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The Economic Impact of the Olympics

As world attention shifts to the Olympic Winter Games in Turin, Italy, local organizers are hoping that the international media exposure will help the region's economy. It is one of the reasons why cities around the world compete so intensely to host the games.

In theory, increased economic investment and tourism will more than cover the billions of dollars required to put on this international sporting event. But as VOA's Brian Padden reports from Salt Lake City, the site of the last Olympic Winter Games in 2002, the Olympics long-term economic impact has been limited.

The 2002 Olympic Winter Games are just a memory now here in Salt Lake City, Utah in the western United States. The games were considered a great financial success. Private revenue, mostly from advertising and television broadcast rights, not only paid for the games but gave back to the community over $100 million.

Salt Lake Chamber of Commerce President Lane Beattie says the city is now on course to generate over $2.5 billion of economic growth -- all because of the Olympics. "The world shrunk for Utah. That's the experience that the Olympics bring. It's like being involved in something much greater."

The ski industry is considered one of the great beneficiaries of worldwide Olympic exposure.

Krista Parry, spokesperson for nearby Park City Mountain Resort, says because of the Olympics the ski industry here has experienced over 12 percent growth since 2002. "Park city was featured on every single media outlet that there is out there and I think that's huge. You cannot get that sort of exposure anywhere."

Some visitors to Park City, like Mike Hamlin, say they came here because of the Olympics. "We originally looked at Park City and were thinking of coming for the Olympics but at the time things were a little expensive to take a family out here. So when the opportunity came up to come afterwards, yeah, that was in the back of our mind."

Others, such as Katherine Rollin, say the Olympics had no impact on their decision to visit Utah. "No, we've been here before and we just enjoy the skiing here. It's family friendly."

While the ski industry certainly has benefited from the Olympics, the impact on the rest of the economy is less clear. The Gateway shopping mall, which opened in conjunction with the Olympics, continues to thrive but the traditional shopping district on Main Street has suffered.

Much of the $100 million given to the community by Olympic organizers is being used to maintain facilities such as the speed skating rink and ski jump platforms. These venues were built for the Olympics and do not at present have broad commercial appeal. And some significant Olympic costs provided by the federal government, such as security during the games and improving the roads to the venues, are not included in the rosy assessments provided by Olympic boosters.

Kenneth Bullock ,director of the Utah League of Cities and Towns, says despite the stated Olympic principals of fairness and sportsmanship, the International Olympic Committee, or IOC, and its sponsors are there to make money for themselves and not for the community at large.

"What really happens is it's a business and the IOC and the television rights and the sponsors are there to promote their products. For us to think that people are not going to benefit this monetarily is a little naïve on our part."

Over the long-term the Olympic economic legacy may be minimal. At the University of Utah, economist James Wood contrasts the economic impact of the Olympics with having a major company, like Intel, relocate to the region.

"If Intel comes here, it was 6,000 employees is what they were planning, that changes a growth pattern. They're here permanently. They bring other companies in. The Olympics is a short burst. You get some infrastructure, which is great but there is no long-term impact and for the typical family it doesn't mean much."

Mr. Wood says despite all the plans and promises an event even as prestigious as the Olympics, lasts only 17 days, and then fades into memory.