Gulf countries vie to add Olympics to the trophy cabinet

Qatar and Saudi Arabia are keen to bid despite sky high costs

July 22, 2024, 12:07 PM

Paris 2024 Olympics - Paris 2024 Olympics Preview - Paris, France - July 18, 2024 People pose for a picture in front of the Eiffel tower ahead of Paris 2024 REUTERS/Marko Djurica — It is estimated this summer's Olympics will cost about $8 billion but the IOC says Paris will receive long-term economic benefits of $12.2 billion as hosts

That this year’s instalment of the Olympics in Paris will reportedly be the cheapest Summer Games in decades – at a cost of about $8 billion – might tell you all you need to know about why countries are reluctant to enter the race to host these major events.

To put it into context, $8 billion is slightly less than the annual GDP of Togo. The $20 billion spent by Rio de Janeiro in 2016 would cover Armenia’s GDP for a year. And the $55 billion to cover the Sochi Winter Games in 2014 – the most expensive ever – is more than the GDP of Jordan.

And yet the gold medal of hosting the Olympics in 2036 is coveted by GCC countries Qatar and, if commentators are to be believed, Saudi Arabia.

Newsletter
Get the Best of AGBI delivered straight to your inbox every week

The former has already ticked off the Fifa World Cup on its global mega-events bucket list, while the latter awaits the imminent announcement that it will host the football tournament in 2034.

Saudi Arabia was the only contender in the field but that will matter little as the kingdom reveals a plethora of stadia fit for the occasion.

In 2021 Australian city Brisbane became the first city to win an Olympic bid unopposed (for the 2032 Games) since Los Angeles won in 1984.

The benefits are more reputational and geopolitical than economic, unless the event’s hosting is used to drive nation building

The International Olympic Committee (IOC), a not-for-profit non-governmental body that has its $200 million headquarters in Lausanne, Switzerland, made $7.6 billion from the latest four-year cycle of Winter and Summer Games, culminating with the Tokyo Olympics held in 2021.

Contrast that to the $150 million spent by Tokyo on its failed bid to host the 2016 Games.

Note that the IOC says it returns 90 percent of its income back into sports, a small portion going to the athletes themselves.

“The benefits are more reputational and geopolitical than economic, unless the event’s hosting is used to drive nation building and infrastructural development,” says Simon Chadwick, an AGBI columnist and professor of sport and geopolitical economy at Skema Business School in Paris.

In terms of infrastructure, Qatar is pretty much there and an event like the Olympics would offer the chance to use all the shiny new venues that have been largely underused since the World Cup rolled out of town almost two years ago.

Therein lies another issue. For every Barcelona (1992) or London (2012), where Olympics venues served as a catalyst for urban regeneration, or Tokyo 2020’s Olympic Village, which has been transformed into Japan’s first hydrogen-powered town, there is an Athens (2004) where purpose-built venues were abandoned and left to rot.

Dr Sean Lochrie, associate professor at Heriot-Watt University Dubai, argues that a host city stands to benefit from increased tourism, job creation and opportunities for local businesses.

The IOC predicts that Paris will receive long-term economic benefits of $12.2 billion as hosts of this year’s edition.

Reaping rewards

The Qatar World Cup resulted in estimated tourism spending by visitors and tournament-related broadcasting revenue of between $2.3 billion and $4.1 billion. While that was dwarfed by the reported infrastructure spend, it demonstrated the country’s capabilities on a worldwide scale, which has since been rewarded.

The Gulf state hosted the Asian Cup earlier this year and the 2024 World Aquatics Championships, and has been chosen as host of the 2027 Fiba Basketball World Cup and the 2030 Asian Games.

“For Saudi Arabia, one can see the Olympics as being something akin to Qatar’s staging of the 2022 World Cup – it’d be more about developing capacity, competence and reputation,” says Chadwick.

Saudi Crown Prince Mohammed bin Salman has proven his ambitions when it comes to diversifying the kingdom’s economy away from oil. Staging the Olympics, however, is an expensive hurdle only he can decide is worth jumping.

Gavin Gibbon is a senior editor at AGBI