The 2020 Tokyo Olympics, delayed by a year due to the COVID-19 pandemic, cost twice the original 2013 estimate, organisers said on Tuesday as they closed the book on the event.
According to the organisers, the final cost of last year’s event stood at 1.42 trillion yen, equivalent to a whopping $1.63 billion at the time. Even at today’s exchange rate, with the yen at a 24-year-low, the cost stands at more than $10 billion.
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In their bid to the International Olympic Committee (IOC) in 2013, the Tokyo Games organisers had predicted expenditures to be in the ballpark of 734 billion yen, half of what it actually cost.
However, despite carrying the hefty price tag 1.42 trillion yen, the cost of the 2020 Tokyo Olympics was 200 billion yen less than the pre-Games projection presented by the organisers in December 2020.
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Part of the reason behind the hefty bill is the COVID-19 pandemic, which delayed the long-awaited event for a year, and led to Japan losing out on approximately $800 million from ticket sales, a cost which the Tokyo Metropolitan Government had to cover.
However, organisers managed to cut some costs as the capital of Tokyo did not have to arrange for the hospitality of millions of visitors who would have attended the event in the absence of the pandemic, savings which helped restrict the price tag to $13.6 billion from the projected $15.4 billion.
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The cost of the 2020 Tokyo Olympics provide further evidence to support Victor Matheson and Robert Baade’s study, ‘Going for Gold: The Economics of the Olympics’, wherein they observed, “the overwhelming conclusion is that in most cases the Olympics are a money-losing proposition for host cities; they result in positive net benefits only under very specific and unusual circumstances.”
That being said, Japan is mulling another Olympic bid, with the city of Sapporo bidding for the Winter Olympics 2030. While surveys show that the people of Sapporo and the surrounding regions are strongly in favour of bidding for the event, the Japanese government has ruled out holding any public referendum on the same.