2024 Olympics: France aims for gold in tourism and infrastructure – Al-Mareeq Al-Iqtisadiah

With an estimated cost of at least €8.7 billion and likely to exceed €10 billion, France is organising the 2024 Olympic Games, betting on reputation, prestige, tourism, increased tax revenues, continued infrastructure enhancement, greener development and boosting economic activity.

The challenges are many, as with all countries and cities that host the Olympic Games every four years, but so are the promises of great benefits. Thousands of tickets are apparently not yet available, and Parisians are complaining about traffic congestion, but at the same time, 15 million visitors are expected to arrive in the country and city for the Games alone. This is expected to greatly enhance France’s already top position as the most popular tourist destination in Europe. At the same time, there is much promise of a “gold” medal from the Games, especially in the areas of tourism and infrastructure.

2024 Olympics: Everything you need to know before you start [γραφήματα]

A large part of the state’s costs are expected to be covered by tax revenues, mainly due to increased consumption and the use of new and renovated infrastructure after the Games, from the venues for the games and events to the Olympic Village for athletes and 2,800 residences.

With one of the world’s biggest sporting events already attracting global attention, the Financial Post today presents the first major economic forecast for the French economy since the 2024 Olympics.

Macron’s cost forecast

The official budget for the 2024 Olympic and Paralympic Games was estimated in the spring at around €8.8 billion, 15 percent more than the amount announced when France submitted its bid in 2017.

In the spring, President Emmanuel Macron said France had invested €2 billion of public money to build the facilities needed for the games. “Housing, offices, sports facilities. That €2 billion has created businesses worth more than €6 billion. We’ve put 2,000 companies into operation and created jobs,” the French president said at the time, according to Euractiv.

The Games budget is expected to eventually exceed €10 billion, or 0.4% of France’s GDP, Euractiv sources said. That figure does not take into account the additional cost to the state, particularly in providing security in public places.

Organizing Committee Funds

According to May figures provided by Euractiv, the Organising Committee of the Olympic Games (OCOG) has €4.4 billion at its disposal to host athletes and organise the Games, 97% of which comes from private funds. An additional €4.4 billion, 50% of which is public funding, will go to SOLIDEO, the Livraison des Ouvrages Olympiques, which is responsible for overseeing the construction and renovation of the country’s sporting and non-sporting infrastructure.

What does the state expect to collect?

According to a study by Asterès Consulting, the costs associated with hosting the 2024 Olympic Games are expected to generate 5.3 billion euros in tax and social security revenues, an amount almost equivalent to the public spending implemented, as mentioned.

INSEE Games and Development Estimates

The first forecast from the French statistics agency, INSEE, is for growth in the third quarter of this year to rise to 0.5% from 0.3% in the second quarter. The Olympic Games, which will run until mid-August, are expected to have a positive impact on the country’s GDP by a total of 0.3 percentage points, mainly due to increased tourism, ticket sales and large sums allocated for television rights, the same as the forecast. The positive impact on the economy is expected to be similar to that of the 2012 Olympic Games in London, according to data from the National Institute of Statistics quoted by Reuters.

Increase in the number of tourists

Air travel bookings to France are expected to rise 10% this summer compared to the same period last year. In total, more than 15 million visitors are expected to visit France during the 2024 Olympic Games.

Thanks to tourism and other factors, France’s annual GDP growth will rise to 1.1% this year, reaching the same growth levels in 2023, according to estimates by the National Institute of Statistics and Economic Studies.

Home consumption

The National Institute of Statistics and Economic Studies also indicated optimism that the French economy will benefit from household consumption. This consumption is expected to be boosted by the Olympic Games. However, the statistical service warns that total investments, during the second half of the current year, will not see any further growth, as interest rates remain relatively high, as noted.

The French statistics agency expected inflation to continue to decline during the rest of the year, reaching 1.9% in December from 2.1% in June.

Impact on the construction industry

The project is also expected to significantly benefit the construction sector, according to a Morningstar DBRS report on the 2024 French Olympic Games.

As one of the world’s largest sporting events, attracting billions of viewers, the Olympics can be described as a catalyst for transformation in host cities. As such, they provide a good opportunity for small and large construction companies in these cities to benefit from increased spending on transportation and infrastructure, the house said. Overall, Morningstar DBRS estimates that the surge in construction activity after the Olympics “provides a short-term economic benefit to local contractors. While we do not expect long-term revenue and profits for these companies once these races are over, the improved knowledge could help boost their competitiveness to achieve carbon neutrality and ultimately net zero goals by 2050,” the house also says.

Host countries are encouraged to use existing projects that they are renovating, expanding or converting so that all construction activities associated with such major sporting events move in a more sustainable direction, the report said. It notes that this creates interest for local construction companies with green building expertise, but also presents real challenges for these companies to explore and use emerging green products and technologies, meet current legislation and meet stringent labor and insurance restrictions. “We believe that these increased investments (…) will continue to have a positive credit rating for the construction industry, improving revenues and profits for companies with the necessary expertise,” Morningstar DBRS estimates.

DBRS: Advancing the Green and Sustainable Construction Industry

Morningstar DBRS also estimates that the Paris Olympics are set to showcase advances in innovative green building designs and prefabricated timber construction.

Only two new main buildings were built for the games while the rest were renovated:

– The Athletes’ Village. It cost around €2 billion to build, largely covered by private investors. Sustainability initiatives include the use of low-carbon concrete, timber construction and renewable energy. The village is expected to emit around half the carbon emissions over its lifetime compared to a village built using standard construction techniques, according to the house. After the Games, the Athletes’ Village will be used to meet Paris’s immediate housing needs. About a third of the 2,800 apartments will be sold. Another third will be reserved for public housing, and the rest will be rented to students and others.

– The report says the aquatics centre, a sports centre estimated to cost €180 million, is supported by the world’s largest hollow timber frame, spanning 90 metres and using more than 2,700 cubic metres of wood. The structure’s roof is one of the largest solar parks in France. It filters light, collects rainwater and captures solar energy to meet around 20% of the building’s electricity needs. All seats are made from 100% recycled materials.