Holger Preuss

Maximizing Olympic Impacts by Building Up Legacies

This contribution adds to the controversial discussion of the investment of scarce public resources in mega sport events such as the Olympic Games. The positive, or negative, legacy of mega sport events will be considered. A definition of legacy will be given, how legacy might be measured is discussed and the key elements that make up a legacy are identified. Examples are taken from recent Olympic Games and other mega sports events such as the Manchester Commonwealth Games in 2002.

The Economic Impact of Visitors at Major Multi-sport Events

Abstract This paper examines the economic impact of major multi-sport event on affected people. Their spending increases the economic benefit for the city and region staging the event. Therefore a theoretical differentiation of movements of persons affected by the event was done. A model was worked out to detect the regional primary economic impact through these people. This primary impact can be used in any model of economic impact analysis, such as input–output frameworks or multiplier theory. The complexities in considering the right persons and their spending are analysed and described in detail. A special focus is placed on the evaluation of opportunity costs on people that get crowded out as a result of hosting the event. Conclusions highlight the value of the right evaluation of the consumption of anyone affected by the major multi-sport event. Furthermore interesting findings on the consideration of “time switchers” and people avoiding the host city were made. Bidding for major sport events creates high levels of competitions between cities. As a result, event visitors, which are the main source of benefits, gain importance for the decision-making processes in whether to bid or not.

Attracting Major Sporting Events: The Role of Local Residents

Abstract The decision where to host major sports events is the result of a political process, involving local and national politicians as well as national and international sport governing bodies. Politicians and local/national sport governing bodies decide whether to apply for an event, while international sports governing bodies select the host cities (nations). Local and national residents play an important role in this process as their opinion will influence whether the political system supports the application and is willing to fund the event. Many event impacts have characteristics of public goods and externalities. This represents a potential welfare economic rationale for the public sector to fund them. Empirical data from 117 polls of urban and national residents that either have hosted or applied for events reveal that three out of four residents supported hosting the event. Statistical analyses show the strongest support to be in low-income nations. This raises doubts whether such events should be regarded as luxury goods, which is a typical characteristic for sports goods. The major reason for this can be that people are aware that the events will influence the production of other goods and services in society. In particular people in nations where the public sector has had a financial deficit in the years before the poll were more sceptical than others. This pattern does not occur in heavily populated nations where event-related costs represent only a “drop in the ocean” on a macroeconomic level. The surveys also indicate that economic growth resulted in people voting more positively in favour of the events.

FIFA World Cup 2006 and its legacy on tourism

This chapter discusses the legacy of the FIFA Football World Cup 2006 and its effects on tourism. First of all, the ‘concept of legacy’ is defined. The problems of measuring and forecasting tourism legacy are then discussed. Facts are presented which demonstrate that benchmarks and methods for measuring tourism growth triggered by a major football tournament are not relevant for detecting event tourism legacy. Hence, a bottom-up approach is introduced, which identifies the event legacy by evaluating all football World Cup-related changes in the host cities and the host country. These changes are the so called six ‘event structures’ (infrastructure, knowledge, image, emotions, networks, culture). Many of them change the location factors and may finally affect the perception of a tourism destination in the long-term.

Profiling Major Sport Event Visitors: The 2002 Commonwealth Games

It has become common practice for governments and municipalities around the world to bid for the right to host a major sporting event. Prior to embarking on the bidding process, politicians attempt to determine whether such an event will be of value to their municipality; and often focus on the estimated economic consequences of hosting such an event. Frequently, studies are commissioned to predict the events economic value. However, these studies often miscalculate the potential impact of sport event visitors as consumers. We argue that enhanced profiling of these visitors will enable a more accurate assessment of economic impact. The current research surveys 1,196 spectators of the 2002 Commonwealth Games to demonstrate four important aspects of visitor profiles related to economic impact: (i) visitor typology, (ii) sport tourist behaviors, (iii) consumption patterns determined by interest, and (iv) consumption patterns determined by distance traveled. Overall, the work makes three important contributions to the literature by: (i) empirically supporting that different sports attract different market demographics, (ii) underlining the need for segmentation in economic impact studies, and (iii) identifying the need to develop metrics of economic impact analysis that consider segmentation effects.

A framework for identifying the legacies of a mega sport event

A mega sport event involves huge investments in city infrastructure. After the event, the structures that remain may be an asset to the stakeholders, or they may be a burden. Faced with high costs, the taxpayer demands that the event-related social, economic and ecological changes will in the end have improved living conditions for the host city. But it is not easy to identify sport event legacies in their entirety, because event-related changes may be confused with non-event-related development, and because a wide variety of areas and stakeholders are affected. This paper looks at how to identify legacies, who is affected by the legacies, how long they last, and how to judge whether a legacy creates or destroys value. It stresses that legacies affect stakeholders differently – positively for some and negatively for others. It considers how to maximise positive legacies and suggests that these can best be controlled by governmental organisations. It notes that legacies gain and lose power over time and that often a legacy will be activated only if environmental changes offer opportunities.

A method for calculating the crowding-out effect in sport mega-event impact studies: The 2010 FIFA World Cup

Tourist expenditures constituted the largest part of the economic impact of South Africas 2010 FIFA Football World Cup. However, limited air transport capacity and increased accommodation prices may have led to crowding-out effects. Until now, crowding-out could only be considered by using econometric modelling based on data of inbound arrival or accommodation statistics. This paper suggests a methodology for measuring the crowding-out effect precisely. It is based on the available statistics in South Africa and is applicable at province level. An important innovation is to distinguish crowding-out from time-switching effects. The paper explains the theoretical framework of crowding-out as part of impact measurement, discusses the technical problem of assessing crowding-out, and supplies formulae for calculating this effect. Although this is a study of the 2010 FIFA World Cup 2010 specifically, the methodology described here is appropriate for calculating the impacts of other mega-events.

The impact and evaluation of major sporting events

Introduction 1. Post-Event Outcomes and the Post-Modern Turn: The Olympics and Urban Transformations 2. Insights from The XVII Manchester Commonwealth Games 3. Padding Required: Assessing the Economic Impact of the Super Bowl 4. Growth Impact of Major Sporting Events 5. Attracting Major Sporting Events - The Role of Local Residents

Calculating the regional economic impact of the olympic games

This study introduces a methodological concept to combine the cost‐benefit analysis and input‐output models to create a new method to regionalize Olympic costs and benefits in order to define the economic impact at the regional level. This new form of analysis is used to calculate the regional economic impact of the Frankfurt Rhein/Main region, which bid to stage the 2012 Olympics. A generalised view of the Frankfurt case study shows patterns that are valid for all impact studies of major sport events. Finally a sensitivity analysis is used to determine critical variables.

Opportunity costs and efficiency of investments in mega sport events

Economic analyses of mega sport events usually focus on the positive effects and legacies while ignoring opportunity costs and the efficiency of using scarce resources. Event opponents argue that decisions to invest public resources should also consider alternative uses of the money. This paper aims to clarify some of the issues surrounding the opportunity costs of mega sport events. By using the measure ‘efficiency’ (output/input) of alternative investments it will become clear that the decision to stage a mega sport event cannot be taken in isolation and that there are many factors that need to be considered. The argument put forward is based on a stakeholder’s perspective and a spatial differentiation of interest groups. Keywords: opportunity; cost mega sports events; legacy Abstract Los análisis económicos de los grandes eventos deportivos normalmente se centran en los aspectos positivos y el legado aunque ignoran los costes de oportunidad del uso de recursos escasos. Los que se oponen a los eventos argumentan que las decisiones de invertir recursos públicos deberían considerar usos alternativos de esos fondos. Este trabajo busca clarificar algunos de los aspectos relacionados con los costes de oportunidad de los grandes eventos deportivos. Utilizando la medida ‘eficiencia’ (input/output) de inversiones alternativas quedará claro que la decisión de llevar a cabo grandes eventos deportivos no puede tomarse aisladamente y que hay muchos factores que es necesario considerar. El argumento propuesto está basado en la perspectiva de las partes interesadas y una diferenciación espacial de los grupos de interés. Keywords: costes de oportunidad; grandes eventos deportivos; legado Résumé Les études économiques sur les méga‐événements sportifs se concentrent sur les effets positifs et les héritages sans tenir compte des coûts d’opportunité et l’efficacité d’utilisation des rares ressources. Ceux qui sont contre cette initiative avancent que les décisions sur les investissements des fonds publics devraient explorer l’usage alternatif de ces fonds. Cet papier a pour objectif de clarifier certains points concernant les coûts d’opportunité des méga‐événements sportifs. En recourant à la mesure ≪«efficacité»≫ (sortie/entrée) des investissements alternatifs, il sera clair que la décision d’organiser un méga‐événement sportif ne peut pas être prise dans l’isolement et que d’autres facteurs doivent être pris en compte. L’argument avancé se base sur la perspective du bailleur de fonds et de l’écart spatial des groupes d’intérêts.