Boom and bust: The realities of hosting the Olympics

Steve English February 17, 2014 1

From now until the last fireworks light up Sochi’s sky on February 23, G Adventures will offer up the best original and curated content from around the web. Want to follow along? We’ll share our take on Sochi 2014 through through the @gadventures handle, on Facebook—and right here on the Looptail. Check out all of our Winter Games–related articles here. This is your planet—see it at play.


Opening Ceremonies in Sochi. Photo by Val.

Opening Ceremonies in Sochi. Photo by Val.

Playing host to the Olympics can be the best choice a city makes, or the worst.

Well before the hordes of spectators, journalists, and athletes had even arrived in Sochi, the 2014 Games were already breaking records. Russia has spent over 1.5 trillion rubles (roughly USD50 billion) to put the world up for two weeks in the charming Black Sea resort town, making these games the most expensive ever. (If you’re scoring at home, that’s about USD150 million for each event.)

It’s always an honour for a country to host a major international feel-good event like the Olympics, and advocates often claim that the media exposure and all-around lavishness are good for the host country’s tourism industry. But do events like this really justify their massive price tags?

The answer is… well, a little fuzzy. By most metrics, the Games rarely turn a profit for their hosts. Only three Olympics in recent memory – Los Angeles, Barcelona, and Atlanta – didn’t leave their host cities in debt. In some cases, the Games can actually drive tourism down; hotel bookings in Beijing were lower than normal during the summer of 2008, when China hosted the Games, and the 2004 Games in Athens proved to be a drain on Greek tourism as non-Olympic travellers opted to go elsewhere rather than brave the crowds.

Bird’s Nest stadium costs the Beijing USD11 million a year to maintain.

Bird’s Nest stadium costs USD11 million a year to maintain. Photo by N. Rupich.

Another drawback to inviting several thousand visitors to your country’s doorstep is the displacement felt by those who already live there. Residents of Albertville, France, were saddled with tax increases as high as 15 percent in the run-up to the 1992 Winter Games, and many London business owners complained of slumping sales during the 2012 Games when the tourists failed to show up, and Britons either stayed at home or fled the country entirely. (The British government even went so far as to launch a EUR4.8 million campaign to encourage Britons to travel within the country during the Games rather than escape abroad.)

And then there’s the uncomfortable question of what to do with all those sparkly new Olympic facilities once the Games are over. Six years after the Beijing Olympics, China is still trying to find a permanent tenant for its USD481 million, 91,000-seat Bird’s Nest stadium, which costs the city USD11 million a year to maintain. Almost all of the 22 stadiums built for the Athens Games are unoccupied, and Sydney still spends millions each year to maintain the largely unused facilities it built for the 2000 Olympics.

But while hosting the Olympics can be a lot of long-term doom and gloom, some cities see nothing but boom. For many, hosting the Olympics is a great chance to kick-start infrastructure improvements. Athens took the Games as an opportunity to build a much-needed subway system. In 2000, Sydney transformed a dump into a massive multi-purpose stadium, an aquatic center, a tennis complex, and an indoor arena. Torino used the 2006 Winter Games to rehabilitate older buildings and arenas rather than build new ones. Instead of tearing down their multi-million-dollar sliding tracks, cities like Calgary, Lake Placid, and Salt Lake City have instead transformed themselves into the preferred training grounds for successive generations of elite athletes.

Sydney Olympic Aquatic Centre. Photo by Edwin.

Sydney Olympic Aquatic Centre. Photo by Edwin.

But for most cities, the spectacle of the Games offers a unique opportunity to introduce (or rebrand) themselves to the world. Case in point: Barcelona, site of the 1992 Summer Games. Thanks to frugal planning (Barcelona went so far as to repurpose a 30,000-seat stadium, brick by brick, from Albertville), largely error-free execution, and the city’s already charming atmosphere, the Games helped launch a tourism renaissance in the Catalonian capital. Tourist traffic doubled between 1991 and 2000, and by the turn of the century, Barcelona had stepped out of Madrid’s shadow to become the third-most visited city in Europe, behind only Paris and London. Mexico City, Tokyo, and Seoul also came out the better for their Olympic experiences, using the Games as an opportunity to establish themselves as both travel destinations and business capitals.

Will the Winter Games put Sochi on the map or drown it in debt forevermore? At this point, no one knows for sure. But for two magical weeks, Sochi is the centre of the world. And for those lucky and talented few that came and saw and conquered here, every ruble was money well spent.

 

One Comment »

  1. Caitlin February 17, 2014 at 9:28 pm - Reply

    Would have loved to see the 2010 Olympics hosted by Vancouver included in this discussion!

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