How global sporting events can strike economic gold
International high-profile events almost always gives their host cities a short-term economic and cultural boost. But that's only half the story.
Fast forward to 2017 and London’s Olympic Games appear to have given the city, particularly its eastern boroughs, a lasting economic lift. The levels of investment that the games brought rejuvenated Stratford, a formerly impoverished and outlying London district with a lackluster real estate market.
Now it’s a busy hub, easily accessible from a range of transport lines – many of them built for the games – with one of the largest urban shopping centers in Europe at its center. Not to mention the Queen Elizabeth II Olympic Park, a swathe of greenery left over from the 2012 Games.
Katie Kopec, JLL’s Director of Development Consultancy, played a vital role in the planning and delivery of London’s 2012 Olympic Games.
“London 2012 helped move London forward and put it back into people’s minds as a real cultural capital of the world,” she explains. “It also acted as an anchor for the regeneration of the east of London that has changed the city’s commercial focus. Stratford has now become an office destination, which wasn’t the case before. There’s also been investment in family housing to keep people in the area. The Olympic Games were a shot in the arm to put Stratford on the map.”
Many of London’s Olympic venues have been successfully reused. The Athletes’ Village has been transformed into housing. The Aquatic Centre is now a public swimming pool and the stadium itself is being redeveloped for use by West Ham United Football Club.
Kopec recommends that cities bidding for a major sports event should put its legacy at the centre of their thinking. “Think about your legacy before you start. These days, your venues must be sustainable. You cannot build white elephants that won’t be capable of reuse,” she says.
She admits that an 80,000-seater venue can be hard for a city to absorb and so insists that its long-term uses must be thought through. “Is there anything else that you can bring to the land around the site – such as housing? From a financial point of view, you must be able to provide security, transport, and good air quality. It’s important to deliver a first-rate experience for the paying public, the athletes and the city itself,” she adds.
But although it’s possible to plan a physical legacy, it’s much harder to predict how hosting a big sporting event can change the psyche. Consider the human elements that made the London 2012 games stand out in people’s memories – such as the thousands of volunteers who helped London’s games to run smoothly and boosted the feel-good factor.
“Who’d have known how much difference those volunteers at the Olympics would make?” asks Katie. “That had lasting effects for the whole global volunteering movement.”
It’s those unexpected, intangible experiences that also give host cities an abiding legacy – both economically and culturally.
Around a million foreigners visited Rio de Janeiro when it hosted the Football World Cup in 2014, buoying its tourism and service sectors. But on reflection, it emerged that a huge slow-down in productivity stunted the event’s short-term economic benefits because workers took time off to watch the matches.
According to the Wall Street Journal the Cup caused a serious economic dip – for example, vehicle production in Brazil plunged 33 percent during the month of the tournament. Some host cities even declared municipal holidays on days when matches were played in local stadiums.
Longer term, local governments across the country have been left with the financial head-ache of running stadiums built for the tournament and have had to adjust their civic budgets to accommodate another public facility. One city even cancelled its annual carnival celebrations in 2015. Its 72,000-seater stadium costs £62,000 to run on match days and none of the local clubs have large enough fan bases to support this.
Beijing’s 2008 Olympics were deemed a success for China, positioning the city on the global stage as an important cultural and economic capital. Beijing vastly improved its air quality to welcome hundreds of thousands of international visitors – and the city’s air improvements are still key, helping Beijing secure its successful bid for the 2022 Winter Olympics.
But it’s a mixed legacy for the most expensive games in the history of the Olympics, which cost £20 billion. The 2008 famous ‘bird’s nest’ stadium has since hosted the world athletics and the ‘water cube’ aquatic park has been transferred into a popular family-day-out water park. But because China’s initial Olympics-planning seemed to focus more on delivering a spectacle rather than a lasting legacy, the Olympic Park’s primary use nowadays is a stop-off on the Beijing tourist trail.