Hosting the Olympics is considered to be prestigious for developed nations. The Olympics create a high constrain on the economy, So the question arises why do countries want to bid to host the Olympics? For 2016 Olympics, Japan just spend $ 150 million for only submitting the bid even it was unsuccessful and finally got the bid of $ 75 million for 2020 Olympics. Their bid is worth over $ 7 Billion.
How countries need to plan the Olympics?
The delayed Tokyo 2020 Summer Games were already the most expensive Olympics in history, running at 200% over budget on Sep. 7, 2020 though not scheduled to begin until July 2021. Tokyo forecast $7.3 billion in their 2013 bid, but the actual cost is estimated to be $15.84 billion as of Sep. 2020, with costs continuing to rise. A Jan. 2021 study found that losing foreign spectators due to COVID-19 restrictions could cost Japan as much as $23 billion.
Reasons to host the Olympics
One of the reason why countries want to host the Olympics is because it boosts tourism there have been various instances in which the countries have been left with operating surpluses from tourism and broadcasting fees. The recent example is of 2018 Winter games in which South Korea was left with a surplus of $ 55 million which was used to boost the sports facilities in the school. Another great example is of 1984 Summer Olympics in Los Angeles which gave the city around $ 500 million in surplus due to boost in tourism and bradcating rights.
But if badly organized and if the country and the city does not have the infrastructure to host the Olypiucs it can be a bloodbath of money for the country. For 1976, Montral Olympics Canada have to spend $ 17 million to maintain their prestigious Olympics stadium built for the purpose of hosting Olympics. It took over 30 years to run down that costs. Another bad example is of Russia, Sochi hosting thw winter Olympics in 2014.
Many Olympic venues worldwide sit empty, rusted, overgrown with weeds, covered with graffiti, and filled with polluted water. The $78 million Olympic Stadium in PyeongChang for the 2018 Winter Games was set for demolition before the 2018 Games even began. Sydney’s 2000 Olympic Stadium will be demolished in 2019 in favor of a smaller, more useful venue.
Bejing’s 2008 Bird’s Nest Olympic Stadium costs the city $11 million a year to maintain, and the stadium that seats 91,000 mostly sits unused. In Rio de Janeiro, the $700 million athletes village for the 2016 Games was turned into luxury apartments that are now “shuttered” and the Olympic Park is “basically vacant” after failing to attract a buyer.
The next reason of hosting the Olympics is because it creates a sense of national pride when South korea won the bid for 2018 Winter Olympics the whole city came out on the streets to celebrate. Moorad Choudhry, MBA, PhD, Treasurer of the Corporate Banking Division of the Royal Bank of Scotland, stated, “A genuine feel-good factor [of hosting the Olympics] can be very positive for the economy, not just in terms of higher spending but also in productivity at work, which in turn boosts output.”
The Olympics also mean that a lot of people need to be shifted from their home to build the Olympics village. This has been eveident in Rio De Janeiro where moe than 100,000 people were forced to move out of their houses.