The Cost of the Rings: Paris and the Olympic Gamble

The Olympic Games have always been a magnificent marvel that brings nations together in the spirit of sportsmanship. The Games represent the pinnacle of human achievement, captivating billions with nail-biting athleticism and their fulgent ceremonies. However, beyond the glitz and gold is a complex web of economics, politics, and urban planning. 

As Paris prepared to host the 2024 Summer Olympics, the city made lofty claims about sustainability, economic growth, and global status. But, with a staggering €8.8 billion price tag, the question remains: was hosting the Paris Olympics a glorious success or an exorbitant burden? 

Let's take a trip down memory lane to recall some examples of past Olympics and their economic impacts on countries. For Barcelona in 1992, it boosted tourism and transformed the city's infrastructure. Similarly in London (2012), the Olympics were a spectacular triumph, completely revitalizing East London and creating lasting facilities like the Queen Elizabeth Olympic Park. But it wasn't all sunshine and roses for some other countries. It added to Greece's financial problems in 2004 by leaving the country with $15 billion debt and unused venues. Rio fell in the same rabbit hole with hosting the Olympics in 2016, facilities deteriorated and promised benefits never materialised. As seen, how well the Olympics are planned and executed determines whether they succeed or fail. 

Diving into the Olympics held in Paris this year, Paris had allocated a budget of €8.8 billion for the Games. The funding went toward building new venues, such as the Olympics Village; securing major events, particularly in light of international terrorism fears; and covering operational costs, such as personnel, marketing, logistics, and ceremonies. Their primary focus was on their sustainability objectives, which they achieved by utilizing 95% existing or temporary facilities to avoid ‘white elephants’ and by employing eco-friendly designs and renewable energy commitments to minimise the environmental impact.

Take into consideration the $28 billion cost of past Olympics, such as Tokyo 2020, to demonstrate how Paris handled its spending.

Hosting the Olympics is not a seamless feat and offers an unrivalled opportunity to have profound impacts to the host city. For instance, the tourism boom and job creation. Millions of international visitors contribute to the country's economy by indulging in tourism activities such as dining, shopping and exploring cultural attractions, which generate significant revenue. It leads to temporary jobs created in hospitality, retail and merchandising and management. Long-term benefits include improved infrastructure that will benefit residents for many years and the host nation's branding, which can strengthen its standing as a top venue for international events and draw in further investment.

Paris too hoped to emulate this by repurposing facilities like the Seine-Saint-Denis area, one of its poorest regions. 

There is no doubt that the adage "the Olympics can make or break a country" stands true. Many Olympics tend to exceed their projected budgets, Tokyo 2020 being proof of this. It can result in unused facilities, as well as costs associated with community displacement to make space for Olympic infrastructure (for example, Seine-Saint-Denis). Polls in some countries have shown locals opposing Olympics bids due to these concerns, highlighting how these billions could instead be spent on public services like healthcare, education or housing.

According to market analysts, the Paris Games would help France's GDP rise by 0.5 percent during the third quarter before reversing to 0.1 percent at the end of the event. Official IOC projections indicate that the hosting of the Games should boost the French economy by $12.2 billion. The IOC gave Paris US$1.7 billion, which should cover any losses akin to Tokyo 2020's US$800 million loss. Therefore, even a minor loss for Paris would probably be covered by the IOC. The city and the surrounding area were expected to benefit economically from the 2024 Paris Olympics, with estimates of net economic advantages ranging from €6.7 billion to €11.1 billion. An estimated 3.1 million people attended the Olympics, a 14% increase over 2019. The local economy and areas like Chartres and Reims profited from the inflow of tourists. 

Looking at this year's Olympics, optimists argue that Paris’s focus on sustainability and cost management made it a viable model for future Olympics. Paris incorporated some strategies to mitigate risks, one of them being heavy reliance on private funding (around 30% of the budget). One of their aims was long-term planning for repurposing facilities and avoiding waste. 

In October 2023, India made a major advancement toward its Olympic aspirations. Hon. Prime Minister Narendra Modi formally affirmed India's ambition to host the 2036 Summer Olympic Games at the opening of the 141st IOC session in Mumbai. For the nation's sporting ambitions, this announcement represents a turning point. The task of hosting the Olympic Games is no easy one. Both sport-specific facilities and a larger supporting infrastructure must be heavily invested in. 

While the Olympics promise a boost in tourism and long-term urban revitalization, it can also leave a nation reeling under a mountain of debt. Paris learned lessons from past hosts to pull off the Games successfully. The secret appears to be careful planning, making use of already-existing infrastructure, and concentrating on long-term advantages—all of which Paris 2024 has just attempted. In the future, prospective host towns will need to strike a balance between financial responsibility and the Olympic Games' status.