Paris Olympics May Bring $12 Billion Boost, Study Shows

(Bloomberg) -- The Paris 2024 Olympics could generate a long-term economic boost of as much as €11.1 billion ($12 billion), according to a study commissioned by the organizers of the Games as they seek to embrace the Olympic movement’s new mantra of fiscal restraint.

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Broken down, that would mean the economic activity created from organizing the event would be about €4.58 billion, the construction impact would be around €3 billion, and the tourism contribution would top out at €3.56 billion in the most optimistic of scenarios.

The study, released on Tuesday by the Paris-based Centre for Law and Economics of Sport, says the 17-year timeline for their estimates spans the planning phase through to the “legacy” period ending in 2034.

The think tank’s report also produced estimates for a “low overall impact” of €6.7 billion and a medium scenario of €8.99 billion. It said the figures don’t represent a full cost-benefit analysis, which “would be necessary in order to be able to conclude the legitimacy of hosting the Games.”

Paris is an important litmus test for the International Olympic Committee and its efforts to introduce a more streamlined, less competitive bidding process for the Games that will still leave a positive impact for its hosts. After decades of criticism over how cities like Athens and Rio de Janeiro ran over budget and saddled their governments with debt, the IOC has sought to pick host cities based on dialog not rivalry to yield Olympics that are both cheaper and more sustainable.

The head of Paris 2024, Etienne Thobois, signaled that ethos of fiscal prudence in comments to journalists on Monday, saying he’s confident at this stage that the Games will be delivered on budget at €4.4 billion.

“The target was always to be balanced and we would spend only what we can make,” said Thobois, who was in charge of the 2007 Rugby World Cup. “The target was not to make money.”

The budget for infrastructure spending is similar at about €4.5 billion but comes from a mix of public and private money, and is designed not to produce any projects that will languish unused after the Games.

“The tangible legacy is being done very carefully so as we don’t have any infrastructure we don’t need,” Thobois said.

‘Crowding Out’

Paris can expect to host somewhere between 1.34 million and 1.85 million spectators during the Games, taking the study’s low and high estimates, split roughly evenly between French and foreign visitors.

That would generate a direct tourism impact of as much as €1.52 billion during the event, the authors said, excluding the phenomenon of “crowding out” travelers who might otherwise have come.

Bloomberg News reported last month that demand for luxury apartment rentals during the fortnight of the Games is more tepid than many anticipated.

(Updates with comments from organizing committee head starting in sixth paragraph.)

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