But how correct were those predictions?
As billions watched the opening and more recently, the closing ceremony, I assess the impact that it has had on the economy (so far), both the positive and the negative.
According to The Telegraph, it’s estimated that £9.3 billion was spent on the construction and hosting of the Olympic Games, with a total regeneration of East London. £300 million was spent on ticket sales and overseas travellers were expected to spend over £700 million. In addition to this, 30,000 jobs were created with a forecast of 50,000 over the coming years.
I’m sure we’d all agree this sounds pretty positive.
However, the influx of visitors to an already congested London has brought about its fair share of problems for the city, particularly for commuters on transport links, disrupting local businesses and affecting tourism.
Case studies from other countries that have previously hosted the Olympics show that it can go either way; Athens suffered a major net loss when they hosted the Olympics in 2004 with some critics indicating this was the catalyst for their economic downturn. On the other hand, Sydney profited on an enormous scale after the games in 2000.
Professor Stefan Szymanski, an expert in the economics of sport at the University of Michigan, said:
In terms of an identifiable macroeconomic impact, I think it’s hard to think of any good examples where it’s shown up in the GDP figures. As economic events, they’re not a big deal. Economics is about more mundane things like producing steel and cars and working in offices – we have Olympics to take our minds off the dull things that make the money.
Conversely, London mayor Boris Johnson argues that the UK will reap the economic benefits for years to come. He said
If you were to say to me that we have just held the greatest games ever in Britain, I would say you are on the right track.
It would seem that the £9.3 billion was money well spent as 300,000 foreigners visited the city of London, not to mention 600,000 holiday makers- the increase in restaurant revenues was up by over 20 percent and theatre tickets doubled.
The government estimates that the UK will now benefit from over £13 billion over the forthcoming years.
Whilst it has not yet been disclosed whether the Olympics has been profitable, there is no denying the positive impact it has had not only for the economy, but for the UK’s image as well.
Only time will tell whether it was all worth it, what are your thoughts?