The anticipation for the Paris Olympics is high, with expectations for a spectacular sporting event that promises to boost tourism, revive the city, attract investment, and kick-start the struggling French economy. However, there’s a significant issue: the economic benefits that were supposed to accompany the games are not materializing.
Historically, the economic case for hosting the Olympics has always been shaky. Paris, despite its allure and global recognition, is turning into a financial debacle. Instead of drawing tourists, the city is witnessing a slump in travel, raising concerns that this might be the event that finally ends the Olympic juggernaut and bolsters the case for a permanent home for the Games.
The Olympics are often sold as a worthwhile investment despite their high costs. Building stadiums, facilities, and providing extra security requires billions, but the supposed payoff is a surge in tourism and global recognition that triggers renewal and investment. For Paris, which already attracts 44 million visitors annually, the need for increased visibility was always questionable.
President Macron, back when he wielded more influence, pushed forward with the plan, securing €7.5bn (£6.3bn) for the games. While the sports events promise to be spectacular—I’ve got tickets for the athletics myself—the financial signs are troubling as the opening ceremony approaches.
Air France recently announced it expects to report a €180m loss this quarter, citing a decline in travelers avoiding Paris due to anticipated overcrowding. This is a double blow for the French government, which owns 29% of the airline, whose shares have dropped 40% this year (in contrast, British Airways owner IAG’s shares are up 12% since January). Delta Airlines also reported a $100m (£77m) loss due to weaker bookings to Paris.
Hotel bookings in Paris are also disappointing. While there are peaks around the opening ceremony, overall occupancy during the Olympics is below the 81.4% level seen in July 2023, according to Insee, France’s official statistics agency. Expectations of sky-high room rates are fading as hotels lower prices to fill empty rooms, resulting in a worse summer than usual for Parisian hotels.
Sponsorship deals have also fallen short. The organizing committee claimed it would meet its $1.2bn target from major corporations, but billionaire Bernard Arnault’s LVMH empire had to step in with €150m of promotion at the last minute, prompting some to call these the first “luxury games.” Arnault, closely connected to Macron, likely felt obliged to help prevent the Games from failing.
Moreover, the city itself might not be ready. The Seine remains too polluted for planned events, and French public sector workers are threatening strikes unless they receive extra compensation. These issues cast a shadow over the upcoming Olympics.
Despite official estimates predicting positive economic impacts from long-term regeneration, past experiences suggest many benefits never materialize, leaving host cities with costly developments. For example, the London Stadium, built for the 2012 Games, now serves West Ham but questions remain about the necessity of using taxpayer money for its construction.
In reality, the Olympics need a radical rethink. The event is a magnificent spectacle of sport and human achievement, one that should inspire global unity. However, the current model of rotating host cities every four years is increasingly untenable due to rising costs and concerns about congestion and security.
There has been a long-standing campaign to establish a permanent home for the Olympics, with Greece being the most logical choice. A fixed location would be far cheaper, easier to organize, and less susceptible to corruption and extravagance. After witnessing the financial flop that Paris is rapidly becoming, this idea should be evident to everyone. The challenge remains in getting all competing countries to agree on a single location.
