This review considers the evidence for legacy from major sporting events. It looks across the four themes of the Commonwealth Games Evaluation Project (flourishing, sustainable, active and connected).

4. Flourishing

4.1 This chapter looks at the economic effects from major sporting events, with particular emphasis on business, the labour market and tourism. It considers how these events can affect the economy in the period of the event and considers whether there are long-term changes to the economy as a result of major events.

Increase Growth of Businesses

Short-term effects

4.2 A wide range of studies have found evidence of a boost to the economy of the host of major events in the immediate period of the event. In reviewing the evidence available, McCartney et al. (2010) find that most studies showed evidence of increased economic growth, but these were using mostly estimated data, and had a short-term, post-event collection period.

4.3 The evidence also suggests that there is a clear pattern in terms of which sectors of the economy see growth in activity and at what time. While analysing the effects of the Sydney Olympics, Giesecke and Madden (2007) find that the most significant effect was in the construction industry in the lead up to the event. A range of other studies also find that there is a strong boost associated with the construction of the venues but that falls away sharply in the year of the event (Spilling, 1996; CREA, 1999). This is true across the wide range of major sporting events, including the Commonwealth Games (KPMG, 2006). The same studies find that the other sectors which are most heavily affected are hospitality and tourism. These are most strongly affected in the year of the event with the effects driven by high numbers of visitors to the event itself.

4.4 These increases in economic activity in the short-term can provide significant opportunities for a wide range of businesses, including SMEs (Small and Medium sized Enterprises). The evidence from London 2012 shows that the portal through which businesses competed for Olympic related contracts, CompeteFor, provided over 12,000 business opportunities, with a significant proportion of these being won by SMEs (Michael, 2013). There is also evidence of an initial boost of around £2.5 billion to foreign direct investment as a result of the Games (Michael, 2013).

4.5 Nonetheless, the short-term effects in London itself were not wholly positive. One study on the London Olympics found that some businesses suffered significantly from local travel disruption and saw a 34% decrease in sales (London Chambers of Commerce, 2012). This meant that while some businesses did realise the boost from the Games which had been expected, many businesses suffered significantly from displacement of their usual customer base during the period of the event (Vlachos, 2013).

4.6 These problems are to some extent unavoidable, but the literature suggests that consultation and clear advance planning and communication of disruptions can help to allow businesses to plan more effectively for these issues. Nevertheless as noted in the Areas for Future Research section below, this remains a significantly under-researched area.

Long-term effects

4.7 Despite the relatively strong overall evidence of a short-term boost to businesses, the evidence for a long-term increase in activity is limited in quality and quantity.

4.8 Some of the most encouraging evidence around the potential for long-term economic benefits comes from the Barcelona 1992 Olympic Games. Brunet (2005:5) argues that Barcelona has been 'highly successful in harnessing the legacy of the Games'. He finds that the Games succeeded in maintaining growth on a scale never seen before and provided a 'soft mattress, breaking the fall in a time of general depression' in Spain (Brunet, 2005 pp9). However, as with other major events, it is very difficult to separate out these effects from the wider regeneration of Barcelona.

4.9 Another study of major events argued that a fundamental concept of the Games is their 'temporariness', and that there are limited long-term effects from major sporting (Spilling, 1996). Looking at the 1994 Lillehammer Winter Olympics, as well as reviewing the existing evidence, Spilling found that with the possible exception of tourism, most economic impacts were temporary. He found that long-term activity generated by the Games tended to be more important for the local area, rather than the national economy' (Spilling, 1996).

4.10 Looking at the effects as a whole, some authors conclude that there has been a tendency to over-estimate the benefits of major events. In reviews of research done to that date, both Kasimati (2003) and McCartney et al. (2010) find that studies were over-reliant on estimated data and failed to take into account some of the negative factors associated with the Games. Nonetheless in their review of the evidence, Andersson et al. (2008) have suggested that although the initial investment can lead to inefficiency in the short-term, it can be a good investment in the long-term if it leads to the development of specific sectors of the economy.

4.11 These findings are supported by the forecasts made about the long-term effects of the London Olympics. The most comprehensive economic analysis was published by the Department of Culture, Media and Sport (DCMS) as part of their meta-evaluation. Their economic modelling work forecasts that Games related activity will generate between £28 billion to £41 billion in Gross Value Added (GVA) to the economy between 2004 and 2020. This activity is estimated to strongly peak in 2012 before falling away sharply over the years to 2015.

4.12 In addition, two other impact assessments by Oxford Economics (2012) and the Lloyds Banking Group (2012) present similar analyses. They predict a significant long-term impact of the Games, but with the vast majority of effects centred on 2012 and the years immediately surrounding it. Inevitably however, these studies can only estimate the long-term effects of the Games. Only by continuing to analyse the effects of the Olympics over the next decade will the long-term impacts on the London and the rest of the UK economy be fully understood.

4.13 There have also been concerns raised that the effects of the London Olympics are limited in geographical scope. After taking wide-ranging evidence. The Select Committee on Olympic and Paralympic Legacy (2013) found that the benefits of the Games were 'disproportionately weighted towards Southern England'. They recommend that it is essential to assess why the size of this disparity is so large, and find that there has been a lack of investment resulting from the Games in the wider UK economy.

Reasons for increase in business

4.14 Over the longer-term, the economic literature finds that there are three broad ways to increase economic activity as a result of hosting major sporting events. These are to increase economic participation, productivity, or the perception of the host, either for business or tourism. The labour market section of this review will consider the limited evidence for an increase in labour market participation. After that the tourism section will consider the evidence for a long-term increase in visitors and visitor spending. This section assesses the potential increases to business productivity or the perception of the host as a place to do business.

4.15 In terms of reputation, hosting major sporting events can result in significant international exposure for the business profile of a city. PWC (2001) found that the Sydney 2000 Olympic Games resulted in extra business exposure for the city. This helped boost the city's brand and delivered one of the strongest impacts of the Games, the reputational enhancement of the businesses involved in the delivery of the Games (OECD, 2010). In turn this helped lead to increases in Foreign Direct Investment which can boost business capacity and productivity within the economy. There is also evidence from Barcelona that the city increased its position substantially in international rankings as a place to do business over the decade surrounding their hosting of the Olympics (Brunet, 2005).

4.16 The early evidence emerging from the London Olympics also suggests a positive message. One survey conducted shortly after the Games found that 92% of businesses perceived that the Games would help promote London internationally (KPMG, 2012). Nevertheless, it will be important to track whether this translates into long-term results before firm conclusions can be drawn.

4.17 In terms of boosting productivity, there is also some evidence that the increased infrastructure resulting from the Games can help to improve opportunities for businesses and increase their ability to operate on a wider scale more quickly. However, the evidence also suggests that although some infrastructure projects can become under-utilised and can be of little use to the wider population after the event, transport improvements in particular can help businesses to develop (Smith, 2012).

4.18 The evidence from the Barcelona Olympics suggests that infrastructural improvements can be one of the longest lasting impacts of major sporting events. Brunet (2005) finds that by focusing a large proportion of investment on infrastructure, Barcelona was able to develop the basis for lasting improvements to the city. More information on this can be found in the 'sustainable' section of this review.

4.19 In addition to infrastructural improvements, there is some evidence that the way in which organisations work together can be strengthened as a result of hosting major sporting events (Smith, 2012). The event often involves collaborations between the public and private sectors, as well as opportunities for organisations to expand their networks. This can mean that organisations in both the public and private sectors have better communication links and working relationships with a wider range of partners, and in turn can help to secure new activities for local businesses.

4.20 This was the case for regional partnerships in the North-West of England following the Manchester 2002 Commonwealth Games (Smith and Fox, 2007). More recently, the early evidence from London suggests an 'unprecedented' level of partnerships (Centre for Sport Physical Education and Activity Research, 2013:32). It is argued that hosting London 2012 resulted in more joined-up working and better communication links between partners and between the private and public sectors.

4.21 However, the impact is not always positive. In the Sydney 2000 Olympics, strained relations between the public and private sectors affected the ability to find a use for venues after the Games (Searle, 2002). From studying partnership-building around pre-Games training initiatives in three cities close geographically to the Games in Sydney, O'Brien and Gardiner (2006) conclude that partnerships need to be carefully planned for. The city of the three (Hunter Valley) that used networking as a strategic activity and organised a range formal and informal networking events was able to most successfully build and extend partnerships and thereby benefit local business community. Those cities that did not consider this a strategic activity did not see these benefits.

Factors which make a positive long-term effect more likely

4.22 When embedded into existing projects, major sporting events appear to act as a coalescing force for a number of aims (Smith, 2012). In previous events, particularly in the Manchester 2002 Commonwealth Games and the London 2012 Olympics, evidence suggests that the events helped catalyse and accelerate a number of existing schemes to regenerate more deprived areas of the cities. The evidence suggests this is most likely to happen where the host has a very clear strategy which builds on the existing strengths of a city (Smith, 2012).

4.23 There is also limited evidence to suggest that a certain type of city or region benefits most from hosting major sporting events. In particular, they are often post-industrial cities which have the basis for significant growth, but where the economy has struggled to recover from the loss of major industries. Important examples of this in the literature include Manchester 2002 and the Turin 2006 Winter Olympics (OECD, 2010).

Increase Movement into Employment and Training

4.24 In line with the wider economic effects, the evidence suggests that there is a pattern in terms of the general effects on the labour market. The most consistent finding is that employment increases in the construction sector in the run up to the event Smith (2012). This is also found in the literature reviews conducted by Kasimati (2003) and Gratton et al. (2005) and in a number of individual studies on a variety of major events.

4.25 Inevitably, the employment boosts are highly linked to activity in the wider economy. Therefore this construction boost will generally fall away in the year of the event but other sectors of the economy consistently receive a boost at the time of the Games, most notably tourism and hospitality (Spilling, 1996). Similarly in their meta-evaluation, DCMS find that the construction and events sectors have been the most affected by the London 2012 Olympics so far (2013). As noted in the business section, these sectors see a significant increase in activity and this leads to increased employment opportunities over the short-term.

4.26 In terms of the proportions of these effects, Oxford Economics study of the London 2012 Olympics projects that 78% of the job hours created would be in the construction sector, 15% in tourism and the remaining 7% were elsewhere (2012). Other studies including those by the Centre for Regional Economic Analysis (1999) and Giesecke and Madden (2007) show similar effects. The method of analysis used to estimate short-term effects on employment has been criticised however, for providing over-estimates of the impacts of major events and for relying on estimated data in doing so (Kasitmati, 2003).

Long-term effects

4.27 Overall, the evidence for a long term boost to employment is weaker. Many studies suggest that there is little or no employment boost after the event. Nonetheless, there is some limited evidence for a boost from the most successful events.

4.28 A study into the Manchester 2002 Commonwealth Games found that 6,300 full-time equivalent jobs would be created over the ten years surrounding the Games, while KPMG (2006) estimated that 13,600 full-time equivalent jobs would be created over the 20 year period surrounding the Melbourne 2006 Commonwealth Games. In addition, DCMS (2013) and Oxford Economics (2012) predict a strong increase in employment as a result of the 2012 London Olympics. This is supported by evidence from major sporting events in Barcelona, Turin and Manchester, where there was a boost to employment associated with increased skills which allowed previously unemployed former industrial workers to gain the skills needed for the knowledge economy (Murtagh, 2007: OECD, 2010).

4.29 Nonetheless, these studies exhibit the two distinct problems which make it hard to fully understand the long term effect of hosting major sporting events. In the case of Melbourne and London, the studies are reliant on modelling estimates of the long term effects. On the other hand, the studies on Barcelona, Turin and Manchester use available real data, but inevitably cannot separate out the effects of the event from the wider factors affecting the labour market over a long period.

4.30 Moreover, Brunet (2009) finds that even in Barcelona, where the event was deemed to be a wide-ranging success, employment began to decline again after the event. This was in part caused by the recession which was impacting on Barcelona at the time, but nonetheless undermines the argument made by some that the Games provide a 'soft mattress' in times of recession.

4.31 Early evidence from London suggests that the Games have helped the host boroughs in achieving convergence on a number of criteria. Convergence refers to the process of closing the gap in performance and prospects between the wealthiest and poorest communities in across London. Raising these outcome levels is likely to affect long term employability in these areas (Geoghegan, 2013). This is however, part of a long-term regeneration strategy in East London, rather than being simply an effect of the Games themselves.

Who benefits?

4.32 On the whole, any employment increases are specific to the geographical area of the event and may not have a significant impact at the national level (Spilling, 1996). As Giesecke and Madden (2007) note, it is very difficult to assess the effect on the wider economy. Nonetheless they argue that it is far better to assume no impact on the national economy, where none can be clearly observed.

4.33 Minnaert (2012) makes the argument that employment opportunities are not evenly distributed, and that it may be challenging to target those who would benefit most. Increasingly major events have included programmes which target socially disadvantaged groups. However, even where there is an explicit aim, as in the Sydney 2000 Olympics, it appears difficult for employment programmes to reach those who would benefit most (Minnaert, 2012).

4.34 The opportunities tend to go to those who already have skills, rather than the long-term unemployed, or those who need most help getting back into the job market (Minnaert, 2012). This is particularly problematic if organisers adopt an overly cautious approach, and only hire those are strongly qualified for the event. Therefore Minnaert (2012) concludes that general programmes are not sufficient, instead programmes must be carefully targeted at specific groups.

4.35 In addition, as with the wider economy, there are likely to be leakages from the spending as a result of multi-national companies being employed to manage the largest projects (Smith, 2012). This means that local people may miss out on employment opportunities, as overseas applicants with specific skill sets may gain the available jobs.

4.36 Overall, studies, and in particular economic modelling, have tended to focus on aggregate effects and are therefore unable to capture the distribution of job opportunities. Examples of this include the economic analysis produced on the Sydney 2000 Olympics by the Centre for Regional Economic Analysis (1999) and Giesecke and Madden (2007), which provide gross estimates of employment levels.

4.37 More recently, in line with shifting policy focus, government led work on the London 2012 Olympics included a focus on unemployed people living close to the event venue. The London 2012 Meta-Evaluation provides evidence of over 30,000 jobs being directly created in the run up to, and during the Olympic events (DCMS, 2012). In addition, an Olympics Jobs Evaluation by the Greater London Authority finds that an average estimate of 68,900 workless Londoners were helped into employment either directly or indirectly through the Games (SQW, 2013). It remains unclear however, how many of these people were long-term unemployed. It also remains unclear how many of these jobs are long term, and once again, it is difficult to fully separate out an Olympic effect from wider regeneration in East London.

Are there any factors which make a long-term effect more likely?

4.38 Overall the evidence remains inconclusive on how wider economic effects from major sporting events translate into labour market effects. However, post-industrial areas appear to experience the strongest effects. An OECD (2010) study into the staging of global events finds that there were marked improvements to the employment rates in Turin and Barcelona in conjunction with hosting the Olympics Games. In addition Murtagh (2007) finds evidence that unemployment fell from 14.2% to 5.7% in New East Manchester over the period of the 2002 Commonwealth Games.

4.39 As with all work on major sporting events, it is hard to separate out this impact from other factors affecting the economy. However, the evidence suggests a correlation between cities which have suffered from post-industrial decline and a clear reduction in unemployment. This may in part be due to help given to enable workers to gain skills which make them more competitive in a modern 'knowledge economy'.


4.40 Looking at evidence from the Manchester 2002 Commonwealth Games, Ralston et al. (2005) find that major events can act as a catalyst to recruit and develop community orientated volunteering and to build skills in the volunteering sector. They found that around 42% of volunteers surveyed felt more inclined to volunteer again because of their experience.

4.41 Similar evidence on an increased desire to volunteer is emerging at an early stage from London. Dickson and Benson (2013) and DCMS (2013) find that 45% of volunteers who responded to the survey indicated that they would increase their volunteering in future as a result. Similarly, McInnes (2012) found that 40% of Olympic volunteers were inspired to volunteer for the first time because of London 2012.

4.42 Despite the evidence of increased interest in volunteering because of these events however, it should be noted that most of these studies were conducted immediately after the event. There is no clear evidence of how this enthusiasm translates into long-term behavioural change. This is important, since it is essential for event volunteers to become regular volunteers if long-term community benefits are to be achieved (Smith, 2012).

4.43 Over the longer term, McCartney et al. (2010) found a mixed picture on volunteering from the Manchester 2002 Commonwealth Games. They found no lasting desire to volunteer again but did find that volunteers perceived their involvement to have increased their skills.

4.44 There is also a mixed picture beginning to emerge on skills from volunteers at the London 2012 Olympics (Schneider et al., 2013). Overall, as with the wider picture on skills and training benefits from major events, there is a lack of long-term evidence on how event time volunteers benefit in terms of skills, and how this affects their employability in the wider economy.

4.45 Moreover, Minnaert (2012) finds that even where the Games do have success, it is hard to get socially excluded groups to become involved and stay involved in the process. She finds that people already in employment are far more likely to fit the model of what Games organisers are looking for in volunteers. Therefore those from disadvantaged backgrounds require more training in order to become involved in the process.

4.46 In line with this, Smith (2012) notes that it is important that volunteering projects are designed with extra training, associated qualifications and disadvantaged groups in mind. By doing so, these projects can contribute to long-term social regeneration goals, rather than simply providing cost-effective labour for the duration of the event.

4.47 Eiser (2011) presents a similar argument, and finds that the Manchester Pre-Volunteering Programme was an example of the sort of programme which can help to get disadvantaged people volunteering. The programme was successful in providing extra training to those who had fewer skills, and in setting a minimum quota to ensure that a least 10% of the participants came from disadvantaged backgrounds. This led to 862 people from disadvantaged backgrounds coming through the Pre-Volunteer Programme being employed or become an accredited volunteer at the Manchester 2002 Commonwealth Games (Cambridge Policy Consultants 2002).

Long term boosts as a direct consequence of labour market activity?

4.48 Overall, the evidence for a long-term boost to productivity in the labour market is limited. Volunteering and employability programmes can help to increase skills and experience, but there is little evidence that this will have a long-term impact on employability. The evidence suggests that it is extremely difficult to target those most in need and as a result, those out of the labour market are unlikely to achieve the new skills required. On the whole there remains a lack of clear evidence of a direct impact on employability or labour market participation as a result of major events.

Tourism Section

Short-term effects

4.49 Fourie and Santana-Gallego (2011) find consistent evidence of a short term increase in tourists as a result of major sporting events. They use econometric modelling to assess the impact of major sporting events across a wide range of sporting events, including both the Summer and Winter Olympics, and the World Cup (169 events in total). They find that on average tourist visits increase by roughly 8% in the year of the event but that the effect varies widely according to the type of event taking place.

4.50 This is echoed by Gratton et al (2005), who find that overseas tourism increased by 7.4% in Greater Manchester in the year of the Commonwealth Games (2002) compared to 2000. Kang and Perdue (1994) also found that amongst an overall positive outlook for tourism as a result of the 1988 Seoul Olympics, the most positive effects were in the year of the event before declining over time.

4.51 The boost in tourism in the period of the event occurs not just because of increased visitor numbers, but also because of increased spending per person during the period (Chalip, 2004). This is important because visitor numbers do not always rise in the period of the event due to displacement. In London, the actual number of visits fell in quarter 3 by 4.2% compared to the same period in 2011.

4.52 In their meta-evaluation, DCMS (2013) find that this suggests substantial displacement of regular tourists who were deterred by overcrowding, disruption and price rises. Crucially however, DCMS found that the average spend of Games visitors was around double that of an average tourist. This meant that tourist spending actually rose by £235 million (excluding ticket sales) in the 3rd quarter of 2012.

4.53 Moreover, looking at the year as a whole, Visit Britain (2013) found that there was a 1% increase in visitor numbers to the UK in 2012 compared to the previous year, and a 4% increase in visitor spending over the same period.

4.54 Despite consistent predictions and findings of increased tourism numbers however, the European Tour Operators Association (2010) find that cities consistently over-estimate the effect. This is in large part due to the displacement of tourists who are put off visiting the city during the period of the event because of perceptions of over-crowding or increased prices. They find this led to lower hotel occupancy rates than expected in three of the most recent Summer Olympic host cities. In addition, there is evidence from China over the year of the Beijing 2008 Olympics, that contrary to predictions, tourism numbers and expenditure actually decreased in the year of the event (Li et al, 2011).

4.55 Problems with displacement are not uniform however. Instead the scale of displacement is highly dependent on the nature and size of the city, and the time of year in which the event is being held. Unlike the evidence of substantial displacement in London, KPMG (2006) found that the displacement effect in Melbourne was relatively low because the event was held in winter, meaning that there were fewer tourists visiting the city anyway. In addition, hotel occupancy in the month of the 2002 Commonwealth Games in Manchester was the highest it had ever been (Cambridge Policy Consultants 2002).

4.56 There is also evidence that tourism campaigns related to major sporting events can have significant effects. The most high profile of these was the GREAT campaign which highlighted positive aspects of Great Britain to a worldwide audience in an attempt to boost the increased profile of the UK in the run up to the Olympics. UKTI (2013) analysis suggests that this campaign will deliver around £600 million in extra revenue for the UK.

Long-term effects

4.57 The evidence for a long-term tourism boost is not consistent (Kasimati, 2003). Some studies have found no discernible boost to employment in the years following the event (Spilling, 1996; Giesecke and Madden, 2007). On the other hand, many studies predict a tourism boost, and others have concluded that there was a strong tourism boost after the event (Brunet, 1996).

4.58 There have been forecasts made of tourism impacts from recent major multi-sports events in the UK. In both the Manchester 2002 Commonwealth Games and the London 2012 Olympics, the impact is estimated to be positive in the years surrounding the event. Cambridge Policy Consultants (2002) forecasted that the 2002 Commonwealth Games would attract 300,000 additional visitors to Manchester per annum, generating additional spending of £18 million.

4.59 In the case of London, inevitably at this stage there is very limited evidence on the long-term tourism impacts. Oxford Economics (2012) assessment of the economic impact of the Games, estimates that the Games will be responsible for an increase of 10.8 million tourist visits between 2005 and 2017. They estimate that this will support a net tourism gain of £1.24 billion over the period between 2007 and 2017 and that 61,000 additional job years will be supported by the additional expenditure. Oxford Economics estimate that most of these improvements will take effect after the Games, with 79% of the impact expected from 2013 onwards.

4.60 Smith (2012) notes that there can be a positive long-term tourism impact from hosting major sporting events. However, this is not guaranteed. He finds that longer-term tourism effects relate to altered post-event demand, the supply of tourism facilities and the provision of new capacity.

4.61 In terms of altering post-event demand, cities use major events as a prime opportunity to re-brand their perception in the eyes of tourists. This is not straightforward, and requires a careful long-term strategy (Anholt, 2007). Major sporting events are therefore not a branding opportunity in themselves, but rather a media opportunity. In order to capitalise on this, it is essential that the host has a clear message which they can demonstrate in the short window when the global media focus is switched on.

4.62 Looking at the case of the Beijing Olympics, Zhang and Zao (2009) agree that major sporting events can promote certain aspects of the city. They will however, have limited long-term effects unless followed by a longer-term strategy that links the city to its current social and economic environment, and to its own core values; and perhaps most importantly, such events must be embraced by the people of the city themselves.

4.63 Westerbeek and Linley (2011) agree that a long-term approach is vital if a city branding approach is going to have a long-term effect. They find that cities which consistently hold a wide range of events are more likely to see a positive impact on city perceptions in the longer term than those that tend to focus on single-purpose events. They quote the example of Melbourne, which has re-branded itself as one of the major sports events destinations in the world. They have built on hosting events like the Commonwealth Games, Australian Open Tennis and the Melbourne Grand Prix to develop a lasting image as a place where major events are happening. In doing so, they have helped to create an events industry in the city which employs large numbers of people and generates significant direct and indirect expenditure (Westerbeek and Linley, 2011).

4.64 Some of the most positive long-term tourism effects were seen in post-industrial cities, in particular the Barcelona 1992 Summer Olympics and the Turin 2006 Winter Olympics (OECD, 2010). Both cities used the event to help develop the city's image and infrastructure as part of the wider re-development of the city and this helped to radically increase the perception as a place for tourism. Barcelona's Olympic Games in particular have been picked out as an example of where a city used an event to strongly re-brand its image to tourists. They did so by both highlighting the natural beauty and the culture of the city (as further discussed in the Connected section see page 47).

4.65 In addition, there is some limited evidence emerging that the Games have helped the perception of the UK abroad. The Nations Brands Index (2013) saw the UK move up from 4th to 3rd in overall international reputation (DCMS, 2013). Given the stable nature of this index, even a small increase near the top of the table such as this is seen as important. Nonetheless it is unclear how this will continue in the long-term, and how this will translate into quantifiable tourism numbers.

4.66 However, it is extremely difficult to disentangle this effect from the wider transformation of these cities which was happening at the time. Furthermore, the impact is not always positive. There is the potential for a negative impact on the image of a city, or region, if the event is not seen as a success, or if it highlights a perceived weakness in a country (Smith, 2012). This is particularly likely if the host adopts a branding approach which contradicts the underlying characteristics and assets (Herstein and Berger, 2013). It is also extremely difficult to control the brand of a city in the same way as product branding is controlled. Cities have a wide variety of objectives, and it is extremely difficult to demonstrate such a heterogeneous identity through a major sporting event.

Problems associated with games-time tourism

4.67 In his examination of the Lillehammer 1994 Winter Olympics, Spilling (1996) found that despite an initial tourism boost, tourism operators over-estimated the scale of the Olympic boost. In doing so, they created over-capacity in the tourism sector, leaving many hotel beds unfilled after the event. Looking at the same event, Teigland (1999) finds that the tourism boost was short-term and declined quickly after the Games. As a result, many businesses in the tourism industry in the Lillehammer region struggled from the lack of demand and many businesses closed down in the years following the event.

4.68 There is also a problem that effects may be asymmetric and as such the wider area surrounding the event venue may not benefit to the same extent as the city itself. The London East Research Institute found that while the immediate city saw an increase in tourist visits in Los Angeles and Sydney following their respective Olympics, there have been problems with the surrounding area recording a reduction in tourist numbers (London East Research Institute, 2007). Dansero (2010) also found that while the there was a 21% increase in tourism in the Metropolitan Turin area in the year following the event, there was a 11% decrease in tourism numbers in the wider area over the same period.


4.69 This chapter has considered the effects on business, the labour market and tourism. Within the evidence, there are some core themes which repeat across the sectors.

4.70 It is clear from the evidence that the most important short-term impacts are likely to be felt in the construction, hospitality and tourism industries. If there are long-term impacts, the evidence is strongest for a positive impact in the tourism sector, where an improvement to the perception of the host can lead to more visitors to the area.

4.71 Nonetheless, there is also evidence that there can be unintended consequences of hosting major events. This is most consistently seen where the event is seen as being unsuccessful or where the media coverage highlights some of the perceived negative aspects of the host area.

4.72 Overall therefore, more long-term research is needed on exactly which factors make positive long-term economic legacies more likely.


Email: Social Research

Back to top