Today's Edition
WARDA AL-MENHALI (ABU DHABI)
The author is the Director of Corporate Communications at TRENDS Research & Advisory
Sports are no longer seen merely as recreational activities; they have evolved into a major industry and a driving force for development in many countries around the world.
Nations compete to host global sports events and invest in sports, recognising it as a profitable industry and a source of financial revenue, moving beyond its previous status as merely a hobby and entertainment.
Sports events have become an integral part of tourism projects, whether in the short or long term.
They involve hosting teams and fans from different nationalities and promoting the country’s tourist attractions.
However, such events are not limited to tourism alone; they pave the way for new investment opportunities, especially in sports infrastructure, hotels, transportation and other infrastructure components.
The 33rd edition of the Olympic Games, taking place in Paris, has a significant economic dimension.
This major international sports event serves as a global marketing platform for the host country and provides an unparalleled opportunity for international communication, perhaps only comparable to the FIFA World Cup.
It is expected that the Paris Olympics 2024 will boost the French economy, with estimated revenues exceeding 10 billion euros, including 3.5 billion euros from tourism, an impact on construction worth around 3 billion euros, and the creation of about 250,000 jobs, while the costs may exceed 9 billion euros, making the Paris Olympics one of the least costly in the history of modern games.
Paris has relied on the private sector to cover 96 percent of the budget for organizing the Olympic and Paralympic Games, with funding sources including the International Olympic Committee, sponsoring companies, and ticket sales.
The competition will feature 10,500 athletes from 206 Olympic committees worldwide.
With 8.6 million tickets sold, Paris has set a record, making it the highest in Olympic history.
The competition among countries to host the Olympic Games raises questions about the viability of organising such events, especially since financing might rely on borrowing, which could become an enormous financial burden for the nation.
For most of the 20th century, the Olympics were primarily hosted by wealthy countries capable of affording the expenditure, but the average cost of hosting was often three times the expected cost, and hosts did not typically expect to profit from the Olympics.
However, with the era of television broadcasting, the situation changed somewhat, not to mention the indirect economic value, such as the global promotion of the country’s name.
Hosting global sports championships provides an opportunity to test and showcase a country’s capabilities in planning and preparing human resources and in demonstrating the efficiency and advancement of infrastructure, tourism, and hospitality sectors.
Hosting major sports events is an opportunity for the host country to open up to the international community.
Sports activities have been influential in international relations since the first Olympic Games in Athens in 1896, fostering sports competition and bringing people closer.
The impact of sports on international relations increased after World War II, especially with political plans based on sports ideas, such as the Ping Pong Diplomacy used by former US Secretary of State Henry Kissinger to improve relations with China in 1971.
Revenue from the sports industry is diverse, including sponsorship contracts for teams and stadiums, money generated from advertisements, and ticket sales.
The global fan base for sports creates consumer markets for various products and services, driving commercial and investment pathways that propel economic growth.
Sports events accelerate growth in the travel, tourism, hospitality, and infrastructure sectors and help enhance the country’s diplomatic, sporting, and cultural status.
Sports have evolved to the point where they are a viable source of revenue, with the value of economic returns from hosting and organizing major sports events reaching approximately $500 billion in 2022.
Therefore, the economy of sports should be seen as an influential tool for achieving developmental goals.
Arab countries have the opportunity to harness the economic and social power of the sports industry, not just as a source of commercial returns but also as a means of competitiveness and soft power.
The Paris Olympics 2024 aims not only for athletic competition but also for stimulating the economy, creating job opportunities, improving public transport and communication networks, enhancing sports infrastructure, attracting foreign investments, and increasing the GDP.
With the growing interest in sports regardless of geographical boundaries, sports tourism is continuously expanding. In addition to economic and developmental aspects, major sports events contribute to showcasing the host country’s capabilities on an international level.
