POSTED: February 2nd 2017
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Realistic Economic Impact being projected for Budapest and Hungary for 2024 Summer Olympics bid

THE DR. ERIC C. SCHWARZ COLUMN in MELBOURNE / An authoritative and exclusive series from Sports Features Communications

 

We have all seen the different economic impact figures of mega and hallmark sporting events.  Claims are that the Super Bowl this week that is will have a $500 million USD impact to the economy of the Houston metropolitan area.  The recently completed Australian Open in Melbourne claims to have provided nearly $300 million AUD into the Victorian state economy.

 

But is this all real?

 

First, we must note that economic impact versus actual new money being spent in an economy is very different.  Second, many times economic impact is skewed because of multipliers and expansion factors.  Third, many economic impact figures fail to exclude spending of local residents, time-switchers, and casuals.  And this is among numerous factors that can inaccurately promote the projected or actual economic impact of an event.

 

Multiple articles have been written questioning the accuracy and the realism of the economic impact projections for the Los Angeles 2024 and Paris 2024 bids.  But there has been very little covered regarding the economic impact study for Budapest 2024...

 

One of the major differences is both Los Angeles and Paris talk about the projected economic benefits, whereas Budapest reports the projected surplus income to the area.  This may seem like semantics, but projecting benefits that may be intangible in terms of currency versus projecting tangible surplus income seems to be more realistic.

 

You will also note that the figures being promoted by Budapest 2024 are significantly less than that of Los Angeles or Paris.  Some would see this as a sign of a weak bid... but those others who understand the analysis will see that Budapest is being much more conservative and realistic.

 

And then there is misreporting of data.  In a recent article that compared and reported economic impact projections for the three Olympic bids, one report said that Budapest projects $10.3 billion USD (2.983 billion HUF) in surplus income.  Actually, the currency conversion was inverted... 2.983 billion HUF equates to 10.4 million USD in surplus income - not billion.  So in effect, they are stating that after all revenues and expenses - the Olympics will create a 10.4 million USD profit... instead of reporting projected benefits and impacts that are intangible, not easily measured, and often inflated to look good to government officials and the public.

 

So what is the bottom line for the Budapest 2024 bid and economic impact?  In a report from Debrecen University, they explain that the concept for the Budapest 2024 Olympic Games bid is so closely aligned with the established Budapest Sustainability Development Plan that winning the bid would most certainly accelerate the development plans and create positive economic impact (among other impacts) on Budapest and Hungary.


According to AndrĂ¡s Krisztina, economist and Associate Professor at the Corvinus University said "Many of the benefits of hosting an Olympic Games are not quantifiable. One of the main focuses of Agenda 2020 is to allow bids to make a stronger case for developments that are already underway and will be realized irrespective of whether or not that city hosts the Olympics."  

 

**DR. ERIC C. SCHWARZ is a tenured Senior Lecturer of Sport Management at Victoria University in Melbourne, Australia. He has been an academician for 15 years in the areas of sport business management, international tourism, and hospitality management - with a special focus on the areas of sport marketing, sport finance, tourism, and facility/event management. He speaks globally and is the author of numerous publications in these areas, as well as been actively involved in consulting projects working with a multitude of sport and community organizations ranging from grassroots efforts to hallmark events.  


Keywords · Budapest 2024 · Olympics · economic impact


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