Will hosting the 2034 Olympic Games really put $6.6B into Utah’s economy?

Hosting the Games would have “significant positive economic and fiscal impacts for the state,” the report says.

When the book closes on the 2034 Winter Olympics — assuming the International Olympic Committee flings it open as expected on July 24 with a vote naming Utah the host — the event will have added $6.6 billion and 42,000 “job years” to the state’s economy.

So says the Kem C. Gardner Institute, which on Wednesday revealed the results of its analysis of the economic and fiscal impacts of hosting the 2034 Games. The institute found that despite an anticipated drop in skier visitation during the five weeks of Olympic and Paralympic competition, hosting the Games would have “significant positive economic and fiscal impacts for the state.”

According to the Kem C. Gardner Institute, the state can expect to see a return of $2.6 billion in Games-related expenditures over the decade-long runup. And that can be extrapolated out to $6.6 billion in total economic impact, which includes $3.9 billion in state gross domestic product and $2.5 billion in personal income gains.

“It is interesting to see, especially that big spike in the year of the Games,” said John Downen, a senior research fellow for the institute. “But again, it is temporary, because it is a one-time event. Whereas something like the Legacy Foundation is more of an ongoing operation that has a persistent effect.”

Unusually for an Olympics, the 2002 Games finished with a $163 million surplus. Some $76 million of that went toward creating the Utah Olympic Legacy Foundation, which is charged with programming and upkeep at Utah’s Olympic venues.

The 2002 Games cost $4.3 billion in total spending, including $2.2 billion in the construction of structures like the Utah Olympic Oval and Utah Olympic Park. They returned $7.5 billion in total economic impact (in 2023 dollars), according to the institute. Bid organizers estimate the 2034 Olympics will cost $4.1 billion to put on, which includes $2.8 billion in “operating costs” and just $31 million in capital investments.

“We talk about construction and we’re happy we don’t have to spend as much as in ’02,” Brett Hopkins, the bid committee’s CFO, said Wednesday during the institute’s unveiling of its analysis. “Only to find out how it brings down the output in your calculations.

He joked, “We’re going to have to find a way to build more.”

That discrepancy aside, economic impact reports tend to be exceedingly optimistic, and economist Victor Matheson said this one is no different.

Matheson, a professor of sports economics at the College of the Holy Cross in Massachusetts, has written several published papers on the economics of the Olympics. He said he found some flaws with the Gardner report’s estimations, but he also found places where it cast the impact of the Games in a more realistic light than its 2002 counterpart.

“The problem with economic impact reports is they often do a lot of adding and multiplying, and they’re very bad at doing the subtracting,” he said. Still, “This one does some subtracting. And it’s some subtraction that had to be done.”

For example, Matheson applauded the report for recognizing that skier visits will likely drop in 2034 — something he said he didn’t think occurred to those creating the 2002 reports. The report notes that skier visitation declined by 5-9% at Utah resorts the last time the state hosted the Winter Games.

“This displacement could be mitigated in 2034,” the report suggests, “with planning, advanced marketing, and packaging of skiing with Olympic visits.”

When it comes to the job impact, Matheson gives the report considerably less credence.

He and two colleagues studied the actual effect the 2002 Games had on jobs and reported their findings in 2012 in a Journal of Economic Perspectives. They found that while some 35,000 job-years of employment had been predicted — and the institute estimated the final tally was closer to 44,700 — their research showed a boost of between 4,000-7,000 jobs.

For 2034, the report anticipates the creation of 42,000 job-years. Again, Matheson expects it to be closer to a fifth of that. Part of the problem is Utah’s low unemployment rate of 2.9%. An article published Tuesday by the Economist cites a European Bank for Reconstruction and Development study that found in areas where unemployment is low “the jobs mostly go to workers who are already employed, blunting the impact on the broader economy.”

Downen had not see either report. He said Matheson and his team were likely using different metrics or definitions of what constitutes a job. He also noted that the report doesn’t not reflect the longevity of employment, but rather job opportunities created by the event.

A more egregious data discrepancy, according to Matheson, is that the report credits the 2002 Olympics for leaps in tourism at the state’s ski areas and national parks and in its hotels and airports. Comparing the 15 years prior to Utah’s Olympics to the 15 years afterward, the report said ski tourism grew by 45% and park tourism grew by 30%. The Salt Lake City International Airport saw 30% more people come through after the Games and purchase of hotel rooms and other accommodations grew by a whopping 70%.

But that wasn’t all because of the Olympics, Matheson said, that was just America during an economic boom.

“Those numbers are true,” he said. “The problem is you can look at any state in the Western United States, and they would show similar types of numbers.”

Still, Matheson agrees that the Winter Games put Salt Lake City on the map in terms of potential tourist destinations. He said he feels the modern Olympics has only done that successfully for two hosts: Utah and Barcelona.

But that increase in tourism comes with its pitfalls. On Tuesday, some 3,000 protesters took to Barcelona’s streets to raise their objections to the throngs of tourists who now visit the Spanish city. In Utah, concerns over overcrowding at national parks and in the Cottonwood Canyons and mountain towns during ski season has also reached a tipping point.

Matheson said whether the state wants or needs that additional exposure is something organizers and state officials need to weigh before signing the host contract on July 24.

“That depends on if what you want is a city with a lot more tourism,” he said. “ ... and it’s not obvious that you always do.”

Hopkins agreed. He said that’s why the focus of the 2034 Games isn’t on bringing more people to Utah.

“One of the differences between ’02 and 2034 is, in ‘02 it was, ‘Let’s put Utah map. Let’s showcase it,’” he said. “The purpose of 2034 is totally different. 2034 is about the giveback. How can we strengthen community so these programs can be better in the future?”