Paris 2024: Olympic Games or Debt Games for the French?

By Chloe Destabel

1976. This is the date of a veritable financial disaster with significant consequences: the Montreal Olympic Games. These games led Quebec City into a deficit of one billion dollars, partly covered by residents through additional local taxes and a special tax on tobacco imposed throughout the province of Quebec. The debt assumed by Canadian citizens has extended over 30 years. This does not even include the ongoing maintenance costs of Olympic infrastructure, which added a further deficit over 35 years. It was not only an economic disaster for Canada, but also bad publicity for the International Olympic Committee (IOC) since only one application (Los Angeles) was proposed to host the next Games. Since then, the IOC has paid particular attention to the quality of the economics of the applications. In France, despite the Winter Olympics in Grenoble (1968), which again resulted in a deficit for which the people of Grenoble paid the price, or the Winter Olympics in Albertville (1992), whose costs exceeded initial forecasts despite a preliminary study predicting that the benefits would be negative, France decided to host the 33rd edition of the Games this year.

From July 26th to August 11th for the Olympic Games, then from August 28th to September 8th for the Paralympic Games, the Seine had planned to welcome more than 15 million visitors and 15,000 athletes, according to a study conducted in January 2024. Yet, just before the Games began, the Parisian Olympic weather was not up to par: restaurateurs and hoteliers complained of being deserted for the season, CO2 emissions exploded, Parisians fled the capital and the number of expected tourists decreased. Is France repeating the curse of Olympic failure, taking all the French with it? The TSE economist looks back at the economic situation of the long-awaited event: the Paris 2024 Olympic Games.

More than uncertain bill

It would be one of the least expensive Olympics since Seoul 1988, considering the infrastructure costs, the number of events and the value of the currency. However, the figures are vague, the cost estimates are broad and the final bill uncertain.

Two major types of expenses emerged from the budget of the Paris Olympics: the budget related to the organization of the event, managed by the Organizing Committee of the Olympic Games (OCOG) and the expenses concerning the infrastructures, managed by the company Solideo.

The estimated cost of the Olympic Games varies between 9.5 billion and 12 billion depending on the source, or 45% to 50% more than what was predicted by Paris in 2015. Indeed, the costs of the Olympic Games are always underestimated, since the final cost fluctuates between 1.5 and 3 times the initial bill since Seoul 1988. The consulting firm Asterès established in mid-July a bill of 9.5 billion euros, divided equally between organization and infrastructure. Of its 9.5 billion euros, 2.9 billion comes from public money. Of its 2.9 billion again, half was used to clean up the Seine. This money spent in the Seine will, of course, be used by the French, since you are now invited to swim. In Paris, Toulouse resident James Colomina denounced the enormous cost of the cleanup on July 10th by setting up on the quays of the Eiffel Tower to sell bottles of Seine water. Spoiler: sales were poor.

High revenues but still below costs

Positive economic spin-offs, economic growth or employment: these are the hopes of a city that is a candidate to host the next Olympic Games. The figures are unanimous: between 6.7 and 11.1 billion euros (inflation included) will ultimately go into the pockets of the French thanks to the Olympic Games. The calculation seems simple: we calculate the increase in activity due to the Olympic Games and then compare it to a situation in which the Olympic Games had not seen the light of day in Paris. As a result, the absolute amount of revenue is high, even very high. The price of a ticket varies between 24 to 27,000 euros depending on the type and location of the event, multiplied by the number of people, the figures climb quickly and that's without taking into account the additional economic activity generated by tourists. Keynes had already warned us that public spending was a key factor in economic recovery, even if he probably didn't plan to inject billions to make millions. Indeed, the picture is not so pretty since studies, when they are not mandated by the government, estimate that in general, the games have no, or a negative, economic impact on the host country. With a cost ranging between 9.5 billion and 12 billion and revenues expected between 6.7 and 11.1 billion, the Olympics may leave a debt as a legacy to the French.

The economic increase in activity extending from 2018 to 2034, in order to take into account the preparation phase, the running of the events as well as the legacy of the Olympics therefore seems to be left as a legacy, a debt for the French.

Tourism wasn’t as good as expected

Paris has been a tourist destination for a very long time. In 2023, Greater Paris welcomed 6.2 to 6.4 million tourists between July and August, or half of its population. The occupancy rate of hotels in Greater Paris was then 76.6% (down compared to 2022 and 2019). According to Paris City Hall, nearly 16 million tourists were expected during the Paris Games. Hotels and restaurateurs should therefore have welcomed such an announcement, in order to overcome the difficulties arising from the post-Covid years: this was clearly not the case. In March, while all the hotels in the capital had considerably increased their prices at the start of the Olympic Games, prices are down (on average, 481 euros per night between July 26th and August 11th): they are not full. And finally, against all expectations, 15 days before the Olympic Games, Paris was emptying. The occupancy rate of Parisian hotels did not exceed 50%. Nearly half of Parisians were considering fleeing the capital in August to avoid the crowds and soaring prices. Small restaurateurs, who were hoping to finally fill their terraces, found themselves in competition with the Games Committee, which set up fan zones with refreshment stands. Between the unstable political climate with the dissolution of the General Assembly, the flight of Parisians, restaurateurs and hoteliers in difficulty, for the moment, it is more the French who seem to be bearing the brunt of these Olympic Games.

A controversial environmental and social plan

Sustainable mobility is promised by the Ministry of Ecological Transition: all the sites where the competitions will take place will be accessible by public transport, initially announced as free according to the application file in order to encourage their use. Finally, if an unfortunate person had not bought their ticket before July 20th, they paid the high price of 4 euros per ticket instead of 2.15 euros. In addition, 120 km of cycle paths have been created for the Games. A real blessing for the planet. Note that the main mode of transport for tourists to come to France is not the bicycle, but the plane. Nearly 2 million tourists took the plane to attend the Games, enough to fill the CO2 emission quotas. A "low" budget for the Paris Olympics, due to 95% of the infrastructure already existing. Yet, who is interested in ecology when you can build a magnificent Olympic swimming pool, destroy 30,000 m2 of green spaces, install a Solarium in Aubervilliers, cut down trees for a mountain bike track, give up a plot of parkland to build the media village, deliver a tower to host the jury in Tahiti in the center of a fragile ecosystem or even chemically clean to depollute the Seine. These are all examples of measures taken by the government. But rest assured, all athletes should use a water bottle instead of a plastic one.

After cleaning the Seine, we also witnessed the "social cleansing" of Parisians. Paris decided not to solve the problem, but to hide "the marginalized, refugees, undocumented immigrants and sex workers" by giving them a one-way ticket to leave the capital. Nearly 13,000 people were evicted from the Paris region between April 2023 and May 2024. Only 35% of them were rehoused. The Olympic charter puts inclusion at the forefront, but exclusion was a major concern for Paris before the arrival of tourists.

Conclusion 

The Paris 2024 Games are a complex mix of vague figures and promises that do not reflect reality. While the costs are emerging, the profits generated seem uncertain. Very optimistic forecasts that contrast with hotels and restaurants that must have attracted a fleeing clientele. The situation was no better on a social and environmental level, between ecological impact ignored in favor of pretty temporary buildings or expulsion of a population already struggling to integrate. Will the French pay the price of a financial disaster? We will have to wait until the fall to have the official report on the cost and benefits of this edition of the Olympic Games.

Réussite : https://www.tf1info.fr/jeux-olympiques/sondage-jo-2024-la-ceremonie-d-ouverture-jugee-reussie-par-plus-de-85-des-francais-2310775.html