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The clock is already ticking down to what should prove the most spectacular event of the summer. In less than two week’s time, the Paris Olympics will open. According to the plan, as well as a sporting festival, it should hugely boost tourism, revive the city, draw investment and kick-start a French economy that is badly in need of a boost.
There is just one catch. It isn’t happening.
In reality, the economic case for staging the Olympics has always been shaky. Even so, Paris is turning into a catastrophic financial flop, with tourists avoiding the city and travel slumping. It is about to kill the Olympic juggernaut stone dead – and make the case for a far simpler, permanent home.
The Olympics has always been sold as an expensive, and yet ultimately worthwhile investment. True, it might cost a few billion to build all the stadia and facilities and lay on the extra security required to stage all the events. But that would pay for itself many times over, with the games bringing lots of extra tourists into the host city, raising its profile and triggering a wave of renewal and investment. In the case of Paris, the argument was always uncertain.
After all, the French capital was not exactly short of tourists to start with; with 44 million visitors a year, it was already the most visited city in the world. And it was always hard to understand why Paris needed to raise its profile; it is probably safe to say that most people have heard of it already.
Still, President Macron, at least back in the day when he had more power than he does now, waved all that aside and pushed on with bringing the Olympic jamboree to the country’s capital. The €7.5bn (£6.3bn) required to stage the games was made available.
Sure, the sport will be spectacular. I have tickets for the athletics, and I am looking forward to that. But as the opening ceremony draws closer, there are worrying signs that the event is turning into a financial failure.
Air France reported earlier this month that it expected to report a loss of €180m in the current quarter. Why? Because lots of flyers are avoiding the city, expecting it to be far more crowded than usual.
That is a double blow for the French government since it owns 29pc of the airline, and its shares are down by 40pc this year (unlike British Airways owner IAG, up by 12pc since January). Other airlines are also suffering, with America’s Delta only this week announcing a $100m (£77m) hit on weaker bookings to Paris.
Likewise, hotel bookings are disappointing. There are some peak days around the opening ceremony, but over the entire Olympics period occupancy is now below the 81.4pc level the city saw in July 2023, according to a report from Insee, France’s official statistics agency. Prices are steadily falling as well, with the expectations of the sky-high cost of a room fading as the event approaches, and rates steadily falling to fill empty ones. In plain language, Paris’s hotels are having a worse summer than usual.
Even the sponsorship to capitalise on the global television audience has hardly been a huge success. The organising committee has said it will meet its $1.2bn target from major corporations. But it had to be helped out at the last minute by the billionaire Bernard Arnault, with his LVMH empire stepping in with €150m of promotion, prompting some accusations that this will be the first “luxury games”.
It is hardly cynical to imagine that Arnault, who is very closely connected to President Macron, felt duty-bound to help out and opened his chequebook to make sure the Games did not crash. But it is hardly a great advert for the power of associating a business with the Olympics.
Meanwhile, the city may well not even be ready, with the Seine still too polluted for events planned on the river, and, with grim inevitability, French public sector workers already threatening strikes if they are not offered some extra money. Add it all up, and it is not looking good.
Sure, there are still official estimates of a positive economic impact, once the long-term results of regeneration are taken into account. But we have all learned to take those kinds of forecasts with a generous grain of salt.
Judging by the experience of other cities, many of those supposed benefits never materialise and the host is stuck with a series of expensive developments that no one can find a use for. To take just one example, the London Stadium, constructed for the 2012 games, makes a decent ground for West Ham, but it is hard to understand why taxpayer’s cash was needed to build it.
In reality, the Olympics needs a radical rethink. It is a great spectacle of sport, and a test of the limits of human endurance, and achievement. It should be an inspiring spectacle that the whole world can unite around. But the travelling jamboree of staging the event in a different city every four years is becoming more and more untenable, with the cost rising all the time, and with visitors and sponsors becoming more and more wary of the way that congestion and security will make it too difficult to travel to any of the events.
There has already been a growing campaign for many years for the Olympics to have a permanent home, with Greece the most obvious location. The athletes, spectators and TV crews could descend on the site every four years, and it could be used for training for the rest of the time.
It would be far cheaper, far easier to organise, and far less open to corruption and extravagance. After the financial flop that Paris is fast turning into, that should surely be self-evident to everyone – all that needs to happen is for all the competing countries to agree on a location.
The Paris Olympics is turning into a catastrophic financial flop
The economic case for holding the Games in a new location every four years is broken