City investment in hosting the Olympics:
The IOC has set a limit on how much a city can spend on hosting the Olympics. If a city spends more than this limit, they are not allowed to host the Olympics.
Benefits of Hosting the Olympics
Organizing the Olympics is not an easy job, so it gives pride and respect to the hosting city. As these cities build up some infrastructures for the event, this creates temporary jobs for the native people that benefit the city in the future. For example, Rio de Janeiro constructed about 15,000 new hotel rooms for the Olympics which is still providing help in uplifting the economy of the respective nation. Hosting the Olympics benefits the city as it increases the level of tourism and foreign investments. Many sponsors, media, athletes, and audiences visit the host city before and after six months of the Olympics, which creates additional revenue for the host city. Hence, these all-factors boons the economy of the host city.
Drawbacks of Hosting the Olympics
The article discusses how job creation in the host city benefits the economy overall, but it also points out that this is not always the case. Sometimes, the job creation seen in the city is only temporary and does not benefit those who are already employed. Many hotels and buildings built for hosting events are created by international companies rather than by the city, earning less money as a result. For example, London spent $5.2 billion on hosting the Olympics yet it made a profit of $18 billion. Los Angeles has been able to gain profit from hosting the Olympics because they have already built infrastructure in place for it.
Olympic results in debt
Many host cities do not have the required infrastructure for the event and so they build an expensive building for it, this building cost can be more than the profit gained by the event. These arenas constructed for the event are not easy to be adjusted with general events other than the Olympics due to their big size or specific nature, as Sydney’s stadium costs $30 million for annual maintenance. There are many hosting cities where the taxpayers had to pay more for filling the debt on their city.
These are some examples of hosting cities that organized the Olympics
The 2004 Olympics in Athens were a watershed moment for the modern Olympic Games. The games were the first to be held in a European city, and they showcased the best of Greece and its athletes. The games were also a major financial success, with ticket sales and broadcast revenues reaching record levels. ..
This city was said to have spent too much money on the event which was about $15 billion, far from the original budgeted amount. Their huge permanent sports venues remain unused these days. Due to the lack of a futuristic plan, Athens is under a debt of 50,000 euros per Greek household, shared and paid by the taxpayers.
The 2016 Olympics in Rio de Janeiro were a global event that took place from August 5-21, 2016. The games were the first time the city of Rio had hosted the Olympic Games. The games were also the first time Brazil had hosted the Olympics.
The Brazilian government was able to reduce the number of athletes participating in the Olympics by adding about 2,000 healthcare professionals, but this created an extra debt. The country lost $7 billion due to less tourism and increased crime. Late salaries in the country caused a decrease in the number of spectators.
Conclusion
The Olympics are not always financially profitable for the host city, but they provide a global platform. Many cities face an economic crisis which in turn puts the whole country under debt. For the benefit of the Olympics, a city with the necessary infrastructure should only host this event to fulfill all its desires for profit. ..
The Olympics are a costly and time-consuming event that can be disruptive to local communities. ..
The large debt burden of the country has negative consequences for its economy and society. It causes economic stagnation, joblessness, and social unrest. It also increases the risk of default on government debt, which could lead to a financial crisis and recession.
