The London 2012 Olympic Games - Essay Example

Synergies of ‘mega-event’ sports competitions and economic development: The London Olympic Games Date of Submission Introduction Countries and cities have glared to the international media a stiff competition for a place to host mega sports event. The rights to host mega sports events such as FIFA World Cup, Olympics and the Common wealth games have been up for grabs amongst nations and cities all over the globe. Mega sports events are extremely huge and attracts huge attendances and viewership across, the globe, for instances, the 2012 Olympic games held in London attracted participation from 205 countries. The universality of these mega events all over the world is not in question, and neither is the extent of its domineearence. Beyond the scene that regards hosting such events, there are certain synergies of mega-event sports competitions that could result in economic development to the city or even the entire country as a whole. Economic Potentials of the London 2012 Olympics There was a great deal of focus on the economic potentials of the 2012 London Olympics for the city and the country as a whole. Articles have been penned on the economic impacts of the London Olympics not only for the economy of the metropolis, but for the entire country as a whole. According to Great Britain (2012), predictions the GDP growth could have been affected by the Olympics games. The associated ticket sales that had been prepared for the 2012 Olympics games had been estimated to be about 0.1 percent of the UK economy, and the economic effects would be realized in the final quarter of the year (Great Britain, 2012: 45). According to the Word Bank (2012) the economic growth for the United Kingdom’s economy was 0.3%m therefore a contribution of 0.1% on the UK’s economy represents a significant contribution to the economy. on a micro economic level, sports events attracts a hordes of sports fans who troupe into a city’s hotels, restaurants, and businesses and bring forth a lot of money to such functions and the auxiliaries. According to the Office for National Statistics (2012) the visitors to the city during the games summed to over half a million spending an estimated average amount of £1,290 per person, twice the amount spent by the non Olympic visitors. Preparations for these games involve a great deal of preparation which covers a huge outlay of funds for infrastructural developments. The high level of standards demanded by the International Olympic Committee, which includes the infrastructural developments as well as the security arrangements, makes an intrusion of the tax payer’s pockets mandatory. But despite the huge costs that these events have on the economy, profit must certainly arise out of such events and the London Olympics is not an exception. As with the summer Olympics in London 2012, there is a significant capital expenditure on the improved facilities and novel projects, funded from the public coffers, as well private investments such as additional hotel rooms and other tourist related facilities. Further, the construction of other public infrastructure that had been planned for a later period may be brought forward in time in light of the award of the chance to host an event. The new highway to the inner city in London and the new light rapid transit were some of the projects that were brought forward as a result of the then 2012. The operating expenditures that accompany the mega sports events are significant; though at times attract huge swathes of volunteers, but due to the mighty size of the events huge security facilities are arranged for the event. The large amount of funds allocated for hosting the summer Olympics and the resulting economic outlay has never been subjected to academic research, but the data collected from the Summer Olympics in London points to a positive correlation. According to Kasimati (2003), summer Olympics should not be considered with the short term economic outlook on the host city, but the potential benefits these host cities can provide to the residents in the long run. Kasimati (2003) relied on longitudinal study from 1984 to 2004 to predict the importance between the host city and the long term economic benefits. Nonetheless, economic impacts that arise out of mega events are often exaggerated as the supply side of the constraint such as investment crowding out and45 the displaced tourists who would visited London had the host status been given out to another city. Impacts on the Long Term Tourist Trends Net economic benefits to host a mega event from the time the event is awarded till after the hosting, can degenerate a lot benefits in terms of tourism. The long term effect from tourists trouping to the city in the long term, according to economic predictions will be sustained. This is an obvious advantage to the host city and country. From the perspective of the organizers, tourist might form the basis of their target and therefore it becomes necessary to ensure that it is attractive to the targeted segment as well as meeting the needs of the tourists. Hosting a large popular international event is often seen as the ideal way for a city or even a country to position them and advertise on the world map and hence international events such as the Olympics Games are perceived as the perfect methods to develop and recreate tourist products that can attract tourists on a large scale. The 2012 London Olympics will make a U.K. £ 16.6 billion contribution to the U. K. GDP between the years 2005-2017 of which 12% is derived from tourism activities. The games are projected to generate a net increase in visits by tourists to a number exceeding U.K. £ 10.8 million in the period 2005-2013 with extra expenditure of 2 billion, 1 billion being generated after the games. (The Economic Impact of the London 2012 Olympic and Paralympics Games, July 2012). The estimated benefits in tourism trend are from 2005, when Great Britain won the bid to host the Games to the next five years after the Games and comes mainly as a result of the construction of sites for the Olympic Games sites which would boost tourism. According to Lloyds TSB, about thirty percent of the gains estimated to be about U. K. £5 billion will be realized five years after hosting the event when the sites used for the games are converted to other uses and tourism continues to see a remarked boost. The “happiness effect” felt at the games also have the effect of boosting the mood of the public thus encouraging spending by consumers. The 2012 Olympic Games also attracted 10 million visitors that included 1.2 million visitors from overseas as well as generating estimated revenue of U.K. £ 2 billion of GDP across England, Scotland and Wales through game-related tourism. The popularity of the Olympics is only comparable to that of the FIFA world cup, but unlike the latter it attracts competition from a large number of countries. Hosting of these sports events remains a dream of every country and every city; however, from the standard demanded, cities in developed countries or those nations with large GDP are the ones that attract the games. The residents of the city derive serious impacts on the well being or welfare of the citizens of that particular city. These impacts which may be economical, social or environmental in nature may come in advantageous or disadvantageous from to the bidding city. It is imperative that before the awarding of the Summer Olympics games to the London 2012, a lot of cities all over the globe including Moscow and San Diego made their case known. In framing its bids, the London bid committee envisaged that London will benefit immensely in its socio-economic sectors. However, from previous debate and research of hosting of Olympics in other areas, it has been proven that the impacts may be myriad depending on the circumstances. This means that while other countries and cities have successfully hosted the Olympics and reaped benefits from hosting the Olympics, others have miserably failed to realize any benefits of hosting it; others have failed miserably to realize any benefits. For instance, while it was believed that the Sydney 2004 Olympics would result in massive economic and social benefit to the city, a raft of analysis proved contrary. After this tournament, the average city had reduced income as compared to the predictions of the benefits as opposed to what had been predicted. The 2006 World Cup held in Germany raked more than $194 million for the country; however, individual cities which part hosted the event had nothing to talk about. Conclusion There has been a close relationship between the synergies of the so called ‘mega events’ sports competition and the resulting economic development to the host country and city. The London 2012 Olympic Games is not an exception as the bidding committee predicted certain windfall that would have a multiplier effect both in the short run and long run in terms of economic development. Reference List Kasimati, E. (2003). Economic aspects and the Summer Olympics: a review of related research. International Journal of Tourism Research. 5, 433-444. Great Britain. (2012). Office for Budget Responsibility: economic and fiscal outlook. London, Stationery Office. Office for National Statistics. (2012). London 2012 Games attract over half a million overseas visitors in July and August. http://www.ons.gov.uk/ons/rel/mro/news-release/london-2012-games-attract-over-half-a-million-overseas-visitors-in-july-and-august/ottnr111012.html The Economic Impact of the London 2012 Olympic and Paralympic Games. (2012). Oxford Economics World Bank. (2012). GDP Growth (annual %). http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG/countries?order=wbapi_data_value_2012+wbapi_data_value+wbapi_data_value-last&sort=asc Read More