It has always been assumed that the Summer Games, also popularly known as the Olympic Games is a boon to the economy due to the number of tourists that are expected to flock into the host city and neighboring provinces. Financial windfall is also expected from the businesses that will be generated as a direct consequence of servicing the needs of the athletes as well as the tourists.
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Value is also assumed to be added to the host city because of the significant number and quality of infrastructures that must be completed prior to the games and the same can be utilized as sports facilities in the aftermath of the Olympics and even as a tourist attraction in the years following the said event.
The authors of the article that will be reviewed, Naomi Kirkup & Bridget Major, argue that this is not always the case. The following pages will explain in detail their arguments and analyze the data they presented as evidence to support their claim.
There are basically two major objectives that one can readily see from the very beginning of this article. It is to show that Olympic Games or the Summer Games held once in every four years, the last one was in Beijing, China (2008 Olympics) and the next one will be held in London (2012 Olympics) is not always a profitable venture.
The second objective is to provide enough information to help planners of the upcoming London Olympics to find ways on how to increase profitability considering that by simply hosting the event will not guarantee a positive profit for the host city in particular and even for the host nation in general.
These are both important objectives considering that the host city will have to spend billions of British pounds for the infrastructure alone and hundreds of millions more to accommodate the athletes and other services needed to assure a successful hosting of the Summer Games two years from now.
It has to be pointed out though that this is no easy undertaking considering the fact that the Olympic Games is not a simple event that will require the participation of hundreds of nations and thousands of athletes not to mention their support groups and their families. It is therefore a monumental task for any research group to study every factor that has a direct bearing in the economic impact that the Olympic Games will bring to the host city and to the host nation.
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One of the more important issues tackled in this journal article is the importance of sports as a tourist attraction. In other words the Olympics is one of the events in human history that allowed us to consider the idea of “sport tourism.”
If this is the case then there must be a way to find out if the Olympics can indeed generate the same profit as other conventional tourist attractions such as beautiful scenery, historical landmarks and even popular resorts. If this is true then it also follows that there is a way to monitor the impact of the Olympics.
The authors pointed out that it was the organizers behind the Sydney Olympics that started the trend of initiating a more deliberate way of finding out if the host city made money from the event and if there are long term benefits for hosting the said event. It has been pointed out that the Input-Output model is one way of measuring the economic impact of the Summer Games.
Another model is the Sport Tourism Economic Assessment Model which is a more accurate measurement because it does not include spending made by visitors who live within 80 km of the event. Another method that can be used is to adopt the principles used in a study known as the Olympic Games Global Impact Project or OGGI.
Sport tourism is now an established industry and there is no single event that characterizes what sport tourism is other than the Olympic Games.
In order to attract financiers and supporters to spend money and work hard to win the right to host the Summer Games it is important to find out first if it will be beneficial in the short-term as well as in the long-term. It is therefore important to find out if the past Summer Games were a financial success and not just an expensive event that brought prestige to the host city.
It is therefore important to know that the organizers of the Sydney Games were the first to actively pursue a scientific approach in determining if the city really benefited from the event. Organizers of the London 2012 Olympics will simply have to study data gathered from Sydney, Australia.
After a careful analysis of data taken right after the Sydney Olympics ten years ago, it was discovered that not all the crucial information was gathered by the investigators. In fact they were able to discover that expenses used for the event was not correctly recorded.
This means that it would be impossible to determine if the Summer Games made money for the host city. These problems can be traced back to the desire of interest groups to win the bid to host the games in Sydney. As a result there was a concerted effort to always argue that everything is beneficial when it comes to the Summer Games.
As one digs deeper into the past he or she will discover that sport tourism does not translate into other forms of tourism. Thus, there are those who suggested that the people who enjoy sport tourism are like sports junkies who are only there for the games and nothing more.
In other words, the moment that the Olympic fire was extinguished to end more than two weeks of activities and celebration, “sports tourists” will also pack their bags and leave. They will not tarry to find out what the host city has to offer or if neighboring provinces have scenic spots or historical sites that are worth visiting.
Various mathematical models were used to scientifically prove that the Olympic Games is a sure thing – that the moment the host city wins the bid this city will immediately reap the benefits of being a host and this will not end even after the athletes are all gone.
These methods are neatly divided into two groups of activities the pre-Games analysis and the post-Games analysis. Data is taken from studies commissioned by the government of Australia. Aside from that, techniques used in case studies were applied to look into Sydney Olympics.
The only problem with this type of analysis is the fact that these government studies are biased because of their need to win the bid to host the event. Furthermore there is not enough data that will allow investigators to see the real picture which is the economic activity before the Games and the economic impact after the Games.
This journal article is very helpful in understanding the nature of Olympic Games. It has been assumed for so long that the Summer Games is a boon to the economy. This assumption was never questioned and therefore no scientific inquiry was conducted for many years. By actively pursuing a more scientific approach to study the economic impact of the Games it is much easier to gather data that will help resolve this issue.
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Aside from the economic impact of the Games, this journal article also shed light on “sport tourism” as a growing industry. This is an important topic of discussion especially to those who work under tourism as an industry.
Another major contribution of this journal article is the idea that the host city may take all the profit and it can even reduce the income of neighboring states because the visitors who are supposed to come to their area are now attracted to be in the Summer Games, in a city far away from home.
The authors were able to accomplish what they had set out to do in the very beginning. They wanted to show that the Olympic Games do not always guarantee substantial returns based on the amount of money spent on it. It was also pointed out that the whole country will not necessarily benefit from becoming the host nation. Financiers must find a way to understand the profitability of the enterprise.
This is because they may be expecting a windfall and find out that it is difficult to make money out of it because of the sheer number of projects that has to be completed months and years before the event. The cost of these constructions may not be readily available to the researchers as well as the additional costs needed for maintenance and repair.
Even with the problems encountered in the case study that attempted to analyze the Sydney Olympics and discovered a lot of mistakes in the preparation stage there are still many things that one can learn from the mere fact that a scientific inquiry was conducted to know more about the Games.
After this exercise, future Olympic events will be scrutinized more closely such as every piece of material that was purchased for the construction of the facilities will be accounted for and every other item recorded for the purpose of finding out if indeed the Summer Games can help provided a positive economic impact for the city.
Kirkup, N. & B. Major. (2006) Doctoral Foundation Paper: The Reliability of Economic Impact
Studies of the Olympic Games: A Post-Games Study of Sydney 2000 and Considerations for London 2012. Journal of Sport and Tourism. 11(3) p. 275-296.