How Hosting a Major Sports Event Affects the Economy of the Host Country

(540 Words)
A major sports event such as the Olympics or World Cup can have a major effect on the economy of the host country. There are both positive and negative economic impacts to such an event, and it is important for each country to weigh the various consequences of hosting such an event.
When a country hosts a major sporting event, people generally come into the country. This can boost the economy from various fronts. First, the hotels in the area fill up, providing a major boost to their business. For a huge event such as the Olympics, this can have far reaching consequences. Hotels that are even a distance from the actual site of the event may see a major increase. This can start before the event as people prepare for it and last beyond it.
While these visitors are in the countries watching the sporting event, they spend money. They go to restaurants and bars and spend on that. Of course they buy souvenirs. The people may spend money on rental cars and pay to see other attractions. Those who are wealthy enough to travel to another country just to see a sporting event are typically financially secure, thus they may freely spend money. All of the local businesses will make more money from the added influx. This can be a great deal and can allow them to make improvements and expand for the future.
Of course it is not all good with a major sporting event. Problems can occur when the country does too much to prepare for the event. They may spend too much money and even displace people from their homes to make room for the new buildings needed for the sporting event. For instance, a country will often build huge stadiums and arenas in the hopes of getting the Olympics. In some cases, this outflow of money is great and can have a negative impact on the economy. Usually it is outweighed by the positive impact, however.
Of course the government will also get a boost from all of the money being spent. Most governments impose different taxes, thus they stand to get an influx of cash as well. They can turn around and use this to help the country.
The positive impact of the major sports event on the economy can last far beyond the actual event. For instance, the prestige from hosting the Olympics can last as the years go on, attracting paying visitors. It is also a great way for the country to show off its amenities to potential future tourists. People of other countries who may have never thought of that country as a destination spot will see the beautiful country on television and may choose to visit in the future. They may even be more likely to purchase products from that country overseas if the country is just on their mind.
According to the BBC, generally most major sporting events provide an overall economic benefit to a country. This is part of the reason why there is such fierce competition for these events. Countries should weigh the cost of hosting such an event with the great economic benefits it can bring when looking to be a host country.
Resources:
http://news.bbc.co.uk/2/hi/business/8516889.stm