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What Did the Olympics Do to Tokyo’s Wallet?

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After a year-long delay, the 2020 Tokyo Summer Olympics have come and gone.

Japan moved forward with the event despite a sharp rise in COVID-19 Delta variant cases in the surrounding area. The move was decidedly for financial reasons. Yet one may wonder, how has hosting the summer Olympics during a pandemic financially impacted Tokyo?

Tokyo cited monetary concerns as one reason for continuing with the Olympics. Considering this, it might be shocking to learn that the 2020 Olympics cost more than twice what the city originally planned (Reuters).

This summer Olympics ran Japan a bill of 1.64 trillion yen, or $15 billion USD. The games ended up costing 22% more than they would have had they been held in 2020.

Now that the games are over, the bill has to be paid. Tokyo’s metropolitan government is mostly responsible for spotting it. 

Due to the rise in COVID-19 Delta cases, Tokyo decided to withhold spectators from attending the event. This caused organizers to lose $816 million USD in ticket sales alone.

Large events such as the Olympics purchase insurance, should the event be cancelled and the organizers subsequently lose ticket revenue.

Unfortunately, the Tokyo Olympics already used much of their cancellation insurance in 2020. Consequently the government will be unable to recoup much of the lost sales that occurred in 2021.

Additionally, as criticism mounted against Tokyo for moving forward with the games in the face of a pandemic, many sponsors withdrew their financial support for fear of condemnation from the public. 

Toyota was one such company, causing the games to lose millions in ad revenue.

Ultimately, the Tokyo Olympics were the most expensive in history. The second most expensive Olympics on record, the London 2012 Summer Olympics, was $11 billion USD cheaper than Tokyo.

Eight structures were built for the Tokyo Olympics, single-handedly costing the country $3 billion USD. Those structures mostly sat empty for the entirety of the event.

Is there a silver lining to Tokyo’s summer from Hell?

Probably not. Many countries that host the Olympics remain in debt for decades after. If anything, Tokyo should serve as a cautionary tale for countries bidding on the 2036 Olympics.

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Michelle D. Madsen

Michelle D. Madsen graduated from the University of Westminster and has been deeply involved in the world of finance ever since. She has worked as a Broadcast Journalist hosting various news shows and informative webcasts about the financial markets. Since 2004 she has also been writing for Metanews daily, her attention to detail, and her in-depth knowledge of the financial markets have led her to cover Foreign Exchange and commodities. The world of finance has changed in the last few years with the introduction and rising popularity of cryptocurrencies. She has in no means been left behind, adding this to her bank of intellect and is now also an expert in cryptocurrencies. For the last ten years, Ms. Madsen has been engaged in the financial market. She has notedly written a great number of incredibly informative reviews for the crypto exchange and forex brokers. Her wealth of knowledge has enabled her to become a leading expert in the field. She continues to inform the public writing up-to-date, thorough reviews for the readers of Metanews as she has for the last decade.
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