16/04/2024
For any young athlete, the dream of participating in the Olympics, and perhaps even winning a medal, has a potent appeal. But the odds against such an achievement are long. For every athlete who is selected to represent their country, a hundred miss out, perhaps by a matter of milliseconds.
The odds facing a would-be Olympic host city hoping for economic benefits are much the same. Until recently, aspirants spent hundreds of millions of dollars competing for an opportunity more likely to lead to financial disaster than to a positive long-term outcome.
The losers in this contest walked away with nothing, while the winners took on an almost unmanageable commitment.
In the past 50 years, only Los Angeles and Barcelona have looked like clear winners. Los Angeles was the only bidder in 1984, benefitting from a US location and a big increase in the value of TV rights. Barcelona, almost uniquely among host cities, saw a sustained increase in tourism after the event.
Set against those positive experiences are a mixture of financial disasters (Montreal 1976, Athens 2004, Rio 2016) and economic disappointments (most of the rest, including Sydney 2000, which some experts say reduced Australian household consumption by $2.1 billion) along with some costly showcases for authoritarian regimes (Moscow 1980 and Beijing 2008). Cost overruns have been routine. Anticipated benefits such as enhanced tourism have been hard to detect.
The fate of purpose-built Olympic stadiums is particularly noteworthy. The stadiums built for the Athens Olympics, which helped push Greece into bankruptcy, are now largely deserted and derelict. The stunning Beijing ‘Bird’s Nest’ stadium remains a tourist attraction but is hardly used for its intended purpose.
Sydney’s Homebush stadium is still in use but has performed sufficiently poorly that the NSW Government proposed to demolish and rebuild it barely 15 years after its opening (COVID-19, and perhaps commonsense, led to the abandonment of this proposal).
Can Brisbane do better?
Still, the leading proponents of the Brisbane 2032 Olympics, former Lord Mayor Graham Quirk and former Queensland Premier Anna Palaszczuk were hoping for a big spectacle, with a legacy of long-term benefits, notably including stadiums. The proposal included the demolition and rebuilding of the iconic Brisbane Cricket Ground, also known as the Gabba, and a brand-new Brisbane Arena built over the rail lines at Roma Street.
A consultant’s report was produced touting massive benefits, including 91,600 new jobs.
The reality is more complex. The vast majority of workers hired to build Olympic venues will be shifting from other, arguably more important work, such as building homes, schools and hospitals. There might be some benefit if the Olympics happen to coincide with a depression in the building industry. But that can’t possibly be predicted in advance. A better way to deal with economic fluctuations is to maintain a bank of “shovel-ready” projects that can be implemented when and if they are needed.
Fast-forward to 2024, and we have a new Premier and a new Lord Mayor more focused on potentially dire financial outcomes than on Olympic glory. The most grandiose element of the original plan, the Gabba demolition-and-rebuild, has been scrapped and replaced with an upgrade of the Queensland Sport and Athletic Centre (QSAC) at Nathan, while Brisbane Arena has been moved to a cheaper site in the Roma Street Parklands.
Continued vigilance will likely be needed to avoid a cost blowout. For example, the trend towards ever more elaborate, and costly, opening and closing ceremonies needs to be stopped. And the share of returns going to the International Olympic Committee needs to be carefully monitored.
Despite optimistic estimates before the event, few host cities have experienced a sustained increase in tourism after holding the Games. This is, however, a point on which the Brisbane games may differ. Most of the cities hosting the games (Los Angeles, Tokyo, London, Paris) are major global cities. No one needs to be told about their attractions.
Brisbane, and Queensland more generally, are not in this league. Outside some niche markets, we are not high on the list of most-visited destinations. But when people do come here, they love it. The tourism sentiment index, based on an analysis of 1.6 billion online conversations and content pieces, ranks three Queensland destinations (Cairns at number nine, Sunshine Coast at number three and Whitsundays at number two) in the top 10 worldwide. Noosa, Brisbane, the Scenic Rim, Magnetic Island, Port Douglas/Daintree and the Gold Coast all make the top 100.
That suggests that if people can be enticed to visit once for the Olympics and take a holiday in the state, they are likely to return and encourage others to visit.
Even with careful management, the Games will almost certainly require substantial net public spending for which the benefits are largely intangible. A large component of the intangible benefit is the enjoyment of residents in having the chance to attend Olympic sporting events in their hometown, rather than paying for air travel and high-price hotel accommodation. More generally, there is the civic pride in holding the event. That’s substantial but hard to value in monetary terms.
Whether or not it was a wise decision to host the Games, they are coming in 2032. As individual residents of Brisbane, the best thing we can do is enjoy them.