Economic Impact on the State of Georgia of Hosting the 1996 Olympic Games

Article excerpt

By 1997, spending by the Atlanta Committee for the Olympic Games is projected to have generated $2.6 billion of economic activity in Georgia, and spending by out-of-state visitors will have injected another $2.5 billion into the economy.

The Centennial Olympic Games will be hosted by Atlanta, Georgia, July 19 through August 4, 1996. These are the last Games of this millennium and probably the last Summer Olympic Games to be held on U.S. soil for a generation. They are the first to be held in the South and the largest in history. Atlanta will be the host for more athletes from more countries participating in more sports ever in the history of the Olympic Games. The Atlanta Committee for the Olympic Games (ACOG), a private nonprofit corporation created in January 1991, has been planning for and will stage this spectacular 17-day event starting July 19, 1996. This article describes the economic impact of hosting the 1996 Olympic Games on the State of Georgia, with specific emphasis on the metropolitan Atlanta area.

Beginning with one man's dream, the concept of Atlanta hosting the Olympic Games has been met with mixed emotions. From the bid period, it has been critical to ensure that the community understood the overall economic benefit of the Games in order to 1) justify the human, financial, and physical resources required to stage the Games; 2) justify the disruption in the summer of 1996 to the community; 3) demonstrate the governmental benefit of the Games, proving to the taxpayers of Georgia the value of hosting the Olympics as quid pro quo for any potential state and local operational support; and 4) understand the long-term economic impact of the Games by industry in order to capitalize on the associated economic growth.

Economic impact studies, which estimated quantitatively the economic impact to the State of Georgia which would flow from hosting the 1996 Games for the 1991 to 1997 time period, were conducted in 1990, 1992, and 1995. The first study was completed at the same time that the Atlanta bid was submitted. The 1992 study incorporated ACOG's first detailed budget and visitation estimates based on the preliminary event schedule. In addition to Games-time visitation spending, it also included pre- and post-Games visitation spending, which accounted for over one-third of total projected visitation spending. The 1995 update incorporated the most current financial forecast and, for the first time, identified long-term impacts or "legacies" from hosting the Games.

Overall Economic Impact

Based on the 1995 study, the total economic benefit on Georgia's economy of hosting the 1996 Summer Olympic Games is estimated to be $5.1 billion during the 1991-1997 period. The economic impact has been and will continue to be the result of spending by ACOG as well as spending by visitors to the region. By 1997, ACOG's spending will have generated some $2.6 billion of economic activity, while the spending by out-of-state visitors will have created an additional impact of $2.5 billion.

The initial injections of new dollars has occurred primarily in and around Atlanta, Athens, Savannah, and, to a lesser extent, the Columbus and Gainesville areas; however, the respending of these dollars, or the induced economic impact, has had effects that have been felt in even the smallest Georgia communities. This economic phenomenon, known as the multiplier effect, recognizes that new dollars to the economy subsequently will be spent in successive rounds within Georgia. The induced impact of the Games was derived from the initial impact of the Games multiplied by a factor developed by the U.S. Department of Commerce's Regional Input-Output Modeling System.

[TABULAR DATA FOR EXHIBIT 1 OMITTED]

Exhibit 2
ECONOMIC AND JOB IMPACT OF OLYMPICS

Economic Impact by Industry (in millions)

Lodging and amusements       $677.7
Business services             610.2
Eating and drinking           412. …