The Impact of Special Events on Economic Development

Special events are undoubtedly beneficial to the host countries; especially in terms of economic development. An example of such special events is the Olympic Games which is held after every four years in different countries. The games entail different sports activities in which thousands of individuals compete. The Olympic Games have their origin in ancient Greece. They were festive activities that were dedicated to the celebration of and for Zeus - a Greek God (Young, 2008; Miller, 2008; Finley, & Pleket, 2012). Later on, several changes were made which saw the inclusion of various events such as the footrace, javelin, and wrestling as part of the activities in the festivals (Tien, Lo, & Lin, 2011).

Since their inception, the culture of holding the Olympic Games have been carried on by one generation to another until the present era. Currently, Countries are often invited by the organizing body (the International Olympic committee) to bid for hosting the event (Floros, 2010). It goes without saying that the Games have adverse effects on the countries that host the countries similar to any other mega-events that are held at different intervals in different countries. An example of such countries that have hosted the games includes Sydney and Athens in the years 2000 and 2004 respectively.

Notably, the influx of many participants and spectators had a significant impact on the economic development of both Athens and Sydney. For instance, Song (2010), Carey, Mason, and Misener (2011), and Fourie and Santana-Gallego (2011) highlight that the mega-events have both positive and negative impacts on the economic growth of the countries that host them. Song (2010) enumerates various advantages such as the construction of new stadia or arenas for the sports activities, new infrastructure, increased international relations, and the creation of new local business opportunities, additional employment, enhanced welfare, and the revival of urban center as some of the merits of hosting such mega events. The local infrastructure such as roads and stadia of both Sydney and Athens were renovated and new structures were put in place in preparation for the Olympic Games. Moreover, the influx of thousands of people from different parts of the world in the city increased the demand for the available goods and services in the cities, thus, business owners made a lot of profit.

Arguably, the hostage of the Olympic Games in Sydney and Athens boosted the flow of money and the amount of revenue that the governments earned from the same. Billings and Holladay (2012) record that countries generate and spend more than ten billion US Dollars on hosting the summer Olympic Games. Certainly, such amount of money is likely to change the economic situation of a country. Moreover, Ritchie, Shipway, and Cleeve (2009), Kasimati and Dawson (2009) and Kaplanidou and Karadakis (2010) affirm that one of the main benefits that countries acquire from hosting the Olympic Games include increasing the international trade flows as the event stimulates both exports and imports. Petrenko (2016), Getz (2008) Leopkey and Parent (2012), and Feddersen and Maennig (2013) also cite increased tourism, during and after the mega-events, as a major reason that motivates countries to bid for hosting the activities as they stand a chance of gaining substantially from the same for a long time. In light of the statements by the authors, someone can assume that both Australia and Greece aimed at boosting their tourism sectors when they bid for hosting the games.

Other than the economic impact, other authors such as Lenskyj (2012), Minnaert (2012), Glynn (2008), and Gursoy et al. (2011), emphasize that hosting super events such as the Olympic Games and the World Cup have social impacts on the host countries. As such, people who attended the Olympic Games in Sydney and Athens had a chance to interact with the locals and learn their culture. Moreover, Lenskyj (2012) highlights that the super-events enhance gender equality through increased women participation in competitive sports, thus, exposing their potentials and abilities. According to the author, liberal feminists endorse such events as the Olympic Games that give women equal opportunities to compete in the sports activities on the grounds that they remove the existing barriers that promote gender inequality between men and women (Lenskyj, 2012). Similarly, other people point out that the mega-events provide avenues for social interaction and cultural exchange (Garcia, 2008; Boukas, Ziakas and Boustras, 2013; Boukas, Ziakas, and Boustras, 2013).

On the other hand, Song (2010) and Atkinson et al. (2008) identify the following as some of the negative impacts that hosting such events have on the countries; increased property rental fees, high costs of constructing the sports infrastructure, overcrowding of people, and investments that are related to the sports events among other factors. Further, Müller (2015) Giesecke and Madden (2011) also highlight that hosting super events can be negative impacts on a country’s economy despite the existing merits. While focusing on the Olympic Games held in Australia, Sydney in 2000; the authors estimate that the country lost a total of 2.1 billion dollars by hosting the event (Giesecke & Madden, 2011).

The Significance of the Study

In light of the above revelation that hosting super events have both negative and positive impacts on the host countries; it is imperative to investigate how the events influence the livelihoods of the citizens. Moreover, the results of an in-depth investigation of the impacts of the events can be used to prevent any future losses that might be incurred by host countries and aid in the cost and benefit analysis of holding the activities. Given that the most countries often overlook the potential risks that are involved in hosting super events and instead focus on the advantages which are rather obvious; there is a need for a proper and detailed enlightenment on what it entails to host the events in terms of economic development and financial stability. The study will, therefore, provide such detailed information that can be used by countries that wish to host the events in the future to inform their decisions and bidding process.

In addition, various scholars such as Gratton and Preuss (2008), Fourie, and Santana-Gallego (2010), Rose and Spiegel (2011), and Fourie and Spronk (2011) only mention how hosting mega-events affect countries in general terms. However, the existing literature does not provide clarifications on the exiting trends of the events and their characteristics as well as the comparison between the risks and benefits of hosting the activities. Therefore, by focusing on Sydney and Athens as examples, the study explores the importance of the events on the host cities with respect to the employment opportunities, redevelopment, and tourism which stand out as the major benefits.

The focus on the two cities as case studies is essential as it provides a cross-analysis of how the events affect different cities that have unique features and economic setup. Therefore, the results can be applied generally on other cities given that variance in economic status and other relevant features will be taken into account during the exploration. On the flip side, it examines the costs or rather the disadvantages of hosting the events, thus, providing relevant stakeholders with critical information that pertains to national growth and development.

Justification of the Study

The study is viable because Athens and Sydney are two of the most renowned cities in the world which are highly dependent on tourism as an economic activity. Similarly, they stand out as strong regional economic hubs. Therefore, an investigation into how hosting the Olympics Games in the year 2004 and 2000 respectively provides a critical understanding of the impacts that holding a super event can have on cities. Further, as mention before, the focus on two different cities (Sydney and Athens) provides a comparative view of how the cities are affected by super events while taking into account the differences in their features. As a result, the research will address the issue of generalizability of the previous studies that aimed at investigating the impacts of super events on the host countries or cities. Moreover, the study speaks to the concepts of marketing within the global economy and international business. It also relates to international business event management and international festival and event management as outlined in the program on the grounds that hosting such mega-events has major impacts on the economies of the cities where they are held.            

Aims and Objective

Most of the previous literature indicates that holding mega-events is beneficial to the host countries. However, it is imperative to investigate the facts about the phenomenon and ascertain whether that is the case. As such, the following are the aims and objectives of the present study:

1. To confirm whether holding the super-events is beneficial or burdensome to the host countries.

2. To provide a new perspective on the impacts of special events on cities.

3. To identify the nature and features of mega-events while focusing on the Olympic Games.

4. To evaluate the complexities and depth of socio-economic impacts of hosting super-events.

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