Olympics hosting effects on tourism

In examining the high cost of placing a bid or hosting the Olympic Games, cities face a dilemma. Benefits
and risks may not be worth the investments. Data were used from past Olympic successes and failures with
the addition of comparable events and outcomes. Tangible and intangible results were considered in
establishing benefit justification. Studies find that bidding cities as well as host cities seem to benefit
through world recognition; however, the cost is extreme and creates questions about financial risks. Poor
countries seem to be apprehensive due to the capital investments involved leaving opportunity for the
affluent countries to invest money in infrastructure. The attraction of world-wide attention allows the
wealthy countries an opportunity to risk capital with the possibility of stimulating the economy through.
Health Impact:
Health impact assessment is a process that addresses a planning or policy development, predicts population
health with and without the development, consults public opinion and proposes beneficial action It is
related to environmental and other forms of impact assessment and has become an internationally accepted
part of public health practice. Health impact assessment can serve a range of stakeholders, including the
development proposers, the decision-makers and people affected. While both qualitative and quantitative
methods are used, the underlying discipline is epidemiology understanding how identified factors promote
health or cause ill-health in a specified population. There have been assessments of the impacts of transport
on health in London broadly and locally, and a rapid health impact assessment was made for the initial
London Olympic bid. Transport is a structural determinant of health. We have assessed the potential of
transport plans for the 2012 London Olympic Games to achieve the sustainability commitment of
‘encouraging healthy living’,We compared national and London-wide policies against developments
described in the Transport Assessment, a public planning document, for the period of the Games and the
aftermath legacy.  National and London policies recommend modal shift in travel—more walking and
cycling for health benefits, and fewer motor vehicles journeys to reduce harm and risks. For the Games,
most spectators will use public transport, with low pollution and injury impacts and some are predicted to
attend by cycling or walking. Redevelopment of the Olympics site after the Games will provide green areas
for cycling and walking and better public transport, but road traffic is predicted to increase and noise and
air pollution will persist above recommended levels.  Transport planning for the London Olympic Games is
contributing to sustainability. The impact on population health should be measured prospectively.

 Economic Impact of Hosting the Olympics:

The economic impact of hosting the Olympics tends to be less positive than anticipated. Because most
cities have ended up falling massively in debt after hosting the games, cities without the necessary
infrastructure may be better off not submitting bids.

Costs Incurred When Hosting the Olympics

Submitting a bid to the International Olympic Committee (IOC) to host the Olympics costs millions
of dollars. Cities typically spend $50 million to $100 million in fees for consultants, event
organizers and travel related to hosting duties. For example, Tokyo lost approximately $150 million
on its bid for the 2016 Olympics and spent approximately $75 million on its 2020 bid. Hosting the
games is even more costly than the bidding process. For example, London paid $14.6 billion for
hosting the Olympics and Paralympics in 2012. Of that amount, $4.4 billion came from taxpayers.

1|Page
 Beijing spent $42 billion on hosting in 2008. Athens spent $15 billion hosting the 2004 Olympics.
Taxpayers in Athens will continue to be assessed payments of approximately $56,635 annually until
the debt is paid in full. Sydney paid $4.6 billion hosting the Olympics in 2000. Of that total,
taxpayers covered $11.4 million. Rio de Janeiro is expected to pay over $20 billion by the end of
the 2016 Olympics. Once a city wins a bid for hosting the Olympics, cities commonly add roads,
build or enhance airports, and construct rail lines to accommodate the large influx of people.
Housing for the athletes in the Olympic village, as well as at least 40,000 available hotel rooms, and
specific facilities for the events, must be created or updated, as well. Overall, infrastructure costs
may be $5 billion to $50 billion.

Benefits of Hosting the Olympics:

Cities hosting the Olympics gain temporary jobs due to infrastructure improvements that continue
benefiting the cities into the future. For example, Rio constructed 15,000 new hotel rooms to
accommodate tourists. Sochi invested approximately $42.5 billion in constructing no sports
infrastructure for the 2014 Olympics. Beijing spent over $22.5 billion constructing roads, airports
and rails, as well as almost $11.25 billion on environmental clean-up. Additionally, thousands of
sponsors, media, athletes and spectators typically visit a host city for six months before and six
months after the Olympics, which brings in additional revenue.

Drawbacks of Hosting the Olympics:

The boost in job creation for cities hosting the Olympics is not always as beneficial as initially
perceived. For example, Salt Lake City added only 7,000 jobs, about 10% of the number that
officials had mentioned, when the city hosted the 2002 Olympics. Also, most jobs went to workers
who were already employed, which did not help the number of unemployed workers. Furthermore,
many of the profits realized by construction companies, hotels and restaurants go to international
companies rather than to the host city’s economy. Also, income from the games often covers only a
portion of expenses. For example, London brought in $5.2 billion and spent $18 billion on the 2012
Summer Olympics. Vancouver brought in $2.8 billion, after spending $7.6 billion on the Winter
Games in 2010. Beijing generated $3.6 billion and spent more than $40 billion for the Summer
Olympics in 2008. As of 2016, Los Angeles is the only host city that realized a profit from the
games, mostly because the required infrastructure already existed. Additionally, it is difficult
ascertaining exactly which benefits come from hosting the Olympics. For example, Vancouver had
planned many infrastructure projects before winning the bid for hosting the 2010 games.

The Impact Of Olympic Games On Tourism And Hospitality:

In the more developed world, every industry in the rapid development. This is a high-speed development in
the 21st century, especially tourism and hospitality. It is a big trend in tourism industry, lots of people because
Olympic Games, stars, attractions and movies are fascinated. Because of this kind of industry, it will be a
high salary in tourism and hospitality. Also, it will increase income tax, marking, local communities, great
attractions, historical staff and natural environment. This paper will talk about Olympic Games impact
tourism and hospitality why they rise taxes and marketing, and why impact local communities in order to
increase their international tourism and hospitality in the local society.

The Environmental Impact Of The Olympics:

Since their creation, the Olympics Games have brought a number of sports into the limelight and they've
encouraged people to put aside political, cultural, economic and religious barriers. But when tens of
millions of people are all crowding into the same area and hundreds of buildings are being lit up, televised
and reported from, just how damaging to the environment are the Olympic Games?

2|Page
There are already concerns about the hosting of the 2022 Winter Olympics in Beijing, a country already
plagued with desertification problems and many fears for the athletes safety as a result of poor water
conditions were raised prior to the recent beginning of the 2016 Rio de Janeiro Olympics. With these
worries being raised already it's evident that the environmental cost of becoming a host country is a topic of
concern for many but it seems to take quite a bit of digging to truly unearth how much of a toll the
environment takes during the Games...

When the Olympics first began, few people worried or even gave a thought to the environmental
consequences of hosting such a large event but in the 1990s the host countries began to incorporate a
number of environmental goals into the preparation of and running of the games. There are no doubts about
the fact that hosting such an enormous event will have its negative aspects but when it comes to the benefits
it all becomes a bit shady - so are there any?

Yes, to some degree, there are benefits and as time has gone on, the number of environmental schemes ran
alongside the Olympics have only increased which can only be a good thing!

In the 2000 Sydney Games environmental factors became a major talking point as spectators were offered
free travel on trains and buses when heading to and from the games. The environment also became an
important factor in the building of the Olympic arenas; in the athlete's village the equivalent of an entire
power station of solar panels were installed and the single largest roof-based solar energy system was
mounted on the roof of the basketball venue.

In the London 2012 games it was clear that the focus on environmental preservation had not been lost, with
figures showcasing a number of positive initiatives that had been tackled by the host country. Reports from
the games showed that they had inspired a 29% increase in cyclists within central London compared to the
previous year and during the games themselves 86% of the spectators travelled to the events via train.
Across the duration of the Olympics 62% of the waste generated was reused, recycled or composted.

Impact:

The worrying answer is that there is no solid figure or statement that can be given to explain or
define exactly what the environmental costs of hosting the Olympics is. The reality is that the
organisations that typically promote the Olympics generate a majority of the analytical data about
the Games themselves and so there is no way to know just how much information is left out,
tampered with or actually included in the reports. In short, Games that are environmentally friendly
are likely to be more expensive but with a growing number of people beginning to understand the
impact we have on the environment is important, Games which are environmentally damaging are
fast being deemed as unacceptable. With a number of host cities beginning to implement
environmentally friendly schemes; from carbon offset projects, to investing in more sustainable
water supplies, organising transportation for spectators and sourcing sustainable materials for the
buildings themselves it seems the Games may already be changing for the better. Perhaps in the
future the competitive nature of the Olympics will come hand-in-hand with a positive embrace of
sustainable schemes

Impact from a social perspective:

If one looks at a mega-sporting event solely as a sporting festivity, it can be argued that such an
event will provide sociocultural benefits for the host region. For example, sporting events the size of
the Olympics can increase the local interest and participation in sporting activities,73 and also, as
Essex and Chalkley29 have claimed, they can strengthen regional traditions and values, and
increase local pride and community spirit. As Nelson Mandela clasped the world cup in triumph
after Africa was awarded football’s showcase competition for the first time, millions of people
 celebrated for what was hailed as deeply symbolic and a major step in the regeneration of a
continent. Closer to home Barbara Cassani from the London 2012 bid committee claims that the
greatest sporting and cultural on earth will raise national pride and give the chance to show the
country at its best.74 Increased sports participation can make a significant contribution to the
quality of life of both the individual and community. Hooper75 has argued that increased sport
participation provides a sense of well-being through fun and enjoyment, leading to self-fulfilment
and achievement, and encourages social interaction and cohesion for those who may feel socially
excluded. For example, Barcelona saw a notable increase in the participation of new social sectors
of the population in active sports in the years following the hosting of the Olympic Games. There
has been an increase of 46 000 new users in the city’s sports centres following the 1992 Games,
with the percentage of women participating in sporting activities increasing from 35% in 1989 to
45% in 1995. Moreover, in 1994, more than 300 000 people took part in sporting events which
involved the city’s inhabitants on the streets of Barcelona, such as athletic competitions, popular
marathon, the bicycle festival and the roller-skating festival.76 It has been claimed that Catalans’
drift into mass-community sporting activities was due to an increased community spirit triggered by
the 1992 Olympics. Truno,76 for example, found evidence of increased civic pride during the
Olympics and remarked that ‘the citizens have turned the city’s streets into the world’s largest
stadium’. This was also boosted by media coverage, which was presenting Catalans as among the
most celebrative people in Europe.77 Similarly, a survey of the residents of the State of Georgia
(USA), undertaken by the Governor’s Department, confirmed that the 1996 Olympics generated
civic pride, with 93% stating that the Games were positive for the community spirit of the city.57 A
similar phenomenon was evident during the 1996 European Football Championship in England,
where the country adopted the nostalgic theme ‘football’s coming home’, and created a sense of
national purpose, national unity and national pride.20 The hosting of mega-sporting events,
therefore, can provide localities with an opportunity to generate world recognition and reinforce
their local pride and community spirit. Mega-sporting events can also contribute to transforming the
image of the host city. The city of Sheffield, for example, which was traditionally a manufacturing
city, after the industrial recession of the 1980s and subsequent job losses, adopted sport, leisure and
tourism as part of the reimaging strategy of the city. Under that approach, the hosting of mega-
sporting events was seen as an integral part of that strategy.24 The successful bid for the 1991
World Student Games and the subsequent investment of £139 million in sporting infrastructure in
addition to a further £600 million in associated leisure and cultural facilities by the early 1990s has
given the city a new focus. In 1995 Sheffield was designated by the Sports Council as the UK’s first
‘National City of Sport’ in recognition of its ongoing contribution and commitment to sport, and in
December 1997 it was named as the city chosen to host the headquarters of the UK Institute of
Sport,25 a decision which was however subsequently reversed due to governing body unwillingness
to relocate there.78 Since the events of September 11th in New York, security issues have taken on
a higher profile during the Olympic Games as the need for effective crowd control, security and
policing are important aspects. However, organisers need to be cautious to ensure that negative
psychological impacts do not arise due to too much security.49 The history of removal of prostitutes
and beggars, the homeless and protesters as well as the increased powers of police to detain suspects
show the efforts of the organisers to show a good image, conveniently forgetting the civil liberties
issues at stake.

Methodology:
Due to the limitations in terms of time, cost and geographical location, it has been decided that the
appropriate research method to be used for this research will rely upon the collection of data from
secondary sources. These will include information collected from the official 2012 Olympic websites of the
LOCOG (2007) and other related stakeholders as well as independent research conducted by academics and
other tourism stakeholders. Other resources have also been used, including publications available from

4|Page
bookshops and libraries and journal articles. Similar resource locations have been relied upon for the
collection of data relating to the comparative events.

Although it is sometimes perceived that there are limitations to the secondary data collection approach in
this case it was considered that the depth of previous and immediate research is sufficiently robust to add
value to the findings of this study. For example, sufficient academic and practical research material is
available to be able to provide a direct comparison between the intentions of the 2012 Olympic Games
legacy expectations and the actual results that have been achieved from previous events, including those
held within the UK and in other international locations.

Discussion of research findings:

In all events apart from the London 2012 the research conducted for this study has included the examination
of the legacy claimed to result from hosting special events by the organisers and the findings from
subsequent research and reviews conducted by various academic and tourism stakeholders .For ease of
reference this section of the research has been divided into relevant segments. The findings of the research
are presented within the first three segments and these are followed by a discussion, analysis and evaluation
of these findings that will provide a conclusion to the research question

Discussion:
Perhaps the most important aspect of the findings to note is that, from the time of the Atlanta
Olympic Games in 1996, the cost of hosting this four year event has escalated at an ever increasing
rate. In fact, as the following graph shows (figure 4) the capital investment has doubled on every
occasion, including the latest event in Beijing in 2008.

Despite the fact that in most cases a proportion of the costs can be defrayed as a result of sales of
media coverage and sponsorship, valued at in excess of $1 billion per event (CBS 1988), this cost
escalation does mean that the expectation in regards to the return achieved on this investment has
also risen. In other words the benefits, including those enjoyed by the tourism sector, need to have
shown significant improvements. However, if the cost of the London Olympic Games in 2012 does
not escalate from its current costs of around £9 billion, it will not only be the first time the games
cost have reduced since 1996 but also its return expectations will be lower. Nevertheless, when the
expectations of the LOCOG (2007) and other researchers (Blake 2005) are considered against the
actual results that have attached to the three previous Olympic Games events being used as
comparisons, it is apparent that there are concerns that the London organisers need to consider. In
particular, two issues seem to be a recurring problem during the years following the games. The
first of these is the use and capitalisation of the sporting venues. In the cases of both Sydney and
Athens these have proved difficult to make economically viable post the event. The second issue is
tourism employment. In all three Olympic Games case studies, this area of benefits does not seem
to have continued to any great extent post the games. However, the result of the Manchester
experience has shown that there can be tourism benefits in all of the major areas that have formed
the focus of this study. In this city tourism numbers, tourist spend, hotel occupancy and
employment have all seen continued growth both at the time of the Commonwealth Games and
during the subsequent three years..

Summary and evaluation:

One of the difficulties of evaluating a research issue of this nature is that it is impossible to perform
an exact comparison as each event takes place during a different chronological period. For example,
an issue that can be said to significant alter the results would be the economic position of the
country and other countries during the timescale being evaluated. Furthermore, the detailed
statistics in each case is kept in a differing format which adds to the analytical difficulties.
 However, by accessing and comparing the information relating to each case study from a range of
previous researches it is considered that the information and findings presented have been able to be
appropriately verified and can therefore be considered reliable. Therefore, although studies by other
researchers (Baade, Robert A. & Victor Matheson. (2002) and Gratton and Henry (2001)) have
indicated that the Games have not impacted upon following years GDP as a whole, it is considered
that this has been due to other economic factors and not relevant to the benefits or otherwise of
tourism.

Conclusion and recommendations:

The research question set at the commencement of this research sought to determine: –

Whether the hosting of the 2012 Olympic Games in London will provide the City and the UK tourism
industry with potential benefits both during and post the event.

Despite the limitations of the research conducted for this paper, this being restricted to five sporting events
that have occurred within the past twelve years, it is considered that, with certain provisions, the response
to this question is that the hosting of the 2012 Olympic games can produce potential tourism benefits for
London and UK both during and in the years following the event. Whilst the comment of Baade and
Matheson (2002, p.98) that “the evidence suggests that the economic impact of the Olympics is transitory,
onetime changes rather than a ‘steady-state’ change,” is concurred with to a certain extent, it must be
tempered with the fact that in certain areas of tourism benefits have been achieved. The poor results they
refer to is more due to lack of planning and management by the organisers rather than any external forces
or influences. In this respect therefore, it is important to provide the following recommendations to the
organisers of the London Olympic Games that should be considered if they wish to achieve a successful
and sustainable outcome for the tourism industry.

Recommendations:
In essence recommendations being made can be determined within two main areas, these being related to
the planning and execution stages.

Planning

An essential element of the planning for Olympic Games events is to take notice of the research that has
been conducted For example, in this instance the research conducted into the three games that have been
used as case studies within this research have all identified areas where improvements might have been
made, both at the planning stage and subsequently. Furthermore, research into the Manchester sporting
event has shown the benefit of have an identifiable and robust legacy programme which, to a certain extent,
should operate independently of the event itself and continue into following years. This position has
provided dividends for the Manchester tourism industry that have surpassed the expectations.

Execution

Secondly, the execution of the legacy strategy is important. All aspects of the post event period have to be
meticulously planned and implemented within the required timescale, which as the Greek tourism minister
indicated, includes the immediate six or seven months post the games (Hersh 2008), as this is a critical time
to build foundations for future success.

Summary:
If the London organisers learn from the lessons of past events and particularly take on board the successes
that have been achieved in Manchester, there is no reason why the games should not produce a series of
lasting benefits for the London and UK tourism sectors.

6|Page
References
 Arthur Andersen (2000) “The Sydney Olympic Performance Survey: The Sydney Olympic Games
on the Australian Hotel Industry,” Mimeograph, November 2000, pp.1-7.

 Associated Press (2004). Games cost Athens over $8.5 Billion. Available
from: http://www.msnbc.msn.com/id/5761646/ (Accessed 23 December 2008)

 Baade, Robert A. & Victor Matheson. (2002). Bidding for the Olympics: Fool’s Gold? In
Transatlantic Sport, edited by Barros, Ibrahim, and Szymanski. Edward Elgar Publishing. New
York, US.

 Baade, Robert A. & Victor Matheson. (2002a). Mega-Sporting Events in Dveloping Nations:
Playing the Way to Prosperity. Available
from: http://www.williams.edu/Economics/wp/mathesonprosperity.pdf (Accessed 23 December
2008)

 BBC News (2005). London plan at a glance. Available

from: http://news.bbc.co.uk/sport1/hi/olympics/london_2012/4025027.stm (Accessed 22
December 2008)

 Blake, A (2005). The Economic Impact of the London 2012 Olympics. Nottingham University
Business School, Nottingham, UK

 CBS (1998). Television, sponsorship revenue could top $800 million. CBS Sportsline wire
reports. Available
from: http://cbs.sportsline.com/u/olympics/nagano98/news/feb98/revenue2398.htm (Accessed 24
December 2008)

 Ecotec (2007) An Evaluation of the Commonwealth Games Legacy Programme. Available

from: http://www.manchester.gov.uk/downloads/Evaluation_of_Commonwealth_Games_Legacy_
programme.pdf (Accessed 23 December 2008)

 Engle. S.M (1999). The Olympic Legacy in Atlanta. University of New South Wales Law Journal.
Vol. 38

 Fizel, John., Gustafson, Elizabeth and Hadley, Lawrence (1999). Sports Economics: Current
Research. Praeger Publishers. Westport, US.

 Fort, Rodney D and Fizel, John (2004). International Sports Economics. Praeger

Publishers. Westport, US.

 Hersh, P (2008). Athens post-Olympic Legacy: Empty spaces, unsightly venues, uncertain
tomorrow. Chicargo Tribune, Chicago, US

 Hubbard, A (2005). Olympic Games: Athens’ legacy bigger than the pounds 7 billion bill. The
Independent, London, UK

 Gratton, Chris and Henry, Ian (2001) Sport in the City: The Role of Sport in Economic and Social
Regeneration. Routledge. London, UK

 Humphreys, Jeffrey L and Plummer, Michael K (2003). The economic impact of hosting the 1996
summer Olympics. Available
 from: http://www.selig.uga.edu/forecast/olympics/OLYMTEXT.HTM (Accessed 22 December
2008)

 Humphreys, Jeffrey M. and Michael K. Plummer (1995). The Economic Impact of Hosting the
1996 Summer Olympics. Atlanta Committee for the Olympic Games. Atlanta, US

8|Page