Opinion | Columnists

Olympics: No medals in the economic arena

Financial impact of big-budget sports events on host cities has not been happy; postmortems on Atlanta, Barcelona, Sydney, Athens and Beijing all tell of hotel slumps, unpaid debts, empty parks and disillusion

  • By Simon Jenkins
  • Published: 20:00 August 6, 2012
  • Gulf News

  • Image Credit: AP
  • The royal barge Gloriana carries the Olympic flame along the river Thames, ahead of the 2012 Summer Olympics, on the final day of the Torch Relay, Friday, July 27, 2012, in London.

The Olympic Games is fine. The facilities at Stratford are as good as ever. The park, the flowers, the ‘Henman hill’ named after British tennis player Tim Henman, are a delight. The opening was appropriately zany. Above all, television’s celebration of youthful energy — when spared the endless BBC chat — is a diversion from the woes of the world.

Nor is it fair to chide the athletes for the London Organising Committee for the Olympic and Paralympic Games’ (LOCOG) incompetence, soldiers packing empty seats, public school bias or the weird plutocrats of the ‘Olympic family’, whom I saw last week tumbling out of limousines into Harrods.

So is it worth £9 billion (Dh51.68 billion)? No, of course not. The Games was never worth that. But those who doubted that a passably competent nation with unlimited cash could deliver two weeks of sport were wrong. The Games seems enjoyable and remarkably scandal-free.

More worrying is the impact on political discourse. Apparently any gesture of national prestige, glory and self-congratulation, once declared by government to be “worth every penny”, is beyond rational debate. To quarrel with any feature of the games is to be a whingeing, unpatriotic naysayer. Normally hard-headed politicians (and journalists) have gone soft in the head — flat-earthers, creationists, climate-change deniers.

Regeneration games

In 2005, Shadow Minister for the Olympics Tessa Jowell was gushing that Athens had been rendered “a changed place: cleaner, brighter ... vibrant and modern”, when it was already plunging off the cliff.

In his final bid for London 2012 in Singapore, Ken Livingstone dubbed it the “regeneration games”. Locog’s Lord Coe talked of the “Olympics profit”. British Prime Minister David Cameron burbles on about “making £13 billion”.

This is nothing to do with sport, nor with hosting the Games. It has to do with the manner of the hosting. There is a copious literature on the impact of big-budget sports events on host cities and how to avoid pitfalls.

Studies from the International Association of Sports Economists (IASE) are relentlessly cautionary. Postmortems on Atlanta, Barcelona, Sydney, Athens and Beijing all tell of hotel slumps, unpaid debts, empty parks and subsequent disillusion.

A study of Sydney by Australia’s Monash University found there was no tangible benefit “or economic boost” from the Games. An IASE report on Atlanta called Bidding for the Games: Fool’s Gold? found that “diverting scarce resources from more productive uses translates into slower rates of economic growth”.

Civic leaders talk desperately of “legacy” but no survey can find any. Barcelona saw hotel occupancy fall from 80 per cent to 50 per cent in the year after the Games. The city’s subsequent prosperity is now attributed to cheap flights and the Spanish boom. Beijing has seen no games-related uplift.

On London, an exhaustive 2006 report for the European Tour Operators Association pointed out that sport is a “notoriously narrowly focused” form of travel, with no spillover into wider tourism. “During the Olympics, a destination effectively closes for normal business”, it warned.

Mark Perryman’s spirited survey, Why the Olympics Aren’t Good for Us and How They Can Be, charts the same tale. More ironic is Mitchell Moss’s How New York City Won the Olympics. It points to how, by losing the 2012 bid, resources allocated to the Games were diverted to the Lower West Side and other, now booming, locations.

Big talk

There is no shred of evidence for claims still being made by the British government and others of an Olympics profit, fast weakening to a ‘promotional legacy’. Nor is there evidence of ministers recovering their brains. Last Thursday, the culture secretary, Jeremy Hunt, described talk of ghost London as “absolute nonsense”. The city was booming, he said, and “quids in”, he said.

The sports minister, Hugh Robertson, attacked ailing businesses, saying: “This is hardly a surprise ... there has been ample time to plan for [the Olympics].”

Their problem is they did. For years Robertson’s department told everyone to prepare for a boom. Hotels raised prices and took on extra staff. Bus and tube drivers were paid bonuses to cope with the crush. Central London was told to expect an invasion and that residents should stay at home.

This was the tone of every statement from the mayor, Boris Johnson, and his transport boss, Peter Hendy. Either these men were lying or their apparatchiks dared not tell them the truth.

Cash-rich bonanza

I can find no warning in recent years from any official body that August 2012 would be anything but a cash-rich bonanza. Last week, Johnson was still hyperventilating like Big Brother over tube loudspeakers that passengers should expect “a million extra visitors a day”.

He must have known this was rubbish. Reports were pouring in from London business associations of trade at hotel, restaurant, theatre and other tourist venues plummeting by an average of 30 per cent. With August always down, they had been told to greet a “games uplift”. They must have a strong case for a class action against the mayor, who has been milking the games for all the politics he can.

Clearly the authorities massively misjudged, but it was entirely because they refused to believe the evidence of past games. They were glory-blinded. Had the government said from the start that London was a rich city staging the Olympics as a costly but generous gesture to the world, there could be no further argument.

Ministers said no such thing. From Cameron down, they claimed the games would make money, now and, if not now, then some time in the future. This was plain dishonest. Everyone knows there is no Olympic legacy, but, as with Santa Claus, we dare not tell the children.

London will not recover the cost of the Olympics and may as well forget it. Having spent the money, Londoners should at least lie back and enjoy it. But the British should stop pretending. The real victims of London’s mind-numbing mendacity will be the poor and hapless citizens of Rio in 2016. They really cannot afford it.

— Guardian News & Media Ltd

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