Yes, Things in Sochi Are Bad — But Olympics Are Usually Terrible for Host Cities

When is it ever worth hosting the games?

Snowflakes transform into four Olympic rings with one failing to form during the Opening Ceremony of the Sochi 2014 Winter Olympics at Fisht Olympic Stadium on February 7, 2014 in Sochi, Russia.
National Journal
Elahe Izadi
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Elahe Izadi
Feb. 7, 2014, 8:18 a.m.

The state of af­fairs sure does stink (fig­ur­at­ively and lit­er­ally) in So­chi, eh? Journ­al­ists have been doc­u­ment­ing everything from stray dogs to brown drink­ing wa­ter in the city host­ing the Winter Olympics, even after Rus­sia poured some $51 bil­lion in­to get­ting ready to host the games, mak­ing it the most ex­pens­ive in his­tory. Come on Rus­sia, get it to­geth­er, right?

Well, keep in mind the scourge the Olympics brings upon the host cit­ies them­selves — such that it’s a won­der any place would ac­tu­ally want them.

Many na­tions vie to host the games for the per­ceived eco­nom­ic and geo­pol­it­ic­al be­ne­fits. Noth­ing like the world send­ing you its best ath­letes in tra­di­tion­al garb to make you look like you’re su­per-im­port­ant (way to show com­mit­ment to those shorts, Ber­muda). And then think of all that money com­ing from tour­ists and in­vestors!

But eco­nom­ic stud­ies show a mixed bag. Some places, such as Bar­celona, may have ended up with a long-term be­ne­fit. But look oth­er sites, such as Athens; the Greeks shelled out $15 bil­lion, con­trib­ut­ing to the na­tion’s crip­pling debt, and ended up with bunch of aban­doned sports com­plexes to show for it. The Beijing games cost $40 bil­lion, and tour­ism book­ings ac­tu­ally went down dur­ing the sum­mer of 2008. The air pol­lu­tion levels that Chinese of­fi­cials had com­mit­ted to lower­ing dur­ing the games re­boun­ded when the events ended.

Rus­si­an of­fi­cials in­sist they will be bet­ter off in the long run. But oth­ers in the na­tion ar­gue that the re­sources could have been bet­ter spent. “If all that as­tro­nom­ic­al amount of money — as­tro­nom­ic­al even for Rus­sia — had been in­ves­ted in the im­prove­ment of util­it­ies and ser­vices, it would have giv­en a strong push to eco­nom­ic de­vel­op­ment,” Vadim Bit-Av­ragim, who helps man­age about $4.3 bil­lion at Kapit­al As­set Man­age­ment in Mo­scow, told Bloomberg.

Rus­si­an Pres­id­ent Vladi­mir Putin is bank­ing on So­chi be­com­ing a re­sort and des­tin­a­tion city in the af­ter­math of the Olympics. But rat­ings firm Moody’s pre­dicts that un­cer­tainty about the long-term be­ne­fits for So­chi over­shad­ow any po­ten­tial gains, which, by the way, will have to come from the hotel sec­tor since that’s where most of the private in­vest­ment went.

“It de­pends on the Rus­si­an gov­ern­ment’s ef­forts to at­tract new tour­ists to So­chi, which we es­tim­ate need to in­crease by 2.5 or three times after the Olympics to en­sure that the ma­jor­ity of the ho­tels are full,” a Moody’s ana­lyst told Re­u­ters.

Giv­en that most of the press that So­chi’s ho­tels have re­ceived has fo­cused on doorknobs fall­ing off and blame for Bob Cos­t­as’s eye in­fec­tion, it’s tough to fore­see tour­ists, Rus­si­an and oth­er­wise, flock­ing to their of­fer­ings.

Ask­ing for the world’s spot­light can be a great mar­ket­ing cam­paign. Oth­er host cit­ies were already in­ter­na­tion­al des­tin­a­tions. Not so for So­chi, or for Rus­sia as a whole. Tour­ism ac­counts for only 1.5 per­cent of the na­tion’s eco­nomy, and Rus­si­ans tend to go abroad for va­ca­tion.

But that spot­light can shine bright­est on the ugli­est spots, which is how things are play­ing out in So­chi. And, prob­ably, for most fu­ture Olympic des­tin­a­tions. 

So while we all mock So­chi’s in­ab­il­ity to be an ad­equate host, re­mem­ber that when the journ­al­ists and ath­letes de­part, they’re leav­ing be­hind a city that may very well be worse off for the en­tire ex­per­i­ence.

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