two million jobs and add more than $128 billion to the economy from investment, tourism and increased consumption.

But “those numbers were really big — with or without Covid-19, that would not have happened,” said Sayuri Shirai, an economics professor at Keio University in Tokyo and a former member of the Bank of Japan’s board. (The Games have a history of overpromising no matter where they are held.)

When the pandemic hit, many of the Olympics investments changed from black ink to red. Tokyo 2020 had tripled the record for domestic corporate sponsorships, raking in more than $3.6 billion for the organizers. But many of those partners then decided that — at least at home — they would distance themselves from the event.

Days before the opening ceremony, Toyota, one of Japan’s most powerful companies, announced that it would not air its Olympic ads in the domestic market and that its chairman would not attend the event. Other sponsors followed suit. (Local media had reported that Toyota spent $1.6 billion for a 10-year Olympic sponsorship deal. Toyota declined to comment.)

The losses are a rounding error for Japan’s enormous economy. But the smaller businesses along the thoroughfares and winding alleys of Tokyo may never recover.

Toshiko Ishii, 64, who runs a traditional hotel in the city’s Taito Ward, spent over $180,000 converting the building’s first floor into an eatery in anticipation of a flood of tourists.

It was already a bit of a risk, and when the pandemic hit, Ms. Ishii became worried that she might have to shut down. Even with the Olympics, she has had no guests for weeks.

“There’s nothing you can really do about the Olympics or the coronavirus, but I’m worried,” she said. “We don’t know when this will end, and I have a lot of doubts about how long we can keep the business going.”

Pandemic or no, reality was bound to fall short of the grand expectations set by Japanese leaders.

They pitched Tokyo 2020 as an opportunity to show the world a Japan that had shaken off decades of economic stagnation and the devastation of the 2011 earthquake and tsunami that touched off the Fukushima nuclear disaster.

Appealing to nostalgia for the 1964 Olympics, when Japan wowed the world with its advanced technology and economic strength, Shinzo Abe, the former prime minister, framed the 2020 Olympics as an ad campaign for a cool, confident country that was the equal of a rising China.

After decades of perceived decline, “more and more Japanese, the elder generation, senior people, wanted to remember, wanted to repeat that successful experience again in 21st-century Japan,” said Shunya Yoshimi, a professor of sociology at Tokyo University who has written several books about Japan’s relationship to the events.

Instead, the pandemic brought a sense of fear and uncertainty that were worsened by the decisions of Japan’s leaders.

Officials promised a safe Games but moved slowly to create the conditions for that. Organizers went back and forth on whether to allow spectators, deciding to bar them only when coronavirus levels were clearly trending higher.

Even when they discussed allowing people to enter the country, there seemed to be little initial urgency to vaccinate the Japanese population. Vaccination rates had barely cleared 20 percent when the Games began, far behind the levels in other rich nations. Organizers insist the Games themselves aren’t responsible for Tokyo’s accelerating infection rates, citing intense testing around the venues.

“People are enjoying the Olympics but feel that the government did not do a good job planning them,” said Takuji Okubo, chief economist at Japan Macro Advisors.

“When it comes to actual policy, he did OK,” Mr. Okubo added, referring to Mr. Suga, the prime minister. “But his communication was very, very poor. That’s where he really failed as the leader of the Japanese government.”

The political and economic uncertainty created by the Games won’t be easily solved as long as the pandemic rages. Mr. Inoue, the taqueria owner, said he would stay open through the closing ceremony.

After that, he said, “there’s nothing to be done but survive.”

Ben Dooley reports on Japan’s business and economy, with a special interest in social issues and the intersections between business and politics. More about Ben Dooley

Hikari Hida reports from the Tokyo bureau, where she covers news and features in Japan. She joined The Times in 2020. More about Hikari Hida

Hisako Ueno has been reporting on Japanese politics, business, gender, labor and culture for The Times since 2012. She previously worked for the Tokyo bureau of The Los Angeles Times from 1999 to 2009. More about Hisako Ueno

IMAGES

International visitor/tourist quantity before and after the Olympic
Statistics infographic : How Much Tourism The Olympics Bring to London
Graphics: Ice and snow tourism surges ahead of 2022 Winter Olympics
Graphics: Ice and snow tourism surges ahead of 2022 Winter Olympics
Graphics: Ice and snow tourism surges ahead of 2022 Winter Olympics
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Hosting the Olympic Games generates powerful economic benefits. It enables a region and country to develop: the knowledge and skills of their workforce and volunteers; career opportunities; the tourism and events industry; the business sector; their global profile; and diplomatic relations. Independent reports, commissioned by future host ...
Pro and Con: Hosting the Olympics
The Olympics increase valuable tourism, which can boost local economies. The Olympics increase a host country's global trade and stature. The Olympics create a sense of national pride. Con. The Olympics are a financial drain on host cities. The Olympics force host cities to create expensive infrastructure and buildings that fall into disuse.
Olympic Games 2024 set to boost tourism spending in Paris by…
LONDON, UK - An extra three millio n people are expected in Paris for the Olympic Games in 2024 increasing tourism spending by up to EUR4 billion, reveals a Euromonitor International expert. The highly successful Rugby Union World Cup which has just played out in Paris served as a dress rehearsal for next summer's Olympic s which will bring ...
Tokyo Olympics: no spectators is bad for business, but hosting could
Japan's tourism growth from 1964 to 2018 (Japanese National Tourism Organisation, 2019) Author provided It is worth noting, too, that not all aspects of tourism development are economic.
The Economic Impact of Hosting the Olympics
For example, the London 2012 Summer Olympics brought in $5.2 billion, compared to the city's spending of $18 billion. Vancouver, Canada, brought in $2.8 billion after spending $7.6 billion on the ...
PDF The economic benefiTs of hosTing The olympic and paralympic games
The Canadian Tourism Commission calculated that CAD 1 billion 'Advertising Value Equivalency' was generated around hosting the Olympic and Paralympic Games Vancouver 2010. Local people are able to develop their knowledge and skills More than 18,000 volunteers supported Beijing 2022, with 94 per cent under the age of 35. They worked
Full article: Tourists' experiences of mega-event cities: Rio's olympic
Factors influencing Olympic tourist engagement with host environments. Travel-related decision making involves numerous factors that influence and determine individual and collective action, either when planning to visit or when physically exploring a destination (Weed and Bull Citation 2009).This section illustrates some of the factors that influence the behaviour of Olympic-tourists, their ...
Promoting tourism
Tourism Vancouver considered that the Olympic Winter Games had contributed to reducing the negative impact of the global economic crisis between 2009 and 2011 on the tourism industry. Thanks to the increased exposure resulting from the Winter Games, Whistler was able to attract high-profile events during the summer season, buoying visitor volumes.
Mega-sport events and inbound tourism: New data ...
Mega-sports events now only increase inbound tourism by 4%, on average. • The Summer Olympic Games see an increase of 18% on inbound tourism. Most events, however, have no positive impact. • Our results have implications for the selection of future host cities and countries. We find that developing countries have larger effects.
How the Olympics Hurt Tokyo's Economy
TOKYO — Tokyo's leaders promised glory and riches when the Japanese capital won its bid to host the 2020 Summer Olympics. Jobs and the economy would grow. The public would rally in support ...
Olympic Games will showcase Beijing's and China's potential for tourism
Tourism tipped to be China's biggest Olympic beneficiary. Half a million international visitors are expected in Beijing during the Games, with a further 2.4 million domestic visitors from across China, evidence of the country's fast-rising middle-class sector and its growing propensity to travel. UNWTO has been working with the China ...
Paris 2024 Summer Olympics: Everything You Need to Know
The 15,000 athletes in Paris will be based in the newly constructed 2024 Paris Olympic Village, or "Athlete's Village," a 300,000 square meter project built sustainability between Saint ...
Rio unveils Wall of Champions as Brazil reveals record tourist boost
The Brazilian Ministry of Tourism has confirmed that the Olympic Games Rio 2016 helped the country achieve record tourism figures last year. Over the 12 months, Brazil welcomed 6.6 million foreign tourists, which represents a 4.8% increase on the previous year. In terms of revenue generated by tourism in 2016, the total was US$ 6.2 billion, an ...
Traveling To The Paris Olympics? Prepare For Price Hikes, From ...
A special Transport pass allowing unlimited travel to all Olympic and Paralympic venues across the city, as well as to and from Charles de Gaulle and Orly airports, is on sale as a physical card ...