To be sure, the best way to build tourism is word of mouth and that can disappear for host cities. Long-term legacy impacts are even harder to find in most former host cities, and those few studies that purport to uncover significant macroeconomic benefits from hosting fall apart once host cities are compared to otherwise similar countries that didn’t host the event. Indeed, net tourism has fallen during several recent Olympic Games, such as London in 2012 by five percent or Beijing in 2008 by over twenty percent. The decrease in normal tourists, resulting from those seeking to stay away from Olympic congestion, high prices, and security issues, may neutralize any increase from Olympic tourism. Most empirical studies of past Olympic Games have shown only modest, if any, increases in economic activity due to increased tourism during the event that could be used to economically justify the cost of the Olympics. For example, the 2016 Summer Games in Rio, which cost the governments and organizers in Brazil at least $13 billion, generated at most $9 billion in revenue, much of which was kept by the IOC and was therefore unable to be used to defray the expenses associated with hosting. Even the explosion of international sponsorship deals and global media rights has not been able to keep up with the skyrocketing costs of the event. Each of the past five Summer Olympics and both of the most recent Winter Games have resulted in total costs for the host cities of over $10 billion with the 2008 Beijing Summer Games exceeding $45 billion in total costs and the 2014 Sochi Winter Olympics topping $50 billion. The modern Olympics has become an exceptionally expensive affair. So, what has caused this massive change in the Olympic landscape? The answer is spiraling costs and a growing realization of the financial risks that the Olympics place on host cities, a reality that has only been further exposed by the global COVID-19 pandemic. Faced with the prospect of potentially having no qualified applicants for the 2028 Summer Games, the IOC awarded Paris the 2024 event and simultaneously awarded the 2028 Games to Los Angeles. Similarly, in the process to select the 2024 Summer Olympics host, numerous potential cities including Boston, Budapest, Hamburg, and Rome, withdrew their applications leaving only Paris and Los Angeles in the final pool. In the bidding to host the 2022 Winter Olympics, at least five potential host cities, all Western democracies, withdrew from the bidding process after voter referendums or public polling indicated a lack of local support, leaving only the notably non-democratic cities of Beijing, China and Almaty, Kazakhstan in the running. But that has all changed in recent years. No fewer than eleven cities submitted initial applications to host the 2004 Summer Olympics followed by ten bids for 2008 and another nine for 2012. The competition among cities for the honor of hosting the world’s premier sporting event used to be as vigorous as the competition among the athletes themselves. It awarded the 2028 Summer Games to Los Angeles without even making a call for other bidders, effectively conceding the point that finding willing and capable Olympics hosts has become exceedingly difficult. On September 13, 2017, the International Olympic Committee (IOC) did the unthinkable.
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