The number of cities interested in hosting the Olympics is falling – the authorities are scrambling to change this.
Many of the world’s best athletes are currently competing in the first Olympic Games to be held in Paris since 1924. The French capital is buoyant with excitement and its local businesses filled with paying tourists from all over the world. Indeed, it’s difficult not to be tempted into booking a weekend getaway to see the spectacle up close.
But are the Olympics really a good deal for host cities? The evidence suggests a resounding no. Host cities almost always blow their budget on the Games, having to invest heavily in specific sporting facilities, as well as accommodation and transportation for the influx of athletes and tourists.
The delayed Tokyo Games in 2021, for example, ended up costing an estimated US$15.4 billion (£12 billion), exceeding the proposed budget by 244%. And it was a similar story four years before – the Rio Olympics cost 352% more than the initial proposal.
As part of the bidding process to stage the Games, potential host cities and governments are required to guarantee that they will cover these costly overruns. So, given the financial drain a home Olympics so often proves to be, it is no surprise that there has been a steady decline in the number of formal bids to host the Games over the past decade.
A total of 11 cities submitted applications to host the 2004 Athens Olympics, followed by ten bids for Beijing in 2008 and nine for London in 2012. After London there was a significant reduction. The 2016 Olympics was awarded to Rio from just four bids, 2020 went to Tokyo from three and there were only two bids submitted by cities wanting to host the 2024 Games.
This declining interest prompted the International Olympic Committee (IOC) to award the 2028 Olympics to Los Angeles, the only other bidder for the 2024 Games, without undertaking a public bidding process.
The reduced interest in hosting the Games has been influenced in large part by negative public opinion. The cost of the 2004 Olympics, for example, was thought by many to have triggered Greece’s financial crisis.
Within days of the closing ceremony, Greece warned the euro area that its public debt and deficit figures would be worse than expected. It subsequently posted a deficit more than double the eurozone limit and years of economic hardship followed. More than 400,000 people emigrated, by 2013, the unemployment rate for people aged under 25 had reached 58%.
There is also a feeling among the public that the cost of hosting the Olympics will ultimately land at the feet of the taxpayer. Montreal, which hosted the Games in 1976 and where a mammoth US$1.1 billion was spent on a new Olympic stadium alone, famously needed decades to pay off its debt.
Fear of the massive costs involved led both Boston and Budapest to withdraw their bids to host the 2024 Olympic Games, citing a lack of public support and strong political objections. In 2015 the then mayor of Boston, Martin Walsh, said hosting the Games was “a commitment that I can’t make without ensuring the city and its residents will be protected.” He added: “I refuse to mortgage the future of the city away.”
In Budapest, more than 250,000 people signed a petition demanding that the city drop its bid and direct the money towards building modern hospitals and well-equipped schools.
Read more: Tokyo's Olympic legacy: Will hosting the Games have benefitted local communities?
But the Games are not always accompanied by a bleak legacy. In 1984, the Los Angeles Olympics was held using almost entirely preexisting infrastructure. And that year, the Games turned a US$215 million profit. There are reasons to believe Paris could follow suit. The organisers have as far as possible made use of existing facilities and low-cost temporary venues.
This includes a stadium in the shadow of the Eiffel Tower on the Champ de Mars that will host the beach volleyball. And, so far, the cost of Games looks to have stayed close to the original budget of US$8.5 billion.
Hosting the Games can also provide lasting benefits for local communities to inherit, regardless of the cost. The London 2012 Olympics, for example, provided new facilities, housing and transports links that have contributed to the regeneration of the city’s eastern boroughs. In a poll conducted ten years after the Games, two-thirds of London adults agreed that hosting the Olympics had left a positive legacy.
The IOC has now reformed its host bidding process by creating a less public campaign for prospective host cities. In 2021, Brisbane won the right to host the 2032 Games having been the first city to go through this new process.
The rationale behind this change was to stop cities trying to outbid each other competitively, which has previously caused excessive expenditure. There is hope this will eventually improve the damaged public perception of hosting the Games.
Rather than the city having to adapt to the Games, the IOC has highlighted that there will be a greater emphasis on the games adapting to the city in the future. The plan for Los Angeles in 2028 is for every venue to either exist already or be temporary, which should have a dramatic effect on expenditure.
Read more: Looking back at the Olympic venues since 1896 – are they still in use?
This increased flexibility allows governments to discuss the feasibility of hosting with the IOC without having to propose excessive and expensive changes to their cities.
Some feel these changes are not enough. There is a belief among economists that low and middle-income countries should spare themselves the potential burden, and wealthier countries who can better absorb the costs should be the only viable hosts.
However, it’s important to remember that the Olympics has never been a cash machine. It is an event steeped in historical importance formed to promote talent excellence, respect and friendship – not to drive economic gain to a city directly.
Borja García received funding in 2018-2019 from the International Olympic Committee to research relations between National Olympic Committees and national governments.
Sid Panayi does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
