The Olympic Myth 

A European report concludes that the games do more harm than good for local tourism.

click to enlarge The nearly deserted main entrance to the National Museum of Art in Beijing, April, 2008--just four months before the Beijing Olympics.

The nearly deserted main entrance to the National Museum of Art in Beijing, April, 2008--just four months before the Beijing Olympics.

Deanna Isaacs

International oddsmakers still had Chicago a hair's breadth behind Rio in the contest for the 2016 Olympics last week. But here on the shores of Lake Michigan, with the City Council signing off on an unlimited Olympic expense account, it feels like a done deal. Unless the IOC's nose is still out of joint over the U.S. Olympic Committee's abortive attempt to cut its own deal for an Olympic cable network, it's hard to see how even the world capital of sexy can stand a chance against the Richie Daley-Pat Ryan-Oprah-Obama machine. Meanwhile, bid committee chair Ryan gets local hearts thumping with his prediction that the games would bring Illinois $22.5 billion.

For the city's cultural institutions, the $7 billion predicted to come directly from increased tourism is the main focus. According to an economic-impact study commissioned by the Chicago 2016 committee and released late last year, "the number of visitors to the city will increase before, during and after the games," and the $7 billion would roll in over an 11-year period starting in 2011. Tourists are also supposed to be the primary force behind job creation—"a major underpinning" of the predicted impact of the games, because, in the alternative world of impact studies, jobs have a magical "multiplier" effect based on the idea that people who get jobs spend their pay on goods and services, which generates yet more economic activity. With the study's muscular multiplier in play, $8.4 billion in anticipated direct spending (on games prep and operation, as well as by tourists) balloons into Ryan's $22.5 billion bounty.

Written by a pair of academics at California State University, Sacramento, the economic impact study doesn't talk about permanent jobs, like those created when a factory is built. It deals in something called "job years," which are calculated by counting up the temporary and part-time gigs that a onetime special event is expected to generate. By that criterion, the Olympics would spawn a total of 315,000 job years, two-thirds of them "in tourism-related industries, including hospitality and entertainment." Touting "long-term" benefits in a December 2008 announcement, Ryan said the study "reinforces the economic legacy, which we've seen play out in past Host Cities." According to the 2016 committee, "Chicago's enormous visibility on the global stage . . . would have a direct impact on the city's tourism industry."

When I read that, I was reminded of my visit to Beijing in April 2008. Four months before the opening of the Olympics there, I could have rolled a bowling ball through the empty galleries of the National Museum of Art. And the big, new, centrally located hotel where I stayed was virtually empty. Guides in Beijing and three other Chinese cities I visited complained that the games had brought their business to a near halt.

That wasn't a fluke. The dampening effect the games have on host-city—and host-nation—tourism in the periods before and after the big event (not to mention the shut-down-city effect during) has been cited by numerous observers. Officials at Atlanta's Fernbank Museum of Natural History and the Atlanta Botanical Garden, for example, say they had significant declines in attendance for 1996, the year of the Atlanta games. The slump is usually presented as a bump in the road to the gloriously increased tourism that's sure to be the games' lasting legacy. But some of the folks who study this stuff, including Mark Rosentraub, a professor of sport management at the University of Michigan, call that a fantasy. Rosentraub says the Olympics is "a good thing to do" if you manage it properly and don't build a lot of infrastructure. But it's not going to have a long-term impact on the host city's economy, and "there's no evidence that it results in a sustained increase in tourism."

A fascinating read on this subject is the Olympic Report by the European Tour Operators Association (2006, updated in 2008), which came to the conclusion that "there appears to be little evidence of any benefit to tourism of hosting an Olympic Games, and considerable evidence of damage."

According to the ETOA, in fact, "there is no strong link" between hosting any sporting event and growth in tourism. "The audiences regularly cited for such events as the Olympics are exaggerated [and] attendees at the Games displace normal visitors and scare tourists away. Both Sydney and Barcelona had 'excellent' Olympic Games, but their tourism industries have not significantly benefited."

The assumption that billions of people will watch the Olympics on TV and then beat a path to the host city is wrong on both counts, the ETOA argues. "Sports fans watch television in order to enjoy the sport. . . . This activity is notoriously narrowly focused." As for the global TV audience, the 3.9 billion viewers widely touted for the 2004 Olympics in Athens would mean that 80 percent of the world population with access to electricity was in front of the tube. What isn't generally understood, the ETOA claims, is that 3.9 billion was the potential, not the actual audience.

The ETOA also notes that people who travel for sporting events are "unlike regular tourists, and more like business travelers." They "tend not to spend money on [other forms of] leisure and entertainment, and when not in stadia they watch events on TV rather than engaging in other activities." The greater Los Angeles area recorded a slip in theme park revenue in 1984; in 1992, resort business on Spain's Costa Brava languished. And though hotel construction is fueled by the buildup to the Olympics, hotel occupancy rates drop off a cliff once the two-week event is over. Hotel occupancy in Barcelona, for example, was 70 percent the year before the 1992 Games, but fell to 54 percent for two years afterward.

The ETOA report also points out that while Barcelona is frequently invoked as a host-city poster child and has grown as a tourist destination since the games, it lags behind comparable nonhost cities like Dublin and Prague.

In Sydney, the 2000 games were followed by a three-year decline in international visitors. Terrorism got most of the blame, but the ETOA notes that the decline was in effect months before the 9/11 attacks, in spite of the broadest tourism campaign ever to accompany the Olympics to that point. The study quotes Australian tourism official David Mazitelli: "The impacts were short term and were contained within a relatively tight geographic region. The forecast of a remaining strong impact for the four years following the Games did not eventuate."

In 2007, the Chicago Office of Tourism reported 46.3 million visitors (an interesting number, since New York City reported an even 46 million for the same year) spending $11.5 billion. Just 1.1 million of those were leisure travelers from overseas countries, and Chicago ranked only ninth among U.S. cities as a destination for international tourists. That's why, for example, Chicago Architecture Foundation head Lynn Osmond supports the bid, which she calls "global positioning" for Chicago. "We deal so much with the international visitor, and we realize all the time that nobody knows about us," Osmond says. "We are a flyover city. People are always telling us they had no idea that Chicago is so beautiful."

But whether tourism will get a boost from adding Olympic rings to rat-a-tat-tat and Michael Jordan is anything but clear.

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