Tourism
An increase in tourism to the host city can be an immediate benefit of hosting the Olympic Games. Once a host city has been chosen, it may experience new levels of international exposure and prestige that draw crowds of tourists both before and after the Olympics. Those tourists will spend money on the hotels, restaurants, and entertainment in the host city. This money provides a significant boost to a city’s economy.
Construction
Billions of dollars must be spent on new facilities and infrastructure for the Olympics. Because building sports arenas takes a lot of workers and materials, many levels of the city’s economy can benefit from all the new construction. Hundreds of construction jobs are created, and many support industries, such as electrical and plumbing companies, will see an increase in business. Improved infrastructure can also provide a city with greater economic capacity. Better roadways, as well as improved airports and seaports, can raise a city’s productivity, leading to a stronger ec onomy.
International Prestige
Once it is announced that a city is competing to host the Olympics, or when it is actually awarded the event, that city is immediately recognized as an attractive place in which to live or do business. As a result of this global attention, the city is able to establish new business relationships with international partners that can have a lasting positive affect on the host city’s economy.
Costs
Preparation Spending
It takes billions of dollars to prepare the city for the Olympic Games. When the city is not able to secure the necessary amount of private funding and sponsorship for new stadiums, media facilities, and infrastructure, it can incur a large post-Olympic debt. For example, preparations for the 1976 Olympic Games in Montreal, Canada, were paid for with public funds. Budgetary shortages created a financial disaster, and taxpayers in Montreal were not able to pay off the Games until 2006.
Maintenance of Facilities and Infrastructure
Building new facilities for the Ol ympics creates jobs and stimulates the local construction sector of a city’s economy. But what happens to those new facilities when the Games are over? Maintenance can cost millions of dollars a year. If the Olympic facilities are not used for future sporting or entertainment events, they quickly become a drain on the city’s economy.
Lost Opportunities
When a city decides to bid for a chance to host the Olympic Games, it gives up the money that could be used to benefit its citizens or boost its economy in other ways. If a city decides to bid to host the Games and is successful, it must find ways to integrate the new facilities and infrastructure in ways that provide for long-term economic growth.