Impact of Hosting Mega Events: Do the Benefits Outweigh the Costs? (Essay Sample)

Impact of Hosting Mega Events: Do the Benefits Outweigh the Costs?
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Impacts of mega events
Introduction
Mega events have increasingly become part and parcel of society’s cycle of events. These range from sporting events such as the Olympic Games, the FIFA World Cup and World Athletics Championships to international cultural and commercial festivals and/or expos, which attract extensive participation globally (Jonathan 2009). These events leave a wide range of socio-economic, political and even physical impacts, particularly on the host countries. The impacts may be positive or negative. In fact, According to Malfas,Theodoraki and Houlihan (2003), the number of cities that bid to host the events has significantly increased owing to the anticipated/perceived benefits. However, as this essay notes, the benefits that accompany hosting of mega-sporting events come with more negative impacts which cannot be overlooked unless the gains are overestimated while costs are underestimated.
As already stated, hosting mega sporting is often motivated by a promise to gaining vast economy windfall. However, according to Jonathan (2009), since cities hosting the mega-events commit significant investments towards stadia for sports and additional miscellaneous infrastructure expenses, valid questions arise whether economic benefits gained can really compensate for costs incurred. This is upon considering not only the vast costs, but also the associated risks that are substantially incurred. In fact, a major concern has been raised whether the games are a lottery jackpot (Preuss, 2006) or a ‘fool’s gold’ (Baade and Matheson, 2002).
Secondly, most mega events are usually held in popular tourist attraction centres within the host country. This has been associated with diverse negative externalities like congestion, which may dissuade some regular tourists who are non-interested from visiting during the event. According to Jonathan (2012), this ‘crowding out’ is also experienced when local hotels and restaurants become filled to capacity leading to displacement of, and associated inconvenience to, regular visitors. This usually results in a net impact that is smaller than the predicted. A good example is explicated through FIFA World Cup in South Korea (2002). Estimates indicated that during this event alone, the overall number of foreign visitors equalled that recorded in the entire previous year. According to Disher and French (1997), hotels and restaurants that were located away from the Olympic Park at Atlanta were noted as recording significantly lower volume of sales than normal during the Games.
It is imperative to note that hosting mega events provide an opportunity for massive establishment and/or improvement of infrastructure. Unfortunately, people tend to perceive only the positive side of the processes of construction for events. Dubious information is provided when studies economic impacts are being made basing only on the positive side as noted by Siegfried and Zimbalist who recorded that workers for construction work live outside the country hosting the events. Moreover, economists have thus far never proven any significant correlation between construction of sports stadia, for instance, and the anticipated economic development to the host country (Noll and Zimbalist, 1997; Coates and Humphreys, 1999). This is not to overrule the possible social benefits of such development. Other economists have argued that during mega events, the economy may run up to or close to full employment to an extent of outsourcing for certain aspects. Outsourcing is seen as a direct means of wiping away economic benefits from the local population (Matheson, 2006). A case in point is the 2010 FIFA World Cup in South Africa which attracted massive investment in revamping associated infrastructure. It was, however, noted that skilled workforce outsourced in the name of ‘campaign for decent work’ (Statistics South Africa, 2008). According to Jonathan (2009) estimation of direct’ expenditures as result of such events are used to deduce for ‘indirect’ effects, which are prone to exaggeration more often. Thus, it is a reality that the local residents may not actually get direct benefits due to supply-side leakages. Additionally it may imply greater borrowings by the government or higher taxation levels.
Another form of supply chain leakage occurs when there is a temporary entry for external firms who sell their products during the sport events. As such, the mega event becomes an economy to itself which means that much income flows to firms which do not make permanent elements of the indigenous economy (Matheson, 2006). Substantial leakages are also experienced from the people who have active involvement during staging of the Games and the businesses providing goods and services at the time of the event (Baade, 2006). The best example is when the local economy runs at full employment whereby restaurants and hotels require additional labour. Thus to deal with levels of tourists that are greater than normal, the host countries resort to hire from external people where there may be a surplus.
As noted by Richter et al (2014) mega events contribute to negative social aspects such as experienced in south Africa world cup 2010. It was observed that human trafficking was on the rise with people being forced into prostitution. On the same, the negative social impact was felt in fear of crimes which led to police harassment especially on the locals. When preparations were being made during ...