A flag from the 1976 Olympics in Montreal flies outside a house in Adams Morgan.
Now that the U.S. Olympic Committee has confirmed its finalists for a potential U.S. bid for the 2024 Summer Games, Washington, D.C. could be on its way to hosting its very first Olympics. D.C. joins Boston, Los Angeles and San Francisco on the USOC’s short list.
And that’s stirring up mixed emotions around town, as some residents praise the possibility as “a great way for people to come and see the nation’s capital,” while others say they “don't believe the financial investment will be worth the return.”
Olympic benefits have offsets
That last point is top on the mind of sports economist Dennis Coates at the University of Maryland, Baltimore County. Professor Coates has researched and analyzed all sorts of athletic mega-events and how they've affected their host countries and cities. And when it comes to a mega-event like the 2024 Summer Olympic Games, he says he'd definitely try and go if they came to the D.C. region; but when it all comes down to it, they’re probably not worth what he calls “the touted benefits: income growth, job creation, tax-revenue increases.”
In fact, he wrote an extensive paper (pdf) analyzing what it cost the United States to host the 1994 World Cup, and discovered that while the event was touted as a great success, we actually took a pretty big hit.
“By and large most of the cities that hosted saw a decline relative to what would have happened had they not hosted the event,” he says.
And the primary reason, he believes, is the crowds.
“People respond to the possibility of crowds, if they're locals, by saying one of two things. One is ‘I'm getting out of Dodge,’ which means there is a lot of flight so normal expenditures don’t occur. The other is ‘I am not leaving my house,’” Coates says.
Coates says he call these two phenomena the “hunker down” and the “skedaddle” effects.
“What we are really thinking about is what will happen if nothing else changes [during these events]. But the problem is that other things do change; there are substitution activities.”
Coates refers to economist Wolfgang Maennig’s analysis of the 2006 World Cup in Germany (pdf).
“What he found was during the World Cup there was a lot of tourism,” Coates explains. “The problem was counteracting reductions in the month before the World Cup and the months after the World Cup. So it was basically what are called ‘time switchers.’ People decided to go during the event as opposed to the month before or the month after; on net there was no change."
“So those are the sorts of things that lead to skepticism about what kind of benefits will accrue because of these events," he says.
The infrastructure argument
Coates acknowledges that many cities and countries use the prospect of hosting a mega-event to beef up infrastructure and devote resources to other improvements, but that it’s “a little bit of a bait-and-switch.”
“If you need the infrastructure, build the infrastructure,” he says. “You don’t need to throw a party for the world to justify spending the money to redo highways, pave some roads, work on the subway system or whatever. It’s well justified if it’s worth doing; it doesn’t need a party to justify it.”
Then, he says, there are all the things countries and cities might invest in that they “don’t need, like a velodrome [for track cycling] or a place to do white-water rafting. There are a lot of white elephants that go with these things as well.”
One of D.C.’s advantages in this sense, he says, is the region has extant sites that could house Olympic events, including the Camden Yards sports complex, the University of Maryland College Park and the Inner Harbor.
“If the decision was being made to say should [the Olympic games] go in Washington D.C., or should it go in Istanbul, since Istanbul has bid for such events before, one argument might be you won’t need all the extra construction in Washington,” Coates explains. “And so on the global scale that’s probably a better decision than a country where you would have to build everything.”
“So if you think that throwing a party is a great thing, then I imagine people in Washington would feel very good about that.”
Music: "Summer" by Markus Ochmann from Latin / Pop Instrumental Beats - Sampler