While this is clearly good news, the total cost of the games – reported as $15.2bn – is still enormous, although fractionally less than the predicted final cost.
According to the UK Trade and Investment department, the internal target of generating $18.7bn by 2016 has already been surpassed, making the British Olympics a raging economic success. Here, Business Destinations looks back at some of the most successful global events in recent history – and some of the biggest failures.īritish Prime Minister David Cameron started his address at a business conference in Glasgow in July by suggesting the Olympic Games held in London two years ago boosted the UK’s coffers by a staggering $23.8bn. If no one is prepared to make the investment, then the whole model must be readdressed. It is a worrying prospect for the future of mega events. In times of tight budgets, it’s hard to justify spending billions on largely superfluous infrastructure. New York and Philadelphia also withdrew bids to hold global events this trend is gathering pace. Stockholm and Krakow have tactically removed themselves from the bidding to host the 2022 Winter Olympics, and only four cities have stepped up to the plate.
It appears the tide is changing where once cities and countries were falling over themselves to host these events, now they are turning their backs. However, Moody’s estimated that despite the fanfare, the Brazilian economy will still underperform the global economy by as much as four percent this year, and it is unlikely that any positive economic impact will be felt by the lower echelons of the population. It is hard to calculate exactly how much revenue a mega event brings in because host countries’ economies are affected indirectly, and it’s impossible to put a value on publicity and media scrutiny. Mauro Guillen, Professor of International Management at the University of Pennsylvania told Forbes that “rarely, if ever” do Olympic Games generate a profit for the host nation. On the other hand, the Athens Olympic Games in 2004 and their exorbitant cost have been linked to the later collapse of the Greek economy. The Barcelona Olympic Games of 1992 have been credited with regenerating a struggling city and putting it in the spotlight of international tourism. But is this discrepancy in returns unique to the Brazil World Cup, or final irrefutable proof that hosting big events is simply not worth it? The Brazilian Ministry for Tourism suggested the World Cup and upcoming Olympic Games will bring over $3bn to the economy, and potentially more in investments but with a price tag at least three times higher than potential returns, suddenly a month of fun seems harder to justify. But as soon as the games were underway, videos started appearing online of wobbly railings and unfinished work in the arenas. Brazil invested heavily in infrastructure development that was not strictly related to the games, but was fundamental to their smooth running, and many of the stadiums had to be built from scratch. It is also difficult to pinpoint exactly where all that money went.
While it is difficult to say exactly how much it cost – estimates range between $11bn and $15bn – it is clear that this edition of the event cost considerably more than any other. The 2014 World Cup has been one of the most expensive global events ever put on.