Economic Impacts of 2012 London Olympics

Image from Wikipedia

Forbes.com listed the 2012 London Olympics as one of the 10 sports business stories to watch in 2012.

The cost projection of the London Olympics had been grown from $3.6 billion in 2005 to $14.4 billion in 2007. Forbes.com expects the total cost of the London Olympics would be between $15 to 18 billion. This number is the second most expensive Olympics below the 2010 Beijing Olympics with the cost of $40 billion.

As discussed before, hosting the Olympics can bring positive economic impacts to the hosting country and the city even it costs a great amount of money.

Video from cnn.com

Sebastian Coe, Chair of the London 2012 Organizing Committee (LOCOG), stated on the CNN’s interview that the London Olympics actually encourages the UK’s economy. 30,000 people have been employed for the project. Also, 98% of facilities have been built by British companies and generated £6 billion (= $9.5 billon) value.

He stated that most of the economic benefits of the London Olympics 2012 would affect the London’s economy. However, whole UK’s economy will get some sort of benefits from the London Olympics because British companies have contributed to the project most of parts.

The Telegraph stated that the London Olympics has already sold £300 million (= $470 million) on the ticket sale. This ticket revenue guarantees to grow the economy by 0.1%. It is also expected that £700 million (= $1.1 billion) will be spent by overseas visitors during the Olympic Games.

On the other hand, some articles stated there are some negative economic impacts by hosting the Olympics.

The same article from the Telegraph said the Olympics has damaged some traditional tourism industries. Public transportations will be overcrowded during the Olympic Games, and it will disrupt local businesses. Actually, the number of booking theaters is reduced.

Interestingly, less than half of businesses in UK think that the Olympics can boost the UK’s economy, the other article of the Telegraph reported. 53% of businesses in the South of England, including London, believe the London Olympics will be beneficial for their businesses. On the other hand, only 22% of them in Scotland believe it. Even people in UK think that the Olympics are profitable for only London.

There are some positive facts as well as negative facts about the 2012 London Olympic will boost or bust the UK’s economy.

Do you think the Olympics is profitable for the UK’s economy?

Please leave your opinion about it.