The cost of hosting The Olympic Games
The Cost of Hosting The Olympic Games
"The most important thing in the Olympic Games is not to win but to take part, just as the most important thing in life is not the triumph but the struggle. The essential thing is not to have conquered but to have fought well."
This quote was taken from a speech given by Bishop Ethelbert Talbot at a service for Olympic champions during the 1908 Olympic Games, held in London, England. It is designated as the official creed of the Olympics. It is meant to inspire athletes to embrace the true Olympic spirit of competition, not just success.
However, when it comes to being selected as the location deemed most suitable to host the Olympic Games, just taking part is not nearly enough. Nothing short of successfully earning the right to serve as the host city is acceptable.
At stake are billions of dollars. Earn the privilege to host the games and you now have the ability to showcase your city on a world stage. The cash infusion you receive to prepare for the influx of the global community allows you to tend to long desired, but sometimes forgotten plans of revitalizing parts of your geographical area; infusing them with new infrastructures, civil services and tax revenues that prove too tempting to be left out of the bidding process.
But, and with billions of dollars out there for the taking there is always a but, does being the staging point for the Olympic Games serve as more of a detriment to the city than a boon?
Since 1992, when the Summer Games were held in Barcelona, Spain, major urban cities have served as the hosts. In 1996, Atlanta, Georgia, the 2000 Games in Sydney, Australia and 2004 in Athens, Greece. Future hosts of the Summer Games include Beijing, China in 2008 and the Games return to London in 2012.
Pere Duran, General Director of the Turisme de Barcelona Consortium (Tourism Director), did a 10-year study on the effects of the Olympics on tourism and published his findings in 2002.
In his book, Mr. Duran states, “There can be no doubt that the Olympic Games mark a “before and after” as far as tourism in Barcelona is concerned. Now, Barcelona is a highly popular tourist destination, and it enjoys a very positive image among visitors, whether they come for business or leisure.”
He goes on to say, “The Games saw updating of all the city’s tourist infrastructure, both quantitatively and qualitatively. Indeed, at the conclusion of the Games there only remained one major piece of infrastructure pending: a City Convention Centre. The aftermath of the Games saw no let up in the drive to equip the city, indeed it still goes on: Barcelona continues to improve the range and quality of its tourism infrastructure.”
Mr. Duran closes his report with, “The Games played a role in knocking Barcelona into shape, and ever since then the city has kept fit, showcasing its virtues through the ideal channels. What other explanation can there be for the fact that Barcelona’s tourism grew 7.6% in 2001, when the world and European tourist figures underwent historical slumps with drops of the order of 1.3% and 1%, respectively?”
Clearly the success of tourism in Barcelona is attributed directly to hosting the Olympic Games. But not all cities encounter the same Olympic-hangover effect.
During the 2004 Games in Athens, the initial budget was projected at 4.5 billions euro, while the actual budget came in at just under 9 billion euro. In today’s euro-to-dollar conversion rate, that final figure is the equivalent of nearly 13 billion dollars.
Already the 2012 Games in London are experiencing a similar fate as their Athens counterpart. In the bidding process in 2005, London organizers estimated their budget would be approximately 2.4 billion euro. Estimates released in early 2007 by Culture Secretary Tessa Jowell put the revised budget at 9.35 billion euro. This new figure is nearly four times the original estimate and is worth 13.3 billion dollars. Most of the new money is being used for construction of venues.
In the case of Chicago, which is bidding to host the 2016 summer games, the cost has been portrayed at roughly 5 billion dollars. This lower figure is attributed to the vast amount of venues and infrastructure in place already, with Chicago having approximately 50,000 hotel rooms available in the downtown area alone.
The Chicago Urban League is also solidly behind the 2016 Olympic bid, which has allowed organizers to play up their involvement and the benefits to poorer communities. In a June, 2007 report, the Chicago Urban League noted that “In support of the bid and the Mayor’s position, Chicago 2016 organizers wrote that they view the Games as a “catalyst for widespread urban revitalization.” The three largest construction projects associated with the Games – the Aquatic Center, the Olympic Village and the Olympic Stadium – are planned to be built in predominantly African American neighborhoods.”
The Chicago Urban League have also focused heavily on the 1996 Summer Games in Atlanta as a template for their work given the substantial similarities of the inclusion of African-Americans in the business model for the games. For instance the Chicago Urban League states, “H.J. Russell & Co., the nation's largest African-American contractor, positioned itself as a partner in joint ventures with other majority-owned construction firms. Together they were able to secure 29% of the $207 million Olympic stadium contract in addition to smaller joint ventures in other contracts such as the Centennial Olympic Park and the Coca-Cola Olympic City Theme Park.”
They also point out, “Building the Olympic Stadium in Washington Park should not, by itself, be seen as a growth catalyst. But real estate prices traditionally rise in the areas closest to Olympic venues. In Washington Park infrastructure and transit improvements are necessary pre-conditions for growth. Real estate remains cheap in comparison to much of the city. While detached single family home prices rose 200% or more in nearby Hyde Park, Kenwood, Oakland and Woodlawn (between 1994 and 2004), Washington Park prices fell 49%. Approximately 78% of Washington Park households had annual incomes below $35,000 while 25% of residential units in Washington Park were vacant. With a median income of $15,160, 25% of Washington Park’s households received some type of public assistance. Washington Park’s rate of unemployment is 21.1%”
The biggest concern facing the community around the proposed Washington Park site could be the possible displacement of low-income residents currently residing there to make way for the new facilities that will be necessary to host the games in that proposed location.
According to a study authored by the Centre on Housing Rights and Evictions “2,077 units of public housing were destroyed in Atlanta, while displacing 5,813 residents. This made way for the Olympic Village and Olympic Stadium. Another 10,000 units were lost to increases in rents, code enforcements and demolitions, displacing an estimated 25,000 people.” With annual incomes in some poor Atlanta communities averaging about $15,000 in 1996 and with poverty rates as high as 30 percent, the majority of displaced residents could not afford the new housing units built near the Olympic Village and Stadium.
This scenario gives the community around Washington Park pause in supporting the bid fully as they envision having to go through this exact scenario if Chicago were to be awarded the 2016 Games.
The high cost over-runs inevitably cause most cities more headaches, doing more damage in the long-run than the benefits could possibly out-weigh. However, staging the Games is viewed as a significant achievement, one that many cities would love to have.
Despite the major influx of cash that could help any host city boost it’s Gross Domestic Product, no African, South American, Central Asian or South Asian nation has ever been chosen as host for the Olympics. Thus adding credence to the notion that with the Olympics, the rich are getting richer.
"The most important thing in the Olympic Games is not to win but to take part, just as the most important thing in life is not the triumph but the struggle. The essential thing is not to have conquered but to have fought well."
This quote was taken from a speech given by Bishop Ethelbert Talbot at a service for Olympic champions during the 1908 Olympic Games, held in London, England. It is designated as the official creed of the Olympics. It is meant to inspire athletes to embrace the true Olympic spirit of competition, not just success.
However, when it comes to being selected as the location deemed most suitable to host the Olympic Games, just taking part is not nearly enough. Nothing short of successfully earning the right to serve as the host city is acceptable.
At stake are billions of dollars. Earn the privilege to host the games and you now have the ability to showcase your city on a world stage. The cash infusion you receive to prepare for the influx of the global community allows you to tend to long desired, but sometimes forgotten plans of revitalizing parts of your geographical area; infusing them with new infrastructures, civil services and tax revenues that prove too tempting to be left out of the bidding process.
But, and with billions of dollars out there for the taking there is always a but, does being the staging point for the Olympic Games serve as more of a detriment to the city than a boon?
Since 1992, when the Summer Games were held in Barcelona, Spain, major urban cities have served as the hosts. In 1996, Atlanta, Georgia, the 2000 Games in Sydney, Australia and 2004 in Athens, Greece. Future hosts of the Summer Games include Beijing, China in 2008 and the Games return to London in 2012.
Pere Duran, General Director of the Turisme de Barcelona Consortium (Tourism Director), did a 10-year study on the effects of the Olympics on tourism and published his findings in 2002.
In his book, Mr. Duran states, “There can be no doubt that the Olympic Games mark a “before and after” as far as tourism in Barcelona is concerned. Now, Barcelona is a highly popular tourist destination, and it enjoys a very positive image among visitors, whether they come for business or leisure.”
He goes on to say, “The Games saw updating of all the city’s tourist infrastructure, both quantitatively and qualitatively. Indeed, at the conclusion of the Games there only remained one major piece of infrastructure pending: a City Convention Centre. The aftermath of the Games saw no let up in the drive to equip the city, indeed it still goes on: Barcelona continues to improve the range and quality of its tourism infrastructure.”
Mr. Duran closes his report with, “The Games played a role in knocking Barcelona into shape, and ever since then the city has kept fit, showcasing its virtues through the ideal channels. What other explanation can there be for the fact that Barcelona’s tourism grew 7.6% in 2001, when the world and European tourist figures underwent historical slumps with drops of the order of 1.3% and 1%, respectively?”
Clearly the success of tourism in Barcelona is attributed directly to hosting the Olympic Games. But not all cities encounter the same Olympic-hangover effect.
During the 2004 Games in Athens, the initial budget was projected at 4.5 billions euro, while the actual budget came in at just under 9 billion euro. In today’s euro-to-dollar conversion rate, that final figure is the equivalent of nearly 13 billion dollars.
Already the 2012 Games in London are experiencing a similar fate as their Athens counterpart. In the bidding process in 2005, London organizers estimated their budget would be approximately 2.4 billion euro. Estimates released in early 2007 by Culture Secretary Tessa Jowell put the revised budget at 9.35 billion euro. This new figure is nearly four times the original estimate and is worth 13.3 billion dollars. Most of the new money is being used for construction of venues.
In the case of Chicago, which is bidding to host the 2016 summer games, the cost has been portrayed at roughly 5 billion dollars. This lower figure is attributed to the vast amount of venues and infrastructure in place already, with Chicago having approximately 50,000 hotel rooms available in the downtown area alone.
The Chicago Urban League is also solidly behind the 2016 Olympic bid, which has allowed organizers to play up their involvement and the benefits to poorer communities. In a June, 2007 report, the Chicago Urban League noted that “In support of the bid and the Mayor’s position, Chicago 2016 organizers wrote that they view the Games as a “catalyst for widespread urban revitalization.” The three largest construction projects associated with the Games – the Aquatic Center, the Olympic Village and the Olympic Stadium – are planned to be built in predominantly African American neighborhoods.”
The Chicago Urban League have also focused heavily on the 1996 Summer Games in Atlanta as a template for their work given the substantial similarities of the inclusion of African-Americans in the business model for the games. For instance the Chicago Urban League states, “H.J. Russell & Co., the nation's largest African-American contractor, positioned itself as a partner in joint ventures with other majority-owned construction firms. Together they were able to secure 29% of the $207 million Olympic stadium contract in addition to smaller joint ventures in other contracts such as the Centennial Olympic Park and the Coca-Cola Olympic City Theme Park.”
They also point out, “Building the Olympic Stadium in Washington Park should not, by itself, be seen as a growth catalyst. But real estate prices traditionally rise in the areas closest to Olympic venues. In Washington Park infrastructure and transit improvements are necessary pre-conditions for growth. Real estate remains cheap in comparison to much of the city. While detached single family home prices rose 200% or more in nearby Hyde Park, Kenwood, Oakland and Woodlawn (between 1994 and 2004), Washington Park prices fell 49%. Approximately 78% of Washington Park households had annual incomes below $35,000 while 25% of residential units in Washington Park were vacant. With a median income of $15,160, 25% of Washington Park’s households received some type of public assistance. Washington Park’s rate of unemployment is 21.1%”
The biggest concern facing the community around the proposed Washington Park site could be the possible displacement of low-income residents currently residing there to make way for the new facilities that will be necessary to host the games in that proposed location.
According to a study authored by the Centre on Housing Rights and Evictions “2,077 units of public housing were destroyed in Atlanta, while displacing 5,813 residents. This made way for the Olympic Village and Olympic Stadium. Another 10,000 units were lost to increases in rents, code enforcements and demolitions, displacing an estimated 25,000 people.” With annual incomes in some poor Atlanta communities averaging about $15,000 in 1996 and with poverty rates as high as 30 percent, the majority of displaced residents could not afford the new housing units built near the Olympic Village and Stadium.
This scenario gives the community around Washington Park pause in supporting the bid fully as they envision having to go through this exact scenario if Chicago were to be awarded the 2016 Games.
The high cost over-runs inevitably cause most cities more headaches, doing more damage in the long-run than the benefits could possibly out-weigh. However, staging the Games is viewed as a significant achievement, one that many cities would love to have.
Despite the major influx of cash that could help any host city boost it’s Gross Domestic Product, no African, South American, Central Asian or South Asian nation has ever been chosen as host for the Olympics. Thus adding credence to the notion that with the Olympics, the rich are getting richer.
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