Despite the one-year delay and a ban on spectators at the venues, the 2020 Tokyo Olympic & Paralympic Games are expected to create $55.75 billion in “economic benefits,” the Kyodo News reports.
The $55 billion projection is the work of Katsuhiro Miyamoto, a professor emeritus of theoretical economics at Kansai University. Miyamoto estimates that 3.27 trillion yen, or roughly $29.73 billion USD, is already available to Japanese society, in the form of construction venues including the National Stadium and the athletes’ village. The buildings of the athletes’ village, for example, will be converted into apartments after the Paralympics conclude. The remainder of the economic benefit will come from “consumption” during the Games and other legacy-related projects.
An example of this would be renovations that local businesses did to their properties in anticipation of receiving thousands of foreign guests during the Games.
“Hotels and restaurants spent money on renovations for the convenience and comfort of foreign tourists. I think this is one of the economic legacies of the Games and it will contribute to attract foreign tourists to Japan,” said Takahide Kiuchi, an economist at Nomura Research Institute, per TIME.
While Miyamoto puts a positive spin on the numbers, not every investor will see the 2020 Games as a financial victory. Miyamoto estimates that the Tokyo Organizers will face a 2.37 trillion yen deficit, or a loss of roughly $12.54 billion USD, including a $12.81 billion USD (1.41 trillion yen) for the Tokyo Metropolitan Government and a $7.94 billion USD (874 billion yen) loss for Japan’s central government. The remainder of the deficit (approximately $781.88 million USD; 86 billion yen) hangs on the Organizing Committee.
If Tokyo is able to repurpose any of its newly-constructed venues, or in the case of the National Stadium and the Tokyo Aquatics Center, use them in the future to host more elite and international-level competitions, the Organizing Committee and IOC will at least be able to take solace in that. Past Olympics, such as Rio de Janeiro 2016 and Athens 2004, have since been derided by critics for exorbitant spending on infrastructure that has fallen into disuse since the Games’ closing ceremonies.
In 2018, the IOC unveiled “The New Norm,” a list of 118 reforms aimed at making the Olympic Games more affordable and legacy-oriented for future host cities. Tokyo, however, was awarded the 2020 Olympics back in 2013. Nonetheless, the Tokyo 2020 Organizing Committee is said to have utilized The New Norm as well as other recommendations from the Olympic Agenda 2020, a list of 40 recommendations intended to provide “a clear vision of where we are headed and how we can protect the uniqueness of the Games and strengthen Olympic values in society.”
How much the lack of spectators will end up costing Tokyo 2020, the local and national governments, the IOC, and all other stakeholders is still unclear, though in January Miyamoto said the absence of fans could incur national economic damage of up to ¥2.4 trillion (nearly $23 billion USD). From a fiscal perspective, Tokyo 2020 will likely be viewed as an “it-could-have-been-worse” situation.