ECONOMIC

Economic Impacts of Events

Economic impacts of Events

As "global properties" (O'Reilly, Lyberger, McCarthy, and Séguin, 2008, p. 392), events may have a tremendous impact, which, in general, can be found in economic, tourism, physical, social, cultural, psychological, and political aspects of a hosting region (Parent, 2008; Ritchie, 1984; Ritchie & Aitken, 1985). Although some may still argue about what can be properly categorized as events, the fact is that countries more often than not are looking out for hosting events, as they feel that these events have a significant economic impacts. Events are typically thought of as drivers of economic activities and source for job-creation, by the increased demand for services and goods, which the events bring along. The national governments, sometimes, go out of the way in offering funding incentives for attraction of events, and also they allocate huge expenses for upgrading of facilities that those events require or utilize. On a global front, government supported and funded events organizations enter in to massive and costly bidding wars to secure the hosting rights for events. Apart from these events, there are also many events which impact the economy adversely. The paper discusses both types of events.

Although some may still argue about what can be properly categorized as mega events, the summer and winter Olympic Games without a doubt can be classified as mega events (Fairley, Kellett, & Green, 2007; Toohey & Taylor, 2008). Due to the increasing influence of the Olympic Games and the attention they receive worldwide, a number of countries derive pride and prestige from hosting this event and regard it as a showcase to the world or an opportunity to achieve certain objectives. Regardless of a country's specific objectives, the competition to win the bid for hosting the Olympic Games has become more intense, especially since the commercial success of the 1984 Los Angeles Olympic Games. Not only the competition, but also the scale, complexity, and cost to host the Olympic Games have grown, thus creating some concerns for taxpayers as well as for bidders, who should carefully consider the rewards and risks in pursuing this Olympic dream. Take the 1992 Barcelona Olympic Games, for example; it cost the host city and country over US $10 million to bid and US $ 10.7 billion to host (Burton, 2003), and such costs exceed the annual gross domestic product (GDP) of some nations (e.g.. the Bahamas).

Is it worth staging a mega event, such as the Olympic Games? This is an important question, which was also addressed by Salt Lake Olympic Chief, Mitt Romney, who considered it a fair question (Foy, 2002). Because a wide range of effects can be anticipated as a result of hosting mega events, this question should be asked in terms of the objectives that each host country expects to achieve. These objectives may vary from nation to nation, but the overall objective can involve a strategic and economic focus. "For example, the Athens 2004, Turin 2006, Beijing 2008, and Vancouver-Whistler 2010 Olympic Games bid ...