The Tokyo Olympics 2020 was planned to commence on July 2020 but due to the Corona Virus Pandemic, it was postponed many times. After a long wait, the Olympics has finally begun today. But this huge delay has come with an unimaginable cost.
Tokyo is estimated to have spent over $70 million on bidding for the Olympics and an estimated $15.4 billion to build facilities to host it. The one-year delay due to Covid-19 is said to have added $3 billion in costs. The Olympics had been postponed for the first time in its 124 years of existence. Due to this, it would be very hard to turn a profit from the Olympics this time. For instance, ticket sales would contribute $800 million for the Tokyo organizing committee. But this much revenue from tickets is impossible, given that foreign spectators are banned, and domestic fans may be drastically limited in number, or even absent for a lot of events.
In 2019, Japan hosted 31.9 million foreign visitors, who spent approximately $44 billon. These numbers fell down 87% in 2020 to just 4.1 million. Olympics officials said last year that they will refund 600,000 tickets purchased by foreigners. Outsiders not being able to come to the Olympics also means that hotels in Tokyo, especially the ones built around the Olympic stadiums for their accommodation, will go to waste and suffer huge losses.
More than 60 Japanese companies together paid more than $3 billion to sponsor the Olympics. An additional $200 million was also raised due to the postponement. This amount does not include the sponsorship from big corporations like Toyota, Bridgestone, Panasonic, and Samsung.
To add to this misfortune, there could be a lot of participants from many countries who may have suffered from COVID in the last year and aren’t physically or mentally prepared to participate in the postponed Olympics. Many countries may have strict rules that allow limited participants to take part in the Games. On top of all this, if even one participant tests positive for COVID on arriving at the Olympics or their stay at Tokyo, it would cause major setback to the events.
This much loss due to COVID-19 has indeed drastically affected the Japanese economy. Officials said that cancelling the Games altogether would be so much worse than postponing, which would have estimated to cost $16.5 billion. All this led everyone to think, does Olympics need to be this grand and expensive? Is it all that worth it? The 2016 Rio Summer Olympics cost $20 billion, and the 2014 Russian Winter Olympics cost $50 billion! Some experts say that the 2020 Tokyo Games might just be the last overbudget Olympics.