The Olympic games first started in 776 BC as a religious festival to honor Zeus in Olympia, Greece. The Olympics were so popular at the time, that when the Persians invaded Greece in 480 BC, the Greek States delayed putting an Army together until after the Olympics. While the modern version of the Olympics has been delayed/canceled before there is still a strong desire not only to put on the Olympics but particularly to host them.
There is a high risk/reward relationship when it comes to hosting the games. Some of the benefits include a boost to local economies through tourism, an increase in the country’s global trade and stature, as well as creating a sense of national pride.
The downside, however, can be devastating. The 2004 Olympic host city of Athens went 60% over budget expecting that the games would lead to long-term gains, thanks to tourism that never happened. Some of the expenditures for the host city go towards infrastructure that never gets used again. According to Scott Davis of bussinesinsider.com, Rio’s Olympic Village cost $700 million in 2016 and has been turned into luxury apartments that are now shuttered. Aside from the financial negative impacts, the Olympics tend to displace and burden residents of the host country and city.
While the games are widely considered a success to the viewers and the athletes, there is much speculation on the lasting effects of
hosting. As we approach the 2021 games in Tokyo we can already see the negative financial implications. Japan has announced a state
of emergency in response to rising COVID-19 cases and will not allow spectators. Due to the lack of tourism and fans allowed, Japan is
already anticipating a loss of $23.1 billion.
Although we’ve recently seen the negative consequences more frequently than the positives, it seems to potential host countries, the risk is worth taking. Potential hosts spend anywhere from $50 million to $150 million just on preparing/presenting their bid to the International Olympic Committee. The ability to display your country’s culture, show the nation’s pride, and compete at the international stage is an amazing opportunity.
Usain Bolt won 8 gold medals in 3 Olympics, and he only ran for less than 115 seconds on the track earning $119 million dollars. That’s an economy of effort. But for those 2 minutes, he trained for 20 years. That’s investment. Think long-term. Patience Pays.