As the curtain closes on the saga that has been the Summer Olympic Games in Tokyo, next in line are Beijing, Paris, Milan-Cortina, Los Angeles, and Brisbane. For cities around the world, being chosen to host the Olympics has historically been viewed as an honor, and for good reason. The global recognition that comes with hosting the Olympics is unparalleled. Take the 2008 Summer Olympic Games in Beijing, for example. “The Chinese elites proclaimed the Beijing games a ‘century-old dream’ (百年梦想) of the Chinese people,” according to scholar Pang Zhongying.
Indeed, the International Olympic Committee, which organizes the Olympic Games, has continued to fuel this optimism, even in the midst of a pandemic. “In a world where collaboration is key to solving some of our most complex challenges, the Olympic Games have a vital role to play in uniting the world,” a spokesperson on behalf of the IOC told the HPR. “Few other events bring people together from so many countries, in celebration of resilience, solidarity and humanity.”
For a number of host cities, however, the expected benefits attached to the Olympics have not always turned out as expected. For example, take the “legacy projects” in Brazil. Although the IOC would later state that five Brazilian reals were invested into public infrastructure projects for every real spent on sport facilities, reports leading up to the 2016 Rio Olympics warned of questionable quality and delayed timelines. In a somewhat graphic turn, one of these projects, a coastal bikeway, collapsed just a few months before the Games were set to begin, killing two people.
The literal collapse of this project only scratches the surface of the challenges faced by both prospective and actual host cities, not only in the years leading up to the Games, but also in the post-Games legacy. Indeed, while the Olympic Games are a unique and powerful symbol of an increasingly interconnected world, the hurdles faced by host cities reflect the pressing challenges that accompany globalizing forces like the Olympics.
The Price Tag
Historically, these challenges have foremost been underscored by the massive costs associated with hosting mega-events like the Olympics. For example, the 2008 Beijing Summer Olympics ended up costing more than $40 billion, while the 2014 Sochi Winter Olympics were estimated to cost more than $50 billion. A study conducted by researchers at Oxford found that since 1960, all Olympic Games have ended up running over their budgets, and on average by 172 percent.
A major contributor to these costs is the staggering amount—billions of dollars—that have been cumulatively poured into sports facilities like stadiums, which end up serving little to no practical use to local communities. “The reason [these facilities] didn’t exist before almost invariably is it didn’t make economic sense for them to exist before. So if it didn’t make economic sense for them to exist before, why would it make economic sense for them to exist seventeen days later, when the Olympics … are over?” economist Dr. Andrew Zimbalist told the HPR.
These costs have in turn led to increased local resistance against hosting the Olympics and forced a significant number of prospective host cities to drop out of consideration in a bidding process governed by the IOC. For the upcoming Olympic Games, these cities included Calgary, Hamburg, and Budapest, which withdrew their bids following significant public opposition.
In December of 2014, as a response to issues like the price tag, the IOC adopted the Olympic Agenda 2020. One of the main reforms focuses on keeping infrastructure costs sustainable. In line with this goal, the IOC spokesperson confirmed that more than ninety percent of the venues at the Olympic Games in Paris, Milan-Cortina, and Los Angeles will be existing or temporary structures, as opposed to being constructed out of scratch.
“This has significantly reduced the costs of organizing the Games while ensuring their fundamental values of universality and diversity,” the IOC spokesperson continued. These reforms will likely reduce the burden of white-elephant projects, yet other economic costs remain, including those associated with facility upgrades, supporting infrastructure, and general operations. Much remains to be seen on how these additional costs will impact future host cities.
Beyond the apparent price tags associated with mega-events like the Olympics, it is important to consider the less-seen implications of globalization as well, not only to local residents of host cities, but also to the broader international community as well. At the local level, these include the impact of displacement. At the national and international levels, these challenges encompass the pandemic’s implications for tourism, as well as the significant environmental impacts that surround any mega-event.
Local Impacts of Globalization
From the perspective of housing, the development that precedes large, international events like the Games has often negatively impacted residents of host cities. In 2007, the Centre on Housing Rights and Evictions (COHRE) published a report concluding that preparation for the Olympics had cumulatively resulted in the displacement of millions of local residents, not only through inflated prices, but also through local regulations that forced people out of specific neighborhoods.
This concern around displacement is echoed by Jonathan Sri, the only councilor on the Brisbane City Council to vote against hosting the Olympics. With Brisbane having recently been elected as host city of the 2032 Summer Olympic Games, one of Sri’s main concerns is that increased development in Brisbane will adversely impact the city’s low-income, homeless, and other marginalized communities. “What we really need is public housing, and the Olympics won’t deliver that,” Sri told the HPR.
“Today, the IOC adopts a much more proactive stance on the topic,” the IOC spokesperson told the HPR, referring to displacement. The spokesperson pointed out past examples where Olympic Villages were later converted into housing solutions after the Games’ conclusion. In addition, the spokesperson maintained that the IOC has begun pressing this issue to prospective host cities as a human rights concern. However, it is still unclear how these future obligations against displacement will play out from a more practical perspective. In the end, stronger action may be needed to protect local residents.
Globalization, Tourism, and the Pandemic
Another aspect of globalization that has recently been challenged is tourism, one of the most-cited metrics of Olympic success. For many cities across the world, the opportunity to attract millions of visitors is an exciting prospect. During the 2016 Olympic Games, for example, the city of Rio de Janeiro received 1.17 million tourists—of whom more than 400,000 were foreigners – all over the span of a few weeks. In terms of revenue, the Olympics generated around $100 million USD for small- and medium-sized enterprises through nearly 5,000 contracts.
Within the context of globalization, however, the pandemic has exposed some serious cracks in the tourism industry. Data compiled by the United Nations point to COVID’s devastating impact on travel. From 2019 to 2020, international tourist arrivals fell by 74 percent from almost 1.5 billion to around 380 million, in turn making 2020 the worst year on record for the tourism industry. This report further estimated that the pandemic led to a $1.3 trillion loss in international tourism expenditure in 2020, the impact of which sums to about 11 times the loss recorded for this industry during the 2009 global financial crisis.
No region has been impacted more in this regard than the Asia-Pacific region, which saw a decrease of 84 percent in international arrivals as nations closed their borders and enforced strict quarantine measures. In March 2021, already following the postponement of the Tokyo Olympics, it was announced that no overseas spectators would be allowed at the Games. This has undoubtedly come at a significant cost: a study from January 2021 found that Japan would experience losses of around $22 billion if it barred spectators—of whom foreign visitors make up a significant proportion—from attending the Olympic Games.
It will ultimately take time to assess the full economic impacts of the Olympics in light of the pandemic However, for the time being, this should serve as a warning against depending too much on tourism. The fact that a single virus can have such a destructive impact on entire industries should raise concern, even if the pandemic itself turns out to be a relatively short-term development compared to the decades involved in Olympic planning and the broader context of globalization.
Globalization and the Environment
From a more long-term perspective that takes into account the likely return of tourism, it is further important to consider the environmental impacts associated with globalization. These include the significant carbon footprints associated with increased resource consumption and global travel. For example, more than 28,000 athletes and officials were estimated to fly to Brazil for the 2016 Rio Summer Olympics, in turn generating a significant amount of greenhouse gases. As mentioned above, however, problems like these are not just confined to the Olympics, but instead point to the longer-term challenges stemming from globalization.
“Our work on sustainability is an ongoing journey, but we have come a long way already,” the IOC spokesperson told the HPR. As a carbon-neutral organization, the IOC requires that all Olympic Games be climate positive from 2030 onwards. Until then, the IOC spokesperson also pointed out that the reforms prioritizing existing and temporary venues will have a significant impact on reducing the carbon footprint associated with the Olympics.
Despite these changes, there are still some who are not entirely convinced. As for the environmental impacts from the thousands of additional international air flights, Brisbane City Councillor Jonathan Sri said that they’re not offset or factored into the new model that the IOC is proposing, as far as I can tell.” Indeed, leading up to the 2016 Olympics, it was estimated that spectator transport alone would account for more than 2000 kilotons of greenhouse gas emissions. However, this is also an area in which each individual consumer could further consider their own role and responsibility.
Some Good News
Along the lines of globalization, the Olympic events will be arriving in Africa for the first time via the Summer Youth Olympic Games in 2026, following a unanimous decision at the IOC’s 132nd session in Pyeongchang to proactively engage nations in Africa about becoming hosts. “This marked the first time the IOC actively recruited and targeted a potential host,” the spokesperson from the IOC told the HPR.
Out of four nations invited to take part in the selection process, Senegal was chosen as the host. Dr. Mamadou Bodian, a scholar who is based in the capital city of Dakar, notes that his country has been a model of democracy and stability in a region where both are often challenged. “Senegal hosting such an event is a privilege,” Bodian says. “It’s [going to] be historical.”
Ultimately, the Olympic Games possess a unique ability to foster goodwill among people, communities, and nations. However, challenges remain. The pandemic has revealed gaps in the economic sustainability of tourism, and even if global travel may one day be restored, greater attention should be placed on the environmental costs associated with mega-events like the Olympics. Amid the optimism that typically surrounds globalization, it is further important to keep sight of local communities as well. At the end of the day, these communities are likely to feel the long-lasting impacts of the Games.