The upcoming Paris Games are estimated to cost at least €9 billion (A$14.5 billion), sparking debates on the value of hosting the Olympics. Proponents argue that hosting brings economic stimulus, infrastructure development, boosts tourism, and soft power. However, the history of the Olympics shows that the economic benefits rarely outweigh the costs, leaving soft power as a balancing factor.
One argument for hosting the Olympics is the fiscal stimulus it provides for the host city. The long lead time from bid to event means that public spending cannot effectively balance out the business cycle. The value lies in the infrastructure built for the event, which can have long-term economic returns. While the Games boost tourism, evidence of sustained increases in tourist numbers is limited, except for the 1992 Barcelona Games.
Investments in infrastructure for past Olympics, such as the 1956 Melbourne and 2000 Sydney Games, have had long-term benefits. However, the construction costs tend to be higher due to the concentrated demand for workers and supplies during Olympic preparations. Purpose-built facilities are costly to maintain and often underutilized outside of major events. Despite these challenges, hosting the Olympics tends to increase interest in sports and enables global sporting achievements.
The cost of hosting the Olympics heavily depends on funding from various sources, including higher levels of government and the private sector. With governments facing fiscal pressures, justifying the expense of hosting such events is becoming increasingly difficult. The soft power argument for hosting the Olympics has been demonstrated through political boycotts and protests, but the Games also offer an opportunity for diplomatic dialogue on a global stage.
Despite the questionable economics and mixed soft power impact, the allure of hosting the Olympics persists for many governments. Just like the Olympics, industry policies can be politically appealing but should undergo thorough scrutiny before implementation. Ultimately, hosting the Olympics goes beyond the value to the host country, offering hope for international cooperation and peaceful conflict resolution on a global scale.
