Many believe that the level of tourism and foreign investment that result from hosting the games can be an economic boon. However, hosting the Olympics actually tends to be more negative for the country’s economy than anticipated. Many countries bid tens of millions of dollars for the chance to host the Olympic games. Most cities have ended up falling massively in debt after hosting the games, cities without the necessary infrastructure may be better off not hosting the games. Submitting a bid to the International Olympic Committee (IOC) to host the Olympics itself costs millions of dollars. On top of that a small fortune is spent on consultation fees and event organization. For example, Tokyo lost approximately $150 million on its bid for the 2016 Olympics and spent approximately $75 million on its successful 2020 bid. When a city wins a bid for hosting the games, cities commonly add roads, build or renovate airports, and construct rail lines to accommodate the large influx of people. Housing and facilities for the thousands of athletes must be provided as well. All these costs add up to well over $5 billion.
There are certainly benefits to hosting the Olympics. Hundreds of new jobs are created for the building of infrastructure and its improvement. 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. In 2008, Beijing spent over $22.5 billion constructing roads, airports, subways, and rail lines, as well as almost $11.25 billion on environmental cleanup. This created a lot of jobs and did help the economy.
However, The boost in job creation for cities hosting the Olympics is not always as beneficial as initially perceived. Most of the jobs went to workers who were already employed, which does not help the number of unemployed workers. Moreover, many of the profits realized by construction companies and hotels go to international companies rather than better the city’s economy. The icome generated from the Olympics has often never covered the total expenses incurred. London brought in $5.2 billion and spent $18 billion on the 2012 Olympics. Actually, Los Angeles is the only host city that made a profit from the games. This was because the required infrastructure already existed. It is actually very difficult to ascertain exactly which benefits come from hosting the Olympics.
To summarize, hosting the Olympics tends to put the city in an economic defecit. Unless a city already has the existing infrastructure to support the surge of tourists and athletes, it would be best to hold off on hosting the games.