The IOC Must Do More to Help Struggling Host Cities

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First, the facts:

The Olympic Games has just opened in Rio de Janeiro this month and this event is the 50th (counting the Winter Olympics) since the first in 1896 in Athens, Greece. It beat three other contenders and was declared the winner in October 2009.

Since the games started, 119 cities in 42 countries have entered the biddings to host the Olympics up to the 2020 events.

The winning host cities, 52 in all, are located in 23 countries. Of the 23, 3 are in Asia and 1 in South America (2016.) The other 19 countries are in the Western hemisphere (Europe, Canada, and North America.) The United States has hosted the most number of events (8); it also has the highest number of bids.

It may be early to get excited, but Tokyo will host the 2020 Olympics after Rio. Tokyo previously hosted the Olympics in 1964 and is a vital city with the infrastructure necessary to host the Olympics multiple times.

Olympic Host Countries

Since hosting the Olympics entails incredibly high expenses for the host city and country, it isn't surprising that all the winning bidders are countries that are in the developed/high-income category. But what's in it for the host? Many theories abound, most of them on the economic gain that the city or country will derive from having the games in their area. Another reason why cities bid for hosting the games is the prestige it will bestow on their city.

Lately, though several economists are skeptical about the purported economic benefits especially since spending for the event has reached billions of dollars for infrastructure and indirect campaigns.

But it looks like hosting the Olympics is losing its sheen. Even the rich countries are backing out of their bids due to many factors - pressure from the public and the budget that could be better used for more practical matters. Tokyo is a rare city that had a financially successful Olympics in 1964. For the 2022 Winter Olympics, six cities from Poland, Germany, Sweden, Switzerland, Ukraine and Norway dropped out, leaving only Beijing in China and Almaty in Kazakhstan. Beijing eventually won.

For the 2024 Olympics, four contenders are awaiting the International Olympic Committee's (IOC) decision after Boston and Toronto backed out.

Cost of Hosting the Olympics

The Sochi 2014 Winter Olympics had an operating budget of US$51 billion, the costliest Olympics thus far. It is followed by the Beijing 2008 Summer Olympics by US$44 billion. Most of the money went to development and improvement of the city's infrastructure and transport system. But both countries, being under communist rule, are pretty tight-lipped about where the money actually went. Other host countries spent a lot less. But even the $6 billion that Vancouver shelled out for the 2010 Winter Games and the $14 billion for London's 2012 summer events are still amounts that are staggeringly high for most potential bidders.

Countries nowadays, including those awash in money, are putting practicality over prominence, realizing that having the games in their cities is a tremendous financial drain on government coffers. Building venues that cost millions for a few weeks' use only to be abandoned thereafter are economic insanity. The projected long-term return on investment is plain guesswork.

But for developing countries, hosting the biggest and most famous sporting event is a significant and possible life-changing event. From an unknown, it creates its identity, is catapulted into the limelight and googled by millions who may never have heard of it. But these middle-income nations don't stand a chance in the bidding process and if foolhardy enough to bid and win, could find themselves in bankruptcy post-Olympics.

What the IOC is Doing

The International Olympics Committee, in charge of the rules of the Games, has been trying to make the games more appealing to attract bidders for hosting. The recent No Boston Olympics and Toronto's canceled bid are eye-openers to the IOC members and if the regular host bidders are turning away, luring developing countries may provide the Olympics a much-needed shot in the arm.

Some of the recommendations of the Olympic Agenda 2020 are to simplify the bidding process. Take a look at them:

Amend the requirements for the games so that they retain their usefulness long after the games are over. The environmental, economic, social and sporting benefits reaped from hosting should be for the long-term. The venues built for the games should find the use for sporting, cultural and commercial activities so that the construction remains profitable after the Olympics are long over.

The Stockholm Olympic Stadium is the best example of an Olympic venue that is still being used today. It turned 100 years old in 2012 and has hosted numerous sporting and other events.

In addition, in Tokyo, the site of the 2020 Olympics, 85% of the event facilities are located within an 8-kilometer area. The stadiums will be shared with the 2019 Rugby World Cup, showing the IOC the technical ability to hold the event. Tokyo already has multiple cutting-edge sports facilities, and they are already developing and planning the network for the Tokyo Olympic Village.
The bidding costs should be reduced and delivery requirements made more transparent to attract more countries to join the bidding.

The Olympic Games should contribute to a sustainable heritage that will endure for future generations. In Sydney, Australia, and London, hosting the Olympics in 2000 and 2012 has led to the re-greening of hectares of bald land and creation of parks for the local people.

The Olympics can recover whatever luster it may have lost following the Salt Lake City scandal in 1999, corruption issues and misjudgments in games. By making it more accessible to other countries and disseminating the benefits it offers to participating nations, it will continue to be a source of inspiration especially for the youth.