Why Tokyo 2020 Can Be More Financially Successful Than Previous Games

©Wall Street Survivor

There are often debates as to what the actual economic benefits of hosting an Olympic Games are. The answer can often seem quite ambiguous, as it is often said the games value encompasses more than simply money. While this is certainly true, with Japan knowing more than others the positives of hosting an Olympics, the financial situations of the games cant be merely overlooked. Recent games such as the 2016 Rio Summer Games and the 2004 Athens Summer Games are proof this. If things are mismanaged and everything isn’t accounted for, the economical effects of hosting large scale events such as the Olympics can be felt throughout a country. However, positivity remains strong throughout the general public that Tokyo 2020 can harbor much more economic gains than previous games. Lets take a look at just some of the factors that can help these games be more financially successful than games of the past.

The 1964 Tokyo Games & Tokyo 2020: Round Two

This upcoming Summer Olympic and Paralympic Games is not the first go round for the Japanese government when it comes to organizing the summer games. Tokyo hosted them back in 1964, and at that time it was the most expensive Olympic Games to date, with a budget of roughly 2 billion USD. Despite the huge financial burden it placed on Japan, it is easy to see the benefits far outweighed the negatives. This is because the 1964 Tokyo Games were not about simply making money, but rather to change the stigmatism and help create a new global identity for the country.

Courtesy of NBCSports.com

Tokyo 2020 is quite different as the objective is less about changing negative feelings fostered towards Japan, as they aren’t so prevalent nowadays. So this games determination of success will be measure more about the financial aspects than its predecessor. When analyzing whether this hope for a prosperous games has some basis, it is easy to see the source of optimism felt by many. This previous experience hosting the world’s largest sporting event is extremely valuable to the planning committee, who can draw upon their predecessors knowledge to avoid problems.

Pre-Existing Infrastructure

Pre-existing infrastructure is the obvious factor that is always cited as one of the most important determinants as to whether an Olympic Games will be economically successful or not. Sometimes the country’s organizing committee starts from scratch, having to build a ton of facilities and temporary transportation supplements. All of these are of course necessary to allow the smooth operation of the games, however they can often result in the likely hood of gaining money to be squandered early on.

Yayogi Arena, a remaining venue from the previous 1964 Summer Games. ©ShotaroHondaMoore

Luckily for Tokyo, there are already a large amount of facilities and systems in place to accommodate a large sum of people. This is the natural result of having 38 million people reside in the city’s greater area. The train system and subway systems are already extensively developed, with the ability to be built upon further. This coupled with an influx of taxis flooding into the city from other metropolitan areas and possibly buses; renovating transportation in the city shouldn’t be an overbearing cost on the Japanese government.

©Tokyo2020

The other thing the city has going for it, are the venues that were built for the 1964 Games and in the following decades. There are 11 venues that will be used in Tokyo 2020 that weren't built specifically for the games. These event venues have been named the “Heritage Zone”, and include Yoyogi Stadium, The Tokyo Metropolitan Gymnasium, and The Japanese Budokan. This doesn’t also factor in the many venues that are supplied by multiple domestic professional sports leagues throughout Japan, most notable is the J.League’s facilities. They will utilize the stadiums that house the top professional soccer teams in Japan, to host a variety of events at the games. These stadiums span from Sapporo to Yokohama. Opposed to having to build all of the necessary infrastructure, in many ways Tokyo can simply build on it’s already pre-existing facilities.

Close Proximity To China And Large Populations

Courtesy of jpninfo.com

Last year Japan saw a record breaking amount of tourists with roughly 32 million, a quarter of which were reportedly from China. The sheer proximity of Japan to the world’s most populated country, and with the relatively cheap flight costs between the two, allows for the bustling Chinese middle class to make the trip over to support their national team. While yes it may be true that China will host the upcoming 2022 Winter Olympic Games, it is undeniable the popularity of the summer games tends to exceed it’s winter counterpart. It should also be taken into account the amount of Korean, Taiwanese and South East Asian visitors, who will likely make the trip.

An issue that the previous 2016 Summer Games in Rio may have encountered was the relative inaccessibility it had from a large portion of the world’s population. The population of The Americas is generally estimated to be around 1 billion, less than that of the single entity of China. We need to also compare the flight times from India, boasting the worlds second largest population with 1.3 billion. To Japan it takes roughly 8 hours to fly directly from India, while to get to Brazil it can take up to twice as long. There is already a relatively large amount of Indian nationals living in Japan, and thus it may foster a positive image in the population back in India. With an Indian community already in place, it may be more enticing for family members back home to come make a visit during Tokyo 2020. One could try to argue that a large portion of these countries’ population live impoverished lives and have no means to actual make the trip, but its also important to note that both countries’ have a middle class that is roughly the size of The United States.

Most Private Sectors Support and Sponsors Ever

©eneos.asia

Now this is somewhat of a difficult point to decipher the actual effect on determining if the games will be profitable. However due the fact that this money is not directly taken from taxpayers, where other things like pension are a bigger concern, it needs to be noted as a benefit to the general public when compared to prior games. While this may not mean the businesses of Japan will be able to return the sheer capital they have invested, it does mean the common citizen isn’t shouldering so much of the burden financially.

Yes there are often many Olympic sponsors that play vital roles in helping the games in a variety of aspects like media, marketing, etc. However, the actual amount of pure funds that is poured into the games isn't all that much in the grand scheme of things. For most games, amassing 1 billion in domestic sponsorships is seen as a success. The Tokyo 2020 Games however have set a record by more than tripling the amount set by any previous games with over 3 billion USD.

Ticket Demand, Price, and The Sheer Amount of Available Tickets

While it is no secret that some Olympic Games have struggled to sell their tickets and thus end up in some instances giving them away for free, such a case doesn’t seem likely for Japan. There has already been two lottery events, where Japanese nationals were allowed to enter their name into a randomized algorithm that would select lucky individuals.

Following the first lottery draw in July, the results showed that already 3.2 million tickets were sold, with less than 10% of the available tickets remaining unsold. This doesn’t include the fact in August, a secondary lottery was open to the public and that international sales have yet to open. In total there are roughly 7 million tickets available, with many indicators pointing to upwards of 6 million being sold. Compare this to Rio 2016 which only sold 4.8 million mere days before the opening of the Olympics.

This high demand also makes these ticket prices higher than those of previous games, however they roughly fall in line with those of London 2012. The ticket prices range from about 20USD to over 1700 USD, which would make the premier tickets more expensive than any at the 2012 games. Half the tickets are still reasonably priced with the majority being available for roughly 75 USD.

Use of the Facilities After The Olympics

One issue that always seems to plague the countries who host the Olympics, is what to do with the facilities after the games are finished. This is a major concern for many of the taxpayers in Japan. This final point is related to the a previous point made in this article, raising the question, are the facilities worth it in the long term?

Tokyo Tatsumi International Swimming Center. ©ShotaroHondaMoore

We can see the remains of many previous Olympic facilities somewhat rotting away with little use. The 2004 Athens Summer Games comes to mind. It is reported that out of the 22 venues constructed, only 1 is currently still in use. However, other countries have been able to better utilize the newly built structures, such as London. The venues are in seemingly in constant use for events and have helped make the area more trendy.

Luckily there are some plans to be implemented post Tokyo 2020. These seem to fall in line with that of the U.K. If we look at the “Legacy Venues” left from 1964, we can see what kind of plan they will have moving forward, but hopefully on a much more long drawn out plan. The Tokyo Metropolitan Gymnasium and Yoyogi Arena have hosted things from international sporting events, to pop concerts, to even much smaller local hobby events. Some facilities are used for everyday use by the general public. Tokyo Tatsumi International Swimming Center, is constantly open for public use, from children's lessons to free swim sessions. If they are able to effectively make these venues points of emphasis in their communities, then long term benefits can be reaped.

It will be interesting to see, just how all of this eventually plays out. Hosting such massive events can be unpredictable with many unforeseen factors coming into play. It will be incredibly important for the Tokyo 2020 Organizing Committee and the Japanese government to be on the same page to fully utilize all the positive factors these upcoming Summer Games could provide.

If you would like to reach me, you can message me at Shotarohmoore@hotmail.com

A writer living in Japan. Creating articles about the 2020 Tokyo Games. A regular contributor to Junkture Magazine. https://www.junkturemagazine.com

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