Hi guys! Because it’s officially Olympics season, I decided to switch gears and dedicate a post to them. Without further ado:
The Olympic Games are a prestigious global event that allows host countries to showcase their culture, infrastructure, and ability to welcome people from all over the world. This year, the Olympics are hosted in Paris, the capital city of France, where around 10,5000 athletes will be competing in over 70 sports from July 26th to August 11th. This represents a major opportunity for France to drive economic growth and transform its urban landscape.
Tourism
Contrary to popular belief, France estimates a decrease in tourism revenue over the period when the Olympics take place, as tourists are scared of skyrocketing prices and big crowds. In fact, the Paris Tourism Office forecasted a 14.8% drop in foreign arrivals in July 2024, compared to July 2023. The same trend can be seen in hospitality, where the average hotel occupancy rate of 81.4% in July 2023 dropped to 59.8% – 77.8% in July 2024. The French national airline is also taking an economic hit, forecasting a loss up to €180,000 million during the current financial quarter. However, tourism experts, such as Christina Choueifaty, senior account manager at STR, a company that provides hotel analytics and benchmarking data, claim that the fall in demand for tourism is a temporary adjustment and that tourists will return to Paris once the Olympics are over. She also explains that from a long-term perspective, the Olympics might solidify the popularity of the city as a significant tourist destination, and could attract even greater demand in the future.
Infrastructure
Being a tourist powerhouse, Paris has almost all the infrastructure needed for the Olympics. The only facilities that required building were the Olympic pool and the Athletes Village – a residential complex created to accommodate Olympic delegates. Compared to other hosting cities, there was no need for the development of new hotels and alternative accommodations for the event.
Job Creation and Small Businesses
According to an official Olympics report, Paris 2024 has pledged to organize an event that creates a long-term and widespread positive impact on job seekers and small businesses in France. As of January 2024, the Olympic Games have created approximately 150,000 jobs worldwide across three major industries: tourism/hospitality, security, and construction. EMPLOIS 2024, supported by the French unemployment agency Pôle Emploi, is a platform created to connect businesses with potential candidates to occupy the job opportunities created by the Olympics. The Greater Paris region also launched an initiative called “1000 Work Experience at the Olympic and Paralympic Games” to enable middle school and high school students to start their careers with the Games.
Regarding small businesses, only 28% of SMEs (small and medium enterprises) can bid on public tenders (contract opportunities published by a public sector organization to invite competing offers from suppliers who can provide the required goods, services, products, etc.). The value of these contracts is nearly €5 billion, presenting an opportunity for economic growth and development, especially for small businesses. To ensure that businesses of all sizes can benefit from the contracts, Paris2024 has created a range of tools developed specifically for SMEs. As a result of their efforts, about two-thirds of contracts have been entrusted to SMEs – a great victory for entrepreneurial development in France.
Investment Opportunities
Hosting the Olympic Games creates opportunities for public and private investment. For example, although most of the €6.8 billion in funding for the Olympics comes from tickets, media, and sponsors, there have been various private investments, such as a €1.5 billion contribution from the International Olympic Committee. Furthermore, €2.9 billion in public funding is being allocated toward projects that address the long-term needs of local communities. Notably, 80% of this sum is going to Saint-Denis, one of the poorest suburbs of Paris. Saint-Denis also holds the Olympic Village which will be turned into 2,800 housing units and two new schools after the summer games end.
So… is France benefiting economically from hosting the Olympics?
Despite the potential benefits, hosting the Olympics comes with significant financial risks. The cost of preparing for the games, estimated to be around €6.8 billion, including expenses for construction, security, and event management, can place a heavy burden on public finances, especially if revenues from the games do not meet expectations.
Despite all of this, according to a study from the Centre for Law and Economy of Sport, the 2024 Summer Olympics are expected to be a net positive for Paris, generating a projected €8.9 billion in economic impact for the city.
Works Cited:
BONAVENTURE, LIONEL. “Air France To Take A $193 Million Hit As Tourists Avoid Paris Olympics.” Forbes, 2 July 2024, https://www.forbes.com/sites/suzannerowankelleher/2024/07/02/air-france-193-million-loss-paris-olympics/. Accessed 17 November 2024.
“Business Opportunities | Paris 2024.” Olympics, 2024, https://olympics.com/en/paris-2024/our-commitments/creating-jobs-and-economic-opportunities/business-opportunities. Accessed 17 November 2024.“Paris: 95% of Infrastructure Ready for Olympic Games Enthusiasts.” InsideTheGames, 15 November 2023, https://www.insidethegames.biz/articles/1142497/paris2024-95-of-infrastructure-ready. Accessed 17 November 2024.
“Paris: 95% of Infrastructure Ready for Olympic Games Enthusiasts.” InsideTheGames, 15 November 2023, https://www.insidethegames.biz/articles/1142497/paris2024-95-of-infrastructure-ready. Accessed 17 November 2024.