The Olympics' Effect on the Host Country's Economy
When countries and cities bid on the Olympic Games, one of the main reasons they do it is for the chance to boost the economy in that city. The Olympic Games attract thousands of visitors and media attention. During the time that the games are held, you may see a sharp increase in tourism, revenue and a big boost to profits for all of the businesses in the area. However, hosting the Olympics may provide only a short-term economic benefit. It is important to fully understand how the benefits of hosting will work.
Before the Olympics
There is often a boost in the economy just before the games come to a country. Most areas need to create additional venues, improve road construction and take time to plan to handle the crowds. Government will fund not all of the costs, since many businesses, such as hotels and restaurants, will begin building in the area to take advantage of the increased sales. The added building and construction costs can boost a failing economy. It can help an area that may be lagging behind economically. However, the government may take on additional debt to cover some of the expenses, which may result in raising taxes. That may end up hurting the economy in the long run.
During the Olympics
The most noticeable upturn in the economy will be during the Olympics. During this time, visitors from all over the world will be coming to see the Olympic events. This will increase revenue in travel sales and in hotels and restaurants. This means that many small business owners may benefit from the Olympics being held in the area. Some private citizens may opt to rent out their home for the Olympics and may benefit from the additional money that will bring in. Nearly every type of retail business will benefit from having the Olympics in the area. Often the taxes collected during the actual Olympic events will be enough to pay back the additional debt the government accrued while preparing for the Olympics.
After the Olympics
If the tourism board works hard, they may be able to attract more conferences and sporting events to the venues that were built for the Olympics after the games have ended. Tourism may also increase to the area for a short time, as people are interested in seeing the area where the Olympic games took place. The big economic push may not stay, and some of the smaller businesses may suffer if chains are competing with them for business after the Olympics are over and the economy returns to the stat it was in before the Olympics. It is important that the city and state governments work on a plan to continue to attract tourists and conferences to the area.