London a Ghost Town because of the Olympic Curse?

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I know we have a thread on the Olympics but that's dealing with the games themselves. This is about an article I read about the economic impact of the games. Apparently, unless you happen to operate a business that's right in the heart of everything, business is pretty bad. Businesses that are within eyesight of the main Olympic stadiums, but not within the "Olympic village" itself are actually seeing worse business than they would during a typical August day without the Olympics.

That, of course, is very discouraging, as any nation that hosts the Olympics needs to spend a boat load of money to get the facilities ready. Britain spent about $14 billion in construction alone preparing for the games. The desired outcome is while you spend a lot upfront, that a lot of people come to the host nation during the games, and you make it all back from people from other nations spending money in your country. But that it not really happening unless you're within the main Olympic village. A pub owner within the village reports selling about $50,000 worth of food and drink a day!

And, as you might imagine, if it's that bad within London itself, cities outside of London are seeing an absolute dearth of tourists. And that makes sense. If you were planning a vacation in Britain, but figured you wouldn't be able to do much in London with the Olympics going on, you may just scrap the idea until next year. Edinburgh, for example, has seen its lowest tourism numbers in years.

This has given rise to what has been called the "Olympic Curse". It's the idea that it isn't a good idea to host the Olympic games, because there is no hope of ever making back the considerable amount of money you spend on hosting the games. Greece hosted the games in 2004, and while the record keeping of how much was spent was (unsurpringly) shoddy, some estimates come in as high as $32 billion, and contributed to Greece's current financial crisis.

The basic problem is that if you don't make the money back during the Games, you'll never see a long-term benefit from what you spend. A lot of the buildings constructed specifically because of the games don't see a lot of use after the games are over. To use Greece as an example again, a lot of the venues built specifically for the 2004 games now stand empty. Interestingly, the US has fared somewhat better in their games, in part because of our admittedly poor mass transit systems. When we host the games, we make you see the rest of the city, because chances are you'll be staying in a hotel 20 miles away, and will necessarily be eating at restauarants and visiting businesses near your hotel, unless you want to pay $30 for a cab ride every time you leave your hotel.

Olympic Curse Story

 

I'm assuming that the government(s) make it all back on taxation. If that's the case and they can get their blood money from Olympic Village, they may not care what happens to the little guys on the fringes. Or does it work some other way?

The infrastructure efforts can be seen on a smaller local scale as well. When Detroit hosted the 2006 Super Bowl, for example, among the many upgrades was a silly phony suspension bridge-looking ... thing ... placed atop an existing non-suspension bridge over a major roadway that the expressway between the airport and downtown crossed over. It's purpose was only to give the impression of some type of 'gateway' effect to those travelling from the airport to the Super Bowl downtown. These people who benefited from this display were probably going to be in town maybe three days and nights, tops. Now, six years later, the thing is still standing there, as pointless as ever and somewhat less vital looking. Eventually it will probably fall over and have to be carted off to a scrap yard, costing the city/county even more money, lol. I hope it was worth it.

 

There's no way you can get back tens of billions in taxes from Olympic Village alone. While there are certainly tens of millions of dollars that exchange hands in Olympic village, it's preposterous to suggest that in the course of about two weeks (the athletes get there earlier, but the tourists don't show up until the events start) your going to see $14 billion in total revenue - never mind making that in taxes. Quebec hosted the winter olympics in 1976, and eventually they did make it back in taxes. It took them nearly 30 years.

 

How is hosting the olympics a potentially profitable venture then? It seems like no one would want it if it was a guaranteed loser.

[edit]

Sorry, didn't read the article closely.

What is "inward investment urban regeneration?"

 

I can't say that I know. It sounds like improvements to the downtown that will make people want to go there more frequently? That's just a guess. It could just be political speak that sounded good at the time.

The point being though is that they thought that this would turn a profit over the course of 4 years. However, if people aren't even going to the shops outside the Olympic Village during the games themselves, it defies belief that after the games it's suddenly going to be the place everyone wants to go.

It's also a bit of a weird mindset. I don't think I'd ever pay to see an Olympic event, even if the event was hosted nearby where I live. (I definitely wouldn't travel to a foriegn nation for the purpose of seeing an Olympic event.) In fact, I imagine that most of the foreign attendees are friends and family of the athletes competing. I think the reason for this is that most people aren't "fans" of the sports that are contested during the Olympics.

Yes, there is a swim team, gymnastic team, track and field team, etc. Yes, I imagine 99% of people will root for the athletes from their home nation. But I don't think you get a level of fan interest that you'd get from someone's favorite baseball team, basketball team, football team, etc. For the most part, you don't even know the names of the athletes. I watched the women's gymnastics event last weekend, and while I thought they did great and found it entertaining, I'd be lying if I said I knew who Gabby Douglas - or any of the other members of the team were before last week. And a month from now, I won't be able to recall their names.

While I can't speak for people everywhere, it seems like the general opinion is that the Olympics are a moderately intersting series of novelty sporting events, that you'll watch for two weeks every four years, and never any other time. I can't imagine I'll watch gymnastics again before Rio 2016, despite enjoying seeing it this past week. With the exception of tennis, basketball, and soccer, I cannot name a single Olympic event where people would say they frequently watch the sport outside of the Olympics. And even then, most basketball fans will still maintain a greater interest in their favorite pro squad than they will with the national team, because their pro squad will still be together two weeks from now. The same goes for soccer.

So that does go back to the question you asked initially Gaear: Why would any nation want the Olympics if it's (at least likely) a loser economically? I don't know. While I find it humorous that the US fares better than most due to a lack of a good mass transit system - that we essentially force people to spend money all over the host city's area because it's such a pain in the ass to get around. But why do nations spend billions of dollars for what are mostly niche sports? Tennis, basketball and soccer are A-list sports. Of the three, only tennis, as an individual sport could you really say you're a fan of a certain athlete. Soccer and basketball are certainly popular, but those teams will cease to exist as such at the conclusion of the games. Everything else are sports that most people would not rate as one of their favorites. I am left to wonder how you can possibly expect to make back billions of dollars to host these things?