The Economic Impact of the Olympic Games

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Abstract

Since de Second World War , there has been a substantial increase in the range of events worldwide, varying from single day fetes and fairs to major sporting and cultural festivals. Special events are seen to have the ability to produce a wide range of significant economic and social benefits for communities and regions. In seeking to understand the field of special events, I took as a case study the Olympic Games mega-event.

KEYWORDS: special events, Olympic games, mega-events, economic impact, investments

INTRODUCTION

The fundamental aim of this research is to measure the economic impact of the Olympics globally, regional and local. During the 1990s, there has been a growing number of people advocating a move away from mass tourism to forms of tourism that will be sustainable and will deliver greater economic benefits. Often these alternative forms of tourism have been categorised as ‘special interest tourism’, the important characteristics of which have been claimed to be low volume and high value (Hall 1995). There are many forms of special interest tourism including ecotourism, heritage tourism, cultural tourism, adventure tourism, rural tourism, industrial tourism and special event tourism. Therefore, the global special events market grew up rapidly to saturation. In order for the special events to survive in a saturating market, it become more important for special events to be tailored specifically to meet the needs of the consumer. This requires a detailed understanding of the consumer behaviour in relation to special events.

THE GLOBAL ECONOMIC IMPACT ON THE TOURISM DESTINATIONS

The Olympic games are international mega-sports events which are televised globally. Although they are one-off events, they contribute significant economic benefits to the host cities (Gratton, et.al 2000). The Ancient Olympic Games began at Olympia in Greece in 776 BC and continued until the Christian Emperor Theodosius 1 aboolished them in AD 394. The modern Olympic games started in the late 19th century, when Pierre Fredy de Coubertin rekindled them and established the four-year cycle hosting in different countries and cities. The Olympics is arguably the world’s largest mega-event with considerable economic, social and political costs and benefits for the host city or country (Hall, 1992). Given the potential economic benefits many cities have been attracted to participate in the bidding competition for the right to host the Olympic Games. The number of participating countries for the Summer Olympic Games has increased gradually from 14 countries in the first Olympic Games in 1896 to 121 countries in 1972 Munich Olympics. In particular it jumped quickly after the 1984 Los Angeles Olympics to as many as 200 participating countries for the Athens Olympic in 2004. On the other hand, the Winter Olympic Games began in 1924 with 16 countries and the number of participating countries gradually increased to 27 for the 1980 Lake Placid Olympics. After the Sarajevo Olympics in 1984, the number increased to 80 countries for the 2006 Turin Olympic Games (IOC Official Website of the Olympic Movement). The economic impact of an event can be defined as the “ net economic change in the host community that results from spending attributed to the event”. In that sense it is necessary to comprehend that the direct income of a mega-sporting event that is, from sources such as ticket sales, television rights and sponsorship deals-does not necessarily contribute to the economic development of the host community, since such income usually covers the costs of organizing the event itself. The economic contribution of mega-sporting events is primarily thought of in terms of the possibilities they provide of increasing the awareness of the city or region as tourm destination and the knowledge concerning the potential for investment and commercial activity in the region. Therefore they can attract more investment and visitors,...
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