UF experts weigh in on Olympics economy and tourism

The 2024 Olympic and Paralympic Games will take place from July 26 to August 11 in Paris and will be the largest event ever organized in France, according to the International Olympic Committee. With event organizers anticipating a $7.3B economic benefit to the region, UF faculty share expertise and context on how this global event affects the economy and tourism of an Olympics host city. 

Amanda Phalin, Ph.D., is an instructional associate professor and economist in the Management Department at UF’s Warrington College of Business. 

As Paris prepares and Los Angeles looks ahead, is it a good investment for cities to host the Olympics? 

It may sound surprising, but no. Only one city has ever earned a profit from hosting the Olympics — Los Angeles in 1984 — so, while LA28 may turn out to be a good bet for our friends in California, the long-term return on investment for other cities is negligible to negative. 

Hosting the games is massively expensive — from a bid that can cost more than $100 million to constructing pricey infrastructure, like stadiums, that may sit largely unused after the big event (Olympic-built venues in Athens and Beijing, for example). Other infrastructure that may need to be built or expanded/updated includes housing/hotels for athletes, staff, and tourists; transportation, such as roads, airports, and train stations; and security. Even though broadcast revenues now regularly top $1 billion, the International Olympic Committee keeps more than half.

If you could select a future Olympics host city, which one would you recommend?

I think there is one place that has the potential to be the best, most profitable Olympics host in history: Florida. I see Orlando as the host city, but events could take place at our many world-class athletic facilities around the state — whether we’re talking professional arenas in Tampa and Jacksonville, or state university venues like The Swamp in Gainesville. One of the main reasons the Los Angeles 1984 Olympics succeeded financially was because it took advantage of the existing infrastructure in and around the area. 

With its transportation and venues, and its experience with huge inflows of tourists, Florida already has it all and already does it all extremely well. While other Olympic cities may not have experienced long-term benefits, I think an innovative public-private partnership between the state government and attractions like Disney and Universal could create an Olympic experience for visitors — and an economic opportunity for Floridians — like no other in the history of the games.

How do the Olympics affect the apparel and advertising industries? 

This is definitely a time for brands to be showcased, and industry observers expect an increase in sales as a result. Some of the brand names are both well-known and from teams’ home countries: Nike and Ralph Lauren from the United States, Lululemon from Canada, Armani from Italy, and LVMH Moët Hennessy Louis Vuitton from France. Some countries are using the moment to highlight smaller labels: Ireland’s uniforms are by New-York based Irish designer Laura Weber, and Nigeria has partnered with Los Angeles-based Actively Black (a Black-owned athleisure wear designer).

However, we can’t talk about apparel without acknowledging that the 2024 Olympics are taking place in one of the world’s fashion capitals. Notably, the summer Paris Fashion Week has been moved up a week to accommodate the games. 

Rachel J.C. Fu, Ph.D., is a professor and the chair of the Department of Tourism, Hospitality and Event Management at UF’s College of Health and Human Performance, where she is also the director of the Eric Friedheim Tourism Institute.

How can host cities place greater emphasis on environmental responsibility surrounding the Olympics? 

Host cities can enhance their public transit systems, promote public transportation, encourage carpooling, and support non-motorized transport like biking and walking. They can also construct energy-efficient buildings, utilize renewable energy sources and sustainable materials, and initiate environmental awareness campaigns, ensuring that all Olympic facilities and infrastructures provide long-term benefits to the community.

Do the Olympics have a positive impact on tourism in host cities?

Yes, because the Olympics directly boost local tourism industries, leading to increased business for hotels, restaurants, and local attractions. Additionally, the Olympics improve infrastructure, such as transportation and public amenities, which enhances the quality of life in the community and boosts the city's image as a tourist destination. The Olympics also benefit tourism for the host country by increasing global visibility and stimulating tourism-related businesses, creating opportunities to promote the area’s heritage, natural sites, culture, and reputation.

How do the Olympics impact the hospitality industry of a host city? 

The Olympics increase the demand for services in hotels, restaurants, and other hospitality sectors. This helps create more employment opportunities to accommodate the surge in tourists, and leads to upgrades and investments in lodging, dining, entertainment, and service industries. However, it is crucial for the hospitality industry to prepare for the post-Olympic period to address potential overcapacity issues after the visitor spike subsides.

Kyriaki Kaplanidou, Ph.D., is a professor and the director of the Sport Event Management graduate certificate program in the Department of Sport Management at UF’s College of Health and Human Performance.

How do the Olympics affect the lives of local residents in host countries?

Hosting the Olympics is a complicated endeavor that engages various sport stakeholders, educational programs, residents, businesses, and government organizations throughout the country. This creates a dynamic exchange among the local parties involved.

But residents in host countries can benefit from opportunities that arise as a result of the Olympics, such as Olympic education programs in local schools and housing options after the Olympics are over (for example, Olympic Village units are given back to locals). Quality of life among locals can also be enhanced by infrastructure improvements, volunteering opportunities, and cultural interactions with visitors from other countries. The youth in the host country can even benefit from having the opportunity to compete on such a large stage on their home soil. 

The larger benefit for the host country is the promotion of the destination image through free media coverage. This ultimately helps local residents feel prouder of their country, which contributes to a higher quality of life.   

What are the greatest benefits of hosting the Olympics? 

One of the greatest benefits, which is not extensively discussed in the literature, is the human capital development for those working for (or affiliated with) the Olympics. There is a networking establishment among the businesses that have to deliver on various goals related to the Olympics, such as marketing, security, transportation, urban planning, and sport development. It is what I call in my research “business legacy” from hosting the Olympics. 

The infusion of funds in the local sport development ahead of the Olympics, and the catalytic nature of the event, creates positive outcomes for the host community. These outcomes include better significant tourism infusion, improved or new sport facilities, better transportation, and more cultural experiences that might have taken much longer to materialize had it not been for the hosting of the Olympics. The social impacts, related to increased volunteering opportunities and enhanced sport programs for residents, are just added benefits.  

Are there any downsides of hosting the Olympics? 

A lot of discussion typically revolves around opportunity cost, such as spending money on improving a stadium when money is needed in the local education or health system. These factors all depend on the host country, its political systems, and the transparency of managing the funds with the public. 

Another major negative outcome is the large financial investment that is needed to host the Olympics, given the increasing number of athletes, sports, and adaptations needed in sport facilities to host the event (based on the requirements of the International Sports Federations). I would add that financial investment depends on the International Olympic Committee expectations, which have been adjusted to face the new reality of cities being reluctant to spend so much money without a clear plan for the return on investment. 

Brittany Sylvestri May 21, 2024