The countdown to what promises to be the summer’s most spectacular event has started. The start of the Paris Olympics is less than two weeks away. The event aims to enhance tourism, rejuvenate the city, attract investment, and boost the struggling French economy.
However, there’s a major issue: it’s not unfolding as anticipated.
The economic justification for hosting the Olympics has always been questionable. Now, Paris is experiencing a financial debacle, with tourists steering clear of the city and travel declining. This could potentially signal the end of the current Olympic model and bolster the case for a permanent host city.
The Olympics have traditionally been marketed as an expensive yet worthwhile investment. The billions spent on building stadiums, facilities, and security were expected to be recouped through a surge in tourists, increased city profiles, and a wave of renewal and investment. However, for Paris, this rationale was always dubious.
Paris, already the world’s most visited city with 44 million tourists annually, didn’t need a profile boost. Nevertheless, President Macron pushed forward with hosting the Olympics, securing €7.5 billion (£6.3 billion) for the event.
While the sports will undoubtedly be thrilling—I have tickets for the athletics—the financial outlook is concerning. Air France recently announced it expects a €180 million loss this quarter due to travelers avoiding the city, anticipating excessive crowds. This is a double setback for the French government, which owns 29% of Air France, whose shares have dropped 40% this year. Other airlines, like Delta, also report losses, with weaker bookings to Paris.
Hotel bookings are similarly disappointing. While peak days around the opening ceremony are fully booked, overall occupancy for the Olympics period is below the 81.4% level seen in July 2023, according to Insee, France’s official statistics agency. Hotel prices are falling as expectations of sky-high rates diminish, leaving many rooms empty.
Sponsorship has also struggled. The organizing committee met its $1.2 billion target, but only with a last-minute €150 million boost from billionaire Bernard Arnault’s LVMH, leading some to dub these the “luxury games.” It’s likely Arnault, closely connected to President Macron, felt compelled to help.
Additionally, the city may not be ready. The Seine remains too polluted for planned events, and French public sector workers are threatening strikes for more pay. Overall, the outlook is bleak.
Official estimates still predict a positive economic impact in the long term, but such forecasts are often overly optimistic. Other cities’ experiences suggest many benefits never materialize, leaving host cities with costly, underused developments. For example, the London Stadium from the 2012 games now serves as West Ham’s ground, but it’s debatable whether taxpayer money was justified.
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The Olympics need a radical rethink. While they are a spectacular celebration of sport and human achievement, hosting them in a different city every four years is increasingly untenable, with rising costs and logistical challenges deterring visitors and sponsors.
A growing campaign advocates for a permanent Olympic home, with Greece as the favored location. Athletes, spectators, and TV crews could gather there every four years, with the site used for training in between. This would be cheaper, easier to organize, and less prone to corruption and excess. Given Paris’s looming financial failure, this idea should be obvious—all that’s needed is agreement on the location.