http://www.nytimes.com/2014/02/06/business/economy/the-olympics-a-costly-feel-good-moment.html?ref=economy
This year's winter olympics costed more than $50 billion, the largest expense for an olympic games thus far. This averages out to about $510 million per event. The cost of olympic games has increased drastically over the years. In the 1984 Los Angeles games, the entire thing costed about 1.2 Billion dollars in today's money.
While the olympics are for sure a tourist attraction that will stimulate the economy of the host, the olympics can only stimulate so much. $50 billion is an enormous amount of money for an event, and it is doubtful that that money will be pumped back into the economy.
Before reading this article, I thought that the Olympics would have a positive economic impact on the host country (economically) and I think that there must be some way to harness this growth. The article stated that the cost of the games is doubtful for a large economic success and the biggest hope is that the games will turn the city into a tourist destination for a long term period, in the hope to bring in revenue. The part that I thought was funny was that it seems to be that countries only host because it makes people "feel good". I do think that this is something important to think about; good, positive moral is important!!
ReplyDeleteThe reason a country put so much money into such events is for national pride, and not really to make a profit out of it. This display of pride is meant to show the world their culture and traditions, not only that, but their dominance on the world stage. China in 2008 Olympics spent approximately $42 billion and has not seen a return investment as of yet.
ReplyDeleteThis article was interesting to read in the light of recent news out of Russia. Tweets from journalists in Sochi highlight the poor conditions they are living in, though often they do so with humor. One would think that if the government was investing so much into the games, they would have at least ensured that the hospitality index is up to par.
ReplyDeleteI also find it doubtful that the $50b spent will be recuperated back into Russia. The cost of the games is huge. I agree with Yingling that national pride probably has a lot to do with the fact that Russia spent that much money. There are some cases where these huge investments are great for the country and the city that holds the games. In the 1992 games in Barcelona there were 50 years of civic improvements in 5 years before the games. However in Athens, 2004 games, much of the venues are in disrepair and fenced off from the public. I just can't see too many people trying to go to Sochi to visit stadiums and hotels that are getting such a bad rap right now.
ReplyDeleteThis article talks about what happens to the Olympic venues after the games.
http://www.npr.org/blogs/pictureshow/2013/06/21/194199546/what-happens-to-an-olympic-city-after-the-olympics
Russia will be able to get gains such as broadcasting of the game, an advertisement of Russia and cheering Russian. It is true that it is doubtful whether Olympic investment can stimulate the economy of Russia or not, but in the future the investment will be returned. In 1964, Japan hold theOlympics. Japan was developping countries,and so made an investment in its infrastructure. That was huge,but I think that holding the Olympics connect to development of Japan.Japanese children who watched the games on real time supported high economic growth of Japan. I want to say that Russian did right things.
ReplyDeleteWith a price tag of approximately 50 billion it is unrealistic to think that Russia would be able to make that money back through "stimulating the economy". The reason why it has become so expensive is because everyone is trying to one up each other. Every host country is looking to prove to the rest of the world how great they are and as a result we can see the exponential increase in Olympic expenditures. It's the same reason we have the games to begin with. Each country wants to prove that they're best!
ReplyDeleteI agree with the idea that the Olympics is costing so much because of the pride factor. But also every time the Olympics is hosted in any countries city, That countries spends so much money to improve, renovate, and make the city presentable for the Olympics. When the US was trying to get the Olympics hosted in Chicago, there is a part where renovations were beginning because the government was in the process of making it presentable for the Olympics. Also the reason why Sochi is costing so much is that it is originally a tropic area. Much of this money was necessary to turn a tropical beach holiday destination on the Black Sea coast into a venue for winter sports. Sochi is situated on the same geographical latitude as St. Tropez on the Mediterranean Sea in France - rarely do temperatures drop below 37 degrees Fahrenheit.
ReplyDeleteI also agree that i don't believe the Russian economy will come close to 50 billion dollars but like everyone said it is a sign of national pride and since it is broadcast everywhere more people may be inclined to visit down the road. I also know that from sport management classes i have taken that often times all the money they put into building new stadiums or renovating stadiums goes to waste because after everything is gone and down the new stadiums cost to much to maintain. Since they cost to much to maintain a lot of the time these stadiums are tore down so all the money they put into building the stadiums is almost going to waste as they tear these facilities down.
ReplyDelete