When the 2016 Olympic Games in Rio de Janeiro kick off with the opening ceremony in just a few short days, eyes all over the globe will turn to Rio to watch athletes compete for the gold medal that will deem them best in the world.
Controversies abound since Rio began construction on Olympic venues years ago. With reports of residents being evicted from slums to construction worker deaths and unsafe conditions, many have questioned whether the city is ready to host such a large international event.
But how would your hometown fare under all that pressure? Even for more developed cities in the U.S., Canada and Europe, hosting the Olympics can take a toll on the local economy and leave major venues unoccupied once the international athletes leave town.
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The Hardships
In a 2010 report in the Journal of Olympic History, “The Post-Olympic Valley Effect,” Olympics historian Chang-jie Zhao asserts that the rapid development required to host the games has, in multiple cases, led to a swift decline in economic activity and real estate prices and rents following the Olympic Games, which runs contrary to claims that the Olympics bring business and economic boom to a region.
The 2004 Summer Games in Sydney, for example, built up housing for as many as 50,000 athletes and team personnel and additional hotel options that ultimately could not be supported by the regular business and life in the city.
“So the facilities around the Olympic Village seem surplus to requirements for Sydney, a middle scale city with a population of about four million,” Zhao says in the Olympic History report. “So it is not surprising that the Olympic Village should have become a ‘Ghost Town.'”
Many previous host cities, including Atlanta, Athens, Greece, and even the most recent host Sochi, Russia, which held the 2014 Winter Olympics, have at least some venues that were costly to create but now sit vacant.
The Success Stories
The most recent Olympics held in the U.S., the 2002 Salt Lake City Winter Games, have largely been viewed as a success story by economists and locals alike. Resorts close to Utah’s capital had long been perfect for skiing and other mountain activities, but the city was often overlooked for Colorado as a destination by out-of-towners before it hosted the Olympics.
One thing the Salt Lake Olympics did differently was allocate the majority of its money to areas that would prove useful in the long term, including improvements to the local international airport and easy passage from Salt Lake City to the mountain resorts that hosted many of the Olympic events, explains Victor A. Matheson, professor of economics at College of the Holy Cross in Worcester, Massachusetts, and co-author of “Going for the Gold: The Economics of the Olympics,” published in the Spring 2016 edition of the Journal of Economic Perspectives.
“Having better ground transportation between Salt Lake City and the ski resorts up in the mountains to the east — that’s going to be helpful for your tourism when you revert to skiing rather than people watching skiing,” Matheson says.
The 2002 Games helped show Utah’s abundant opportunities for outdoor activities, which has helped to expand tourism to the surrounding resort towns. From 2001 through early 2015, Utah experienced growth in visitors for skiing by more than 20 percent, compared to neighboring Colorado’s 8 percent growth during the same period, according to the Economic Perspectives report.
In nearby Park City, Utah, the Utah Olympic Park continues to serve as a destination for both those visiting for winter sports training and local families, with recreational activities such as zip line, ropes courses and rock climbing.
“People come from all over the world now to train here,” says Ann MacQuoid, a senior partner and associate broker for Chin MacQuoid Fleming Harris Luxury Resort Real Estate with Berkshire Hathaway HomeServices Utah. “In real estate, one of the things we do is sell homes or townhomes to people who are specifically moving to Park City so that their children can learn to ski and compete at an elite level.”
The Olympics have helped encourage tourism to other previous host cities as well, Matheson says, noting Barcelona, Spain, is another example of a city that was often overlooked for a more well-known destination before hosting the Olympics. Madrid was always the flashier counterpart before Barcelona stepped into the limelight when it hosted the 1992 Summer Games.
“I think [Salt Lake City and Barcelona] were good examples of the hidden gem idea: Is that these are places that had a lot to offer tourists but were not well known to people in general, and therefore when they got their three-week massive advertising binge, they were actually able to do something with it,” Matheson says.
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Is There a Brighter Future for Host Cities?
It’s difficult to predict which cities will flourish or fail after hosting the Olympics, but as national Olympic committees vie for the chance to host, residents in candidate cities are expressing mixed emotions.
The U.S. Olympic Committee is currently bidding for the 2024 Summer Olympics with Los Angeles as the chosen host city, though a number of other cities had been on the short list into 2015 — San Francisco, Boston and the District of Columbia.
Boston had been a front-runner, but the USOC opted not to nominate the New England city following harsh criticism from its residents, much of which touched on the exorbitant costs of hosting the games, which is primarily paid for locally.
In response to increasing criticism over the cost and effect diverted tax dollars have on local residents and businesses in host cities, the International Olympic Committee has discussed the benefits of a more economical approach to the Games in the future, whether that means using existing venues or focusing design for function and frugality over flashiness.
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Current U.S. bid Los Angeles has hosted the Olympics twice before — first in 1932 and again in 1984. Both times existing stadiums such as the Rose Bowl, then-Los Angeles Lakers arena The Forum and Los Angeles Memorial Coliseum were used for major events.
But, Matheson notes, if a competing bid is willing to go all out, it may be too tempting when presented with a bigger and better option: “The IOC can pay lip service to sustainability all they want, but what happens when they’re faced with a bid for Los Angeles — that has a very nice, but aging, Staples Center and a couple hundred-year-old stadiums as their big venues, and dorm rooms that are not part of some great, grandiose Olympic village, but are basically just part of UCLA — when they’re faced with a bid from [another city] that unties the purse strings and says, ‘Whatever you want you can have’?”
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Why You Do (or Don’t) Want Your Hometown to Host the Olympics originally appeared on usnews.com
