You’re wrong if you think the Olympics are just about athletic competition. If not for profit, why would countries fight to host the Olympics? Hosting the Olympics is undeniably expensive and the costs start long before the first event. If you see Tokyo, spent around $150 million to lose the bidding in the 2016 Olympics and then nearly half the amount again to secure the 2020 games.
The average cost of hosting the Olympics between 2007 and 2016 was $12 Billion. To date, the list of countries that hosted the Olympic Games for summer is 23 cities and 20 countries, and the Winter Olympic Games are 21 cities and 13 countries. The appeal of hosting the Olympics is not only for prestige but also for the generosity of opportunity it brings to the hosting nation.
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In the ancient period, the Olympics were conducted to honor gods. It evolved in the 19th century, After the foundation of the IOC the first modern Olympic Games were held in 1896 in Athens, Greece. In the 1960s Paralympics were introduced. Berlin Olympics turned the Olympics into politics. After that, Japan hosted the Olympics in 1964 transforming from a wartime to a peaceful nation. According to the study, the bidding cost tripled after the 1960s.
In 1976, the Olympics in Montreal witnessed the fiscal risk of hosting. They went into debt some $1.5 billion in debt. It took three decades to pay off the debt. After that in 1988, the Olympics in Los Angeles gained more profits by just using their existing infrastructure. Experts think it’s best if the developed countries host the Olympics, developing countries might struggle severely if something goes wrong.
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Economic Impact
Host cities hope to see economic benefits, such as job creation, increased tourism, infrastructure investments, and sports facilities.
Direct Financial Benefits: The city hosting the Olympics will get a substantial economic boost through ticket sales, sponsorships, and broadcasting. Los Angeles was the last city that turned a profit largely because of their efficient cost management, they reduced the cost by using existing facilities and securing co-operate sponsorship. Los Angeles is hosting the 2028 Olympics, Let’s see what they do this time. The swimming event was held in the outside pool in the 1932 Olympics. The 2008 Beijing Olympics was another city that gained economic strength and modernization leaving a lasting legacy of improved infrastructure and international recognition.
Indirect Financial Benefits: Hosting the Olympics often leads to foreign investment and tourism. Cities like Barcelona and Sydney gained lots of popularity among tourists after their Olympic events. The UK saw fewer international visitors growth compared to the previous year during the London Olympics 2012.
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Global Visibility: Hosting the Olympics attracts millions of tourists which helps the country’s small businesses, hotels, and economy of that city. During the event, the host city becomes the center of attraction drawing media and spectators.
Increase in Diplomatic relations: For all the athletes from various countries, the Olympics serves as a platform for countries to engage in dialogue and cooperation. In the future that relationship can be used for providing jobs, the DTAA treaty, and for citizens living in their country to get benefits from tax exemptions.
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