Barcelona road to Segrada Familia
The wide-open road to Segrada Familia in Barcelona.

In my view, the streets in Barcelona are not suffocating with traffic. I was only in Barcelona for a few days in April, but the roads in the business districts are amazingly wide, and we were never slowed in our travels. When I walked the narrow paths of Gracia, a cozy neighborhood in the middle of Barcelona, I never felt squeezed by cars. I lived in Bangkok for 11 years. I know what bad traffic looks like.

But of course it is all relative. While Barcelona is no where near as hot, congested or polluted as Bangkok, for citizens of Barcelona, conditions are not as good as they should be. According to this VOX article by David Roberts of the University of Pennsylvania, Barcelona is the fourth-most population-dense city in Europe, is well under the World Health Organization’s recommendation for 9 square meters of green space per resident at 2.7 square meters, suffers from urban heat island effect at 3 to 8 degrees Celsius warmer than the region around it, and is considered one of the noisiest in the world.

One of the reasons for this poorer quality of life is due to decades of negligence by former totalitarian leader, Francisco Franco,  After the generalissimo passed away in 1975, development in Barcelona began again, peaking with financing sparked by the Olympics, which may be another reason for the state of Barcelona today.

According to Samuel Rosenthal and his article, Olympic Cities and the Legacy of Infrastructure: Barcelona 1992 and Athens 2004, the planners for Barcelona were essentially taking advantage of global trends, including the desire for large cities to invest in urban renewal, and to also brand Barcelona as an exciting destination for tourists and global financing. In fact, Rosenthal explained that planners shifted attention from “publicly planned, small-scale infrastructural improvements to larger schemes funded by private investors.”

This is not unique to Barcelona. The organizers leveraged the Olympics to realize long-held plans for the development of Barcelona as would any other city. But as I wrote previously, these Games were so successful economically that it is often held up as the gold standard for an organization of an Olympiad, cited as The Barcelona Model. But one can argue that the Olympics triggered inflows of private capital that brought both benefits and detriments to Barcelona, as Rosenthal explains.

…this largely positive appraisal of the Barcelona Olympics belies the negative consequences of its planning strategy that have become evident in succeeding years. The regeneration of the waterfront, while touted as a positive outcome of the Games, has increased housing prices across the city, forcing many longtime residents to leave. Additionally, following the Barcelona Games, inflation in the city increased and unemployment rose. And on a larger scale the city branding approaches used for the Barcelona Olympics have increasingly placed control of the city in the hands of private agents. Generally, post-Olympic city planning in Barcelona has become less focused on the improvement of the lives of the city’s residents, and more attuned to strategies that seek to maximize the attraction of capital.

Part of the woes of urbanization and increased emphasis on development is a diminished prioritization of the working class. Economist Andrew Zimbalist, author of the fascinating book, Circus Maximus – The Economic Gamble Behind Hosting the Olympics and the World Cup, quoted Josep Maria Montaner, an architectural critic, in explaining how old housing and factories, landmarks of a different age, were demolished, and new development lacked any environmental or sustainability standards. Zimbalist then went on to explain how inflows of private capital led to gentrification.

Barcelona’s new urban zones were redeveloped with improved public services and, in some cases, direct access to the sea. These parts of the city became gentrified, and hand in hand with gentrification came higher prices. Higher prices meant that lower-income people had to relocate, and, more generally, plans for public housing were underfulfilled. One study noted the following impacts:

  • Strong increases in the prices of housing for rent and for sale (from 1986 to 1993 the cumulative increase was 139% for home sale prices and nearly 145% in home rentals)
  • A drastic decrease in the availability of public housing (from 1986 to 1992 there was a cumulative decrease of 5.9%)
  • A gradual decrease in the availability of private houses for rent (from 1981 to 1991 the cumulative decrease was 23.7%)11 Thus, like the experience with mega-events elsewhere, hosting the games in Barcelona was accompanied by a redistribution of living standards to the detriment of lower-income groups.

One can argue that the decrease in supply is being driven by a Silicon Valley start up called Airbnb, which is highly popular in Spain. For those who don’t know, Airbnb is a service that connects you with people who are offering accommodations in their own properties. The original premise of Airbnb was that you could rent out a person’s room, and you could spend time with the owner. Today, people and companies run businesses renting out apartments and houses to people who are looking for alternatives to hotels.

Airbnb

I spent a week in Madrid and Barcelona in April. In Madrid, I stayed in a room the owner lived in. He was out of town, but a guest occupied another room. It was a great experience as we got along well with the other occupant. In contrast, our Airbnb accommodation in Barcelona was owned by a couple who managed three properties, none of which they lived in. Overall, both experiences were great for us. But while Airbnb is a boon for tourists, it is to the detriment of local residents, as explained in this New Yorker article.

Nearly half the Airbnb properties in Barcelona are entire houses or apartments. The conceit of friendly locals renting out spare rooms has been supplanted by a more mercenary model, in which centuries-old apartment buildings are hollowed out with ersatz hotel rooms. Many properties have been bought specifically as short-term-rental investments, managed by agencies that have dozens of such properties. Especially in coveted areas, Airbnb can drive up rents, as longtime residents sell their apartments to people eager to use them as profit engines.

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It was early 1987 and Freddie Mercury was finally meeting one of his heroes – the great Spanish soprano, Montserrat Caballé.

As described in El Pais, they met at the Hotel Ritz in Barcelona. Mercury sat down and began to improve his song, “Exercises in Free Love“, singing in a falsetto a part he hoped Caballe would be willing to perform for him.

Caballé liked that Mercury, contrary to appearances, sold his voice instead of his image. “When he sat down at the piano to improvise, I realized that a true musician was before me,” she said. He made such a good impression that she agreed to meet him again at his house in London to record a demo.

Thus began a creative collaboration that resulted in an album called “Barcelona”, with three tracks sung by Mercury and Caballe, including the title track “Barcelona”. When the song came out in 1987, it hit #8 in the UK Singles Chart, peaking at #2 after Mercury passed away in 1991.

In the run-up to the 1992 Summer Olympics, Mercury was priming the world for the PR explosion to come for Barcelona, a city of sun and fun that was gearing up for its global coming-out party. Today, Barcelona is one of the most popular destinations in a country that is the third most visited in the world. And while city after city reject initiatives to bring the Olympics to their neighborhood, the 1992 Barcelona Olympics is often held up as one of the most successful Olympics ever.

In fact, The Royal Institute of British Architects awarded their 1999 medal to the city of Barcelona for its “ambitious yet pragmatic urban strategy and the highest design standards…(which) transformed the city’s public realm, immensely expanded its amenities and regenerated its economy, providing pride in its inhabitants and delight in its visitors.”

Barcelona Olympic Village 2
The site of the former Olympic Village of the 1992 Barcelona Olympics, in Poblenou. Photo taken by author.

Starved of investment by Spain’s autocratic leader, Francisco Franco, Barcelona was a congested and polluted city by the sea, whose aging manufacturing infrastructure crumbled during the poor economy of the 1970s and physically blocked the city’s denizens passage to the nearby Mediterranean Sea. Thanks to city plans accelerated by the requirements for the  Olympics, investments into Barcelona’s transportation and communications infrastructure were made. According to Samuel Rosenthal and his article, “Olympic Cities and the Legacy of Infrastructure: Barcelona 1992 and Athens 2004,”

Barcelona renovated an existing stadium and created four Olympic areas with 4,500 apartments and 5,000 hotel rooms. In terms of infrastructure outside the immediate realm of the Games, the city constructed a new Ring Road to connect venues, two communication towers, new cultural centers and museums, expansions to the airport and the metro system, and five kilometers of new beaches.

IMG_0212
The section of ring road that passes by the foot of Mount Tibidabo in Barcelona. Photo taken by the author.

As so few examples of economically successful Olympics exist, this example from 1992 is often called “The Barcelona Model” – in general, a scenario where a city and a country are able to leverage the Olympic brand to accelerate existing plans to develop the host city’s physical and service infrastructure. Or as economist Andrew Zimbalist describes, “Barcelona used the Olympics; the Olympics didn’t use Barcelona.”

Zimbalist explains that there were four factors for Barcelona’s success. (The headings are my words.)

  1. Barcelona cool: In his book, Circus Maximus, Zimbalist described Barcelona in the early 1980s as “a hidden jewel. Its location, climate, architecture, and history meant that the city had a tremendous potential for tourism and business that had been unexploited for decades.” In fact, Zimbalist cited stars like Freddie Mercury who would visit the Catalonian center for its cool factor, and who added to the city’s secret cache. Barcelona was quietly becoming a popular destination for tourism and conventions. As Zimbalist wrote, “with a new airport terminal and forty new hotels in the city, the number of passengers at Barcelona’s airport almost doubled, from 5.46 million in 1985 to 10.04 million in 1992. Barcelona’s ranking as a tourist and business meeting destination among European cities improved from eleventh in 1990 to fourth in 2009.”
  2. Improving economy:  Zimbalist wrote that business was so good in Barcelona that unemployment dropped from 18.4% to 9.6% between the period of November, 1986 to July, 1992. Annual GDP growth was stuck under 1% for well over a decade from 1974 to 1985, which means that large infrastructure projects were few and far between. So when the Olympics rolled around, “the Barcelona economy was ready to receive and benefit from stimulus spending.” Unfortunately for Brazil and Greece, the opposite happened when their Olympics rolled around.
  3. EU Membership: In 1986, Spain joined the European Economic Community (today called the European Union), which gave Spain access to broader opportunities in finance, trade and tourism across Europe.
  4. The Olympics as Part of the Grander Plan: The most important reason that the Barcelona Olympics did not result in the hideous white elephants that we have seen recently in Sochi and Athens, among many others, is that “the Olympics were made to work for the plan. The plan was not created posthaste to work for the Olympics.” Most of the $11.5 billion budget 2000 dollars) was from private sources. Public funds were 40% of the entire budget, and most of the public spend were in projects already part of city plans that had existed for decades.

Part of grand plan of the city planners was to focus on four peripheral areas of Barcelona where investments for the Olympics would spur continued economic use. As Rosenthal explained,  “It was also important that any infrastructure built specifically for the Games had a clear post-Olympic use,” so the planners chose four areas in the peripheries of the city where investment was needed: Montjuïc, Diagonal, Vall d’Hebron, and Poblenou.

The most dramatic and most praised of the changes took place in Poblenou, the eastern seaside part of Barcelona that was opened to the sea, and boasted two gleaming towers that initially housed the athletes as a central part of the Olympic Village, and then went on to become residences for the citizens of Barcelona.  As Rosenthal wrote, “Newspapers lauded the ‘gleaming new Olympic village and beachfront’ which had replaced the ‘grimy industrial area that had blocked access to the sea for decades.'”

In 1992, Spaniards saw the Olympics as a symbol of progress and global integration. But it was also a chance to show off Barcelona cool, and help make the Capital of Catalonia a must-see destination. And nothing symbolized that more than the memorable cauldron lighting of the 1992 Barcelona Olympics.

IMG_1757
The Olympic cauldron of the Estadi Olímpic Lluís Companys in Montjuïc, Barcelona. Photo taken by author.

At the end of the opening ceremony, held in the refurbished Estadi Olímpic Lluís Companys in the newly improved Montjuïc area, archer Antonio Rebollo pulled back on the arrow, feeling the tension in the bow, and the heat of the flame that flickered in the wind from his arrow’s tip. Rebollo could barely see the reflection of the silver cauldron beyond the wall of the stadium, but once he was oriented and certain of his angle, he released the bow string sending the flaming arrow into the summer night. The arrow travelled 230 feet up into the air and over the cauldron, setting the fumes alight.

They call it one of the greatest Olympic torch lightings ever, for what is also called one of the greatest Olympics ever.

Tokyo Big Site in Odaiba
Tokyo Big Site in Odaiba

There were fears at one stage that costs of the Tokyo2020 Olympics would balloon to some USD30 billion, which would approach the USD40 billion that was spent on the 2008 Beijing Olympics.

While it is unlikely that cost estimates will drop to the initial budget of USD7.5 billion, the amount presented to the selection commission of the IOC at the bid presentation, the IOC and the organizers of Tokyo2020 are hoping to get the costs below USD 15 billion.

Currently, costs estimates for Tokyo2020 are JPY1.8 trillion or nearly USD16 billion. But there are always hidden costs, or at least costs not spoken about openly, like cost overruns. In this March 2017 article, The Japan Times cites Asahi Shimbun, which reported that “the original bid estimate for constructing new Olympic venues was ¥499 billion and that is now ¥680 billion. Transportation costs have increased from ¥23.3 billion to ¥140 billion, security from ¥20.5 billion to ¥160 billion and ‘software’ expenses from ¥257 billion to ¥520 billion.”

Currently, organizers intend to host the media and broadcasting center for the 2020 Tokyo Olympics at Tokyo Big Sight, which is a large convention center in the Odaiba waterfront district. To accommodate the Olympics, plans include closing off the convention center to all trade shows from April 2019 to November 2020. In a January, 2017 article, The Japan Times cites The Japan Exhibition Association, which claims that the shut down could translate to more than ¥1 trillion in lost sales and affect 1,000 companies associated with the exhibition industry, including booth decorators and logistics firms, if exhibitions are canceled or downsized.

It’s a “matter of life and death,” said Masato Suzuki, deputy general manager of Tokyo-based manufacturer Sanko Tsusho Co. Ltd.’s inspection equipment department. “We small and midsize firms don’t want the Olympics if it means canceling or scaling down exhibitions. It’s by far our most important business opportunity,” he said, adding that about 70 percent of his company’s sales are generated by clients established at the exhibitions.

In a May, 2017 article in Japan Today, it was reported that the city government may be losing a fight to get the national and regional governments to pick up part of the costs of refurbishing sports venues or building temporary sports venues in locales outside Tokyo. As an example of possible costs unanticipated by the organizers in Tokyo, the governor of Kanagawa is looking to add to the bill. Enoshima, the intended venue for sailing events, is a part of Kanagawa prefecture. Governor Yuji Kuroiwa believes his prefecture will have to compensate fishermen who will be prevented from fishing during the Olympic Games, and thus will lose revenue.

Very often, organizers cite the increase in tourism revenues for a city and country hosting the Olympics. But that argument is countered by economist, Andrew Zimbalist, in his book, Circus Maximus – The Economic Gamble Behind Hosting the Olympics and the World Cup. He explained in his book that at big tent events like the Olympics or the World Cup, tourism actually falls.

Still another problem is that when a foreign soccer fan spends $100 at a Brazilian restaurant during the World Cup competition, it might not be a net gain for the Brazilian economy. This is because between June 12 and July 13, 2014, there may have been tens or hundreds of thousands of people (tourists or businesspeople) who would otherwise have traveled to Brazil but instead chose to avoid the congestion, tight security, and high prices during the World Cup and either went elsewhere or stayed home.

This plays out in real life: tourism in Beijing fell during the 2008 Summer Games, as it did in London during the 2012 Olympics. That is, even counting the athletes, the media, the administrators, and the Olympic tourists, the total number of visitors to these cities fell during the month of the Olympic Games. Further, some local residents may have the same impulse that foreigners have: they believe their city or country will be excessively crowded and expensive during the mega-event and that the period of the competition would be a good time to take a vacation outside the country. The amount of outbound tourism from China grew by 12 percent in 2008, the year China hosted the Summer Olympics.

Will the pride that comes with hosting a successful Olympics, and the legacy infrastructure of the 2020 Tokyo Olympics outweigh the hidden costs of running the biggest show on earth? That’s the debate that’s taking place as we head towards September 13 and the IOC meeting in Lima, Peru, when IOC members gather to decide on the fates of Paris and Los Angeles.

The Olympic Games – pomp and circumstance, tense competition, tears of sadness and joy on display globally – after years of build up, come to an end after two weeks of sound and fury. Then often comes the praise from all corners of the world, the follow-up stories, the speech circuit, the documentaries, and finally, one realizes that one hasn’t uttered the word “Olympics” for quite a while. Until, the grumbling begins.

Almost inevitably, there is a backlash of some sort, people criticizing the expense of the Olympic Games, the lack of promised economic impact on local commerce, and the use of tax money for expensive athletic facilities that very quickly begin to rot from lack of use and maintenance. See this blog post for images of Olympic boondoggles.

A few weeks ago, a German broadcaster released this documentary called “Die andere Seite von Olympia”, or “The Other Side of the Olympics”. This piece by Marlene Wynants is a series of interviews of Londoners who feel the London Games did not deliver on its promises. Here are some of the opening quotes from the documentary:

  • The expectations of restaurants, bars, theaters, that we would have a bumper summer.
  • Why should we stand aside for the elite sportsmen when we were the grassroots of the national game.
  • In the beginning, when they were trying to get everyone behind them, they promised the earth.
  • They created the hype, and they are the ones making the money, not the ordinary people.
  • Ultimately the costs are borne by the host city, the host national government, and the IOC isn’t liable for any of them.
  • There are a lot of people getting fed up with the Olympics, the impact that it has, and the lies that are told. And London is a prime example of lying from beginning to end.

And as explained in this article from The Guardian, government funding for sports will no longer be prioritized. Only a few years after the London Games in 2012, the budget for grassroot sports will be cut as much as 40% over the next five years.

I love the Olympic Games. But there is little doubt that the financial burden on country and city governments, as well as on the citizens and

sakura fujiyama,tokyo

In 1964, Japanese officials expected 130,000 foreigners to visit during the Olympics, so they encouraged proprieters to get ready for the world to flock across the seas, not only to Tokyo, but to the beautiful vistas around Tokyo and beyond.

But alas, government projections proved to be overly optimistic as only 70,000 tourists were estimated to arrive that October. Millions of dollars were spent to accommodate more people and make the experience for non-Japanese tourists a good one in popular resorts like Atami and Hakone, but facilities never got close to capacity.

Kyoto hoteliers turned down reservations by Japanese wanting to see the old capitol in all its beauty during the refreshing Autumn season in anticipation of the busloads and trainloads of foreigners instead saw occupancy rates plummet, when instead they should have been near capacity.

When a country holds the Olympics, there is a promise that the tourists will come and the money will flow for hotels and restaurants. It is a promise that goes unchallenged, and proven time and time again to be baseless.

circus maximusEconomist Andrew Zimbalist explains in his fascinating book, Circus Maximus – The Economic Gamble Behind Hosting the Olympics and the World Cup,  that a country which hosts the Olympics may very well be welcoming a large number of foreign visitors (athletes, coaches, judges, media, family members, etc.), anywhere from 10 to 25,000 related to the Olympics. But rarely have there been instances where the number of tourists actually increase. Very often, it is the opposite – tourism decreases, sometimes significantly.

Zimbalist cited China, which dropped 6.8% in foreign visitors from 26.1 million in 2007 to 24.3 million in 2008 when the Olympics were hosted in Beijing. London experienced a year on year drop of 6.1% in overseas visitors from July and August 2011 to July August 2012, when the Summer Games were held there. Athens expected 105,000 foreign tourists per night during their Olympic Games in 2004, but in actually hosted only 14,000 per night.

Zimbalist does write that Sydney’s number did increase modestly from 2.5 million in 1999 to 2.7 million in 2000 when the Games were held in Australia, but that was more than a quarter less than projected, resulting in low occupancy rates on top of expansion hotel expansion in anticipation of higher numbers – just like in Tokyo in 1964.

So what’s happening?

A dynamic that is not understood is that Olympic traffic is not adding to overall numbers – it is merely replacing traffic that would have come. And yes,