The costs of hosting the Olympics have grown dramatically in recent decades. Many economists argue that the benefits of hosting are exaggerated and that host cities are left with large debts. The 2024 Paris Olympics could be a test of whether reforms to the process have made hosting a better deal.
Costs For Hosting the Olympics
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.
- London spent $14.6 billion to host the Olympics and Paralympics in 2012, with $4.4 billion coming from taxpayers.
- Beijing spent $42 billion on hosting in 2008.
- Athens spent $15 billion on the 2004 Olympics.
- Sydney paid $4.6 billion for the 2000 Olympics, with taxpayers covering $11.4 million.
- Rio de Janeiro paid over $20 billion for the 2016 Olympics.
Once a city wins a bid, it typically incurs costs for infrastructure improvements, such as roads, airports, rail lines, housing for athletes, and at least 40,000 hotel rooms. Then, infrastructure costs may range from $5 billion to $50 billion.
Hosting Benefits
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 regions, forecast the value of economic benefits of upcoming Games editions. The size of the impact is dependent on local market conditions and the individual context of each event. In all cases, from Paris 2024 to Milano Cortina 2026, LA28, and Brisbane 2032, the economic benefits for the city, region, and country are predicted to far outweigh the Games-related investments.
The IOC makes a significant contribution in cash, services, and value-in-kind to the success of each edition of the Olympic Games and Youth Olympic Games. This stimulates the regional and national economy and generates government revenues, which help to compensate for any public investments.
The IOC assists Organizing Committees for the Olympic Games (OCOGs) in many other ways, including providing daily support and expertise. The IOC is in charge of broadcasting the Games and ensures the delivery of host broadcasting operations.
As per the Olympic Host Contract, the IOC requires that all Organizing Committees provide annual financial statements certified by an independent certified public accountant.
Ninety per cent of the IOC’s revenue is re-distributed to the global Olympic Movement. The IOC gives a total of USD 4.2 million to Olympic stakeholders such as Organizing Committees for the Olympic Games, National Olympic Committees, International Federations, and athletes. It is important to differentiate between the cost of organizing the Games, which is almost entirely privately funded, and long-term capital investments, which represent a city, region, or country planning for its future. There is no Games-required capital investment by the city, region, or country, and hosts are encouraged to use existing venues, even if these are located outside the main hosting region.
To ensure the greatest possible legacy, it is very important for the IOC that hosting the Olympic Games aligns with the host’s existing long-term social and economic development plans, as well as the goals of the Olympic Movement – set out by Olympic Agenda 2020 and Olympic Agenda 2020+5 – and the United Nations Sustainable Development Goals.
The Olympic Games have a tremendous power to help hosts shine a spotlight on key issues. Governments and other stakeholders can achieve maximum impact by combining different funding sources and ambitions with the timeline for the Games. Hosting the Games can also contribute to achieving wide-ranging social and environmental benefits.
Hosting Drawbacks
Job creation from hosting the Olympics does not always meet expectations.
- Salt Lake City added only 7,000 jobs for the 2002 Olympics, about 10% of the projected number.
- Most jobs went to already employed workers, not significantly affecting unemployment rates.
- Profits from construction firms, hotels, and restaurants often flow to international companies rather than the local economy.
Income from the games often covers only a portion of expenses.
- London 2012 Summer Olympics brought in $5.2 billion but spent $18 billion.
- Vancouver 2010 Winter Games brought in $2.8 billion but spent $7.6 billion.
- Beijing 2008 Summer Olympics generated $3.6 billion but spent more than $40 billion.
Los Angeles is the only host city to have realized a profit from the games, mostly due to existing infrastructure.
Debt Resulting From Olympic Facilities
Many arenas constructed for the Olympics represent ongoing expenses.
- Sydney’s stadium costs $30 million annually in maintenance.
- Beijing’s Bird’s Nest arena costs $10 million annually.
When a city borrows to finance construction, it can be responsible for repayment long after the games. Montreal, for example, finished paying off its debt from the 1976 games in 2006. Facilities created for the Athens 2004 Olympics contributed to Greece’s debt crisis and remain empty.
Olympic Costs
The 1976 Olympics in Montreal
Montreal’s estimated costs of $360 million fell short of the final $1.6 billion bill, leaving a 30-year legacy of debt and decaying venues.
The 2004 Olympics in Athens
The event cost an estimated $15 billion, significantly exceeding the original budget, partly due to additional security costs post-9/11. This contributed to Greece’s ongoing economic woes.
The 2016 Olympics in Rio de Janeiro
Concerns over the Zika virus led to many athlete withdrawals and spectator absences. The Brazilian government spent $13.1 billion to host, $3.5 billion over budget and incurred $8.2 billion in infrastructure costs.
The 2020 (2021) Olympics in Tokyo
Japan won the 2020 games with a $12 billion bid. The COVID-19 pandemic delayed the games, adding $2.8 billion to the total outlay, exceeding $15 billion. The ban on spectators further reduced expected tourism revenue.
How To Affect the Economy?
Hosting the Olympics can stimulate infrastructure development, draw tourism dollars, and boost employment. However, many games fail to deliver projected economic benefits, leaving host cities with debt and defunct facilities.
Is Paris 2024 on Budget?
As of January 2024, the Paris Olympics was on track to meet its cost goals, with an aim to have 95% of infrastructure either existing or temporary to keep costs low.
The 2024 Olympics Cost?
The original budget for the 2024 Paris Olympics was set at 8 billion euros or $8.2 billion USD.
Hosting the Olympics often results in severe economic deficiencies for cities. Unless a city already has the infrastructure to support the influx of visitors, not hosting the Olympics may be the best option. However, with careful planning and alignment with long-term social and economic development goals, the Olympics can also provide significant benefits and opportunities for growth and development.
How do think that the Olympics bring the wealthy back to the city hold it?
