The 2008 Olympic Games in Beijing cost $45 billion to stage, but made only $3.6 billion in revenue. Is the expense worth it?
Is hosting the Olympics all that it’s cracked up to be? While Queensland is in the box seat to host the 2032 Games, most countries around the world are washing their hands of the mega event, labelling it a great big waste of money.
For all the perceived privileges that come with hosting the Olympics, the fact is they aren’t cheap. The only Games to make a surplus since 1970 is the Los Angeles Olympics in 1984. Every other Olympics over the last five decades has made a loss.
This is no surprise when you consider just how much some cities have spent on bidding, preparing for and hosting the event. Beijing’s summer Games spent a whopping $45 billion in 2008, only to be outdone by the 2014 Sochi Winter Games, which reportedly blew out to over $50 billion. The most recent summer Olympics, hosted in Rio, cost an estimated $20 billion.
Even bidding for the Games comes at a cost. Tokyo, which will host the upcoming Games, spent over $150 million on its failed 2016 bid and about half as much for its successful 2020 bid.
The idea of hosting the world’s biggest sporting event seems irresistibly tantalising, but many argue it’s a waste, wondering aloud if the money could be better spent on other important aspects of community life such as building new hospitals, schools and roads, or investing in public transport and other vital services and industries.
And it appears the idea that the Olympics are not worth the money is winning the day. The bidding process for the 2024 Summer Games was a calamity for the International Olympic Committee.
After Boston, Budapest, Hamburg and Rome all withdrew their bids, only two cities, Los Angeles and Paris, remained in the running. Upon withdrawing their bid, Boston Mayor Marty Walsh defiantly stated: “No benefit is so great that it is worth handing over the financial future of our city.”
Given the distinct lack of enthusiasm for hosting the Olympics, the IOC declared the two remaining cities joint winners, with Paris set to host in 2024 and LA in 2028.
The situation was similarly underwhelming in bidding for the 2022 Winter Games. After Oslo followed bids from Sweden, Germany, Poland and Switzerland in deciding to dodge the estimated $US5.4 billion-bill to host Winter Games, only Beijing and Almaty in Kazakhstan remained in the race. Depending on how you look at it, Beijing either won the day, or Almaty dodged a financial bullet.
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Of course, it’s not all bad news for the countries that end up with the once prized hosting rights. The biggest expense is undeniably infrastructure – building stadiums, accommodation, roads and railway lines. If a city already has the majority of these, as the Queensland bid claims it has, they’re well on their way to reducing costs.
And the prestige and the honour of hosting the Olympics is still relevant. Many host nations and cities have used the Olympics to attract tourists and draw the eyes of the world to their cities, culture, lifestyles and attractions in the hope they’ll one day visit.
This notion shouldn’t be underestimated. If South East Queensland was to host the 2032 Games, it would attract up to 11,000 athletes from 206 countries, with over 3.2 billion people from around the world watching on.
Some governments have used the Olympics to revitalise their cities. Barcelona, for example spent 83 per cent of its 1992 Olympic budget on city infrastructure – including building accommodation and four new ring roads – and only 17 per cent on sports to transform the entire city. The transformation helped turn the city into Europe’s sixth-most desirable tourist destination, which now benefits the economy year on year.
Yet for all of that, it’s hard to go past the fact while the Beijing Olympics cost over $45 billion, it made only $3.6 billion in revenue. While not quite as extreme, the 2012 London Olympics cost approximately $15 billion for a return of $5.2 billion. Back in the year 2000, the Sydney Games cost the public up to $2 billion.
Is it all worth it? If successful, Queensland will be able to answer the question in 2032. And let’s be honest, they are almost a shoe-in to win, because if recent history tells us anything, it’s that if they stay the course, they may be the last bid standing.
