Olympic costs can crush host cities. Paris 2024 vowed cheaper Games.

PARIS - The last Summer Olympics, Tokyo 2020, massively overshot their budget even before adapting to pandemic restrictions. The preceding Games, Rio 2016, were a financial disaster.

The costs of hosting the Olympic Games have become so daunting that Paris ultimately faced little competition for its 2024 bid.

But organizers of the Games that open here on Friday say they have learned from the past and have a better model to offer.

Paris has sought to constrain costs by minimizing new construction. France already had plenty of sports venues, including a big soccer stadium, the Stade de France, and a tennis complex, Roland-Garros. So the main projects in the budget were the Olympics Village, an aquatics center and an 8,000-seat arena — all of which include plans for post-Games use.

“The plan from the start was to save money and not invest in things that are not useful,” said Étienne Thobois, CEO of the Paris 2024 organizing committee. “The Games adapt to the city, not the other way around.”

France has also retrofitted preexisting venues and set up temporary spaces that showcase its landmarks: Athletes will play beach volleyball alongside the Eiffel Tower, fence at the Grand Palais and compete in equestrian events in the gardens of Versailles.

“No white elephant,” Thobois said. “Everybody is conscious of the need to keep the cost of the Games in control.”

This strategy has kept the projected cost of the Paris Olympics well below that of the previous three Summer Games: in Tokyo, Rio and London.

And yet, as with previous Olympics, Paris 2024 is turning out to be more expensive than expected when the city bid for the Games, and economists say the benefits of hosting remain uncertain.

“Paris is going a step in the right direction,” said Oxford University’s Alexander Budzier, who has studied Olympic cost trends.

“Those questions still remain about the Olympics: Is it really worth the money?” he said. “The idea that you can really make the Games cheap by reusing or retrofitting venues? That’s not really what we see at the moment.”

The price tag of the Olympics

The latest estimates put the Paris Olympics and Paralympics budget for facilities and operations at 8.9 billion euros, or about $9.7 billion.

That would make these Olympics less expensive than London ($16.8 billion), Rio ($23.6 billion) and Tokyo (over $13.7 billion), according to a study co-authored by Budzier.

But Paris has not bucked the trend of running over budget and is not exceptionally cheap, he said.

Organizers say inflation is largely responsible for the price-tag increase since the city’s successful bid seven years ago, when the budget was estimated at 6.8 billion euros.

Security and personnel costs could push the price tag of these Olympics higher. At this particularly tense global moment, France is deploying 45,000 police and soldiers and 50,000 private contractors to secure the Games in the Paris region. And to avoid strikes by public workers, France agreed to offer bonuses and other incentives.

Not included in the Olympics budget: 1.4 billion euros ($1.5 billion) to make the Seine clean enough to swim in, and about 3.5 billion euros ($3.8 billion) to extend Metro line 14 ahead of the Games. Officials have said those were projects they planned to pursue anyway and were factored into other budgets.

The Olympic toll on taxpayers

Even if Paris can’t shake the Olympic reputation for overspending, officials say the Games won’t burden taxpayers with the legacy of debt faced by many other host cities.

Organizers have cited 3 billion euros ($3.26 billion) as the amount that would need to come from public funds. That would be 0.1% of France’s gross domestic product.

The head of France’s national auditor has said the cost to taxpayers will not fully be known until after the Games and could be 3 billion to 5 billion euros.

Although credit rating agency S&P recently downgraded France over concerns about its overall debt-to-GDP ratio, S&P analyst Hugo Soubrier said the Games “shouldn’t have a significant impact on French public finances.”

A big problem in past Olympics has been building projects that went way over budget, with host cities left to cover overruns. But less construction in Paris has meant a lower risk of overruns.

Officials emphasize that taxpayer money is geared toward infrastructure that can benefit the Paris region beyond the Olympics, while the operations portion of the budget is almost entirely privately financed.

The International Olympic Committee (IOC), which gets money from big sponsorship deals and broadcast rights, is contributing 1.2 billion euros ($1.31 billion) to the Paris organizing committee. Paris 2024 can also claim revenue from ticketing, licensing and domestic sponsorships, while the French government can claim the tax windfall from hotels and other tourist spending.

Thobois said his organizing committee is on track to “spend no more than we can generate” and that he hopes its strategy would set a new standard.

The benefits of the Olympics

The IOC proclaims: “Hosting the Olympic Games generates powerful economic benefits.” Economists counter that the benefits have often been disappointing or unclear.

For these Olympics, organizers say there will be 3 euros of “economic impact” for every euro of public money spent. That’s based on a study commissioned by the IOC and Paris 2024, which projected an economic boost of between 6.7 billion and 11.1 billion euros ($7.27 billion and $12.05 billion) in the Paris region over a 17-year timeline — generated by tourism, construction and spending to organize the Games.

Paris organizers this month celebrated that they had set a record with 8.6 million tickets sold. There are signs, though, that tourism may be falling short of expectations. Air France-KLM reported a drop in traffic as travelers appeared to be avoiding the Olympic crowds and premium pricing in Paris. Lower-than-expected occupancy has prompted some hotels to reduce last-minute rates. Meanwhile, shops and restaurants near Olympic venues with tight security have complained of a slump in business.

“Compared to previous games, the economic legacy will be less significant for Paris,” S&P assessed. It noted that although the 1992 Olympics “put Barcelona on the world tourism map,” Paris has long been a prime tourist destination and is “unlikely to experience the same economic boost.”

Beyond tourism, Paris officials say they have tried to ensure that the Olympics deliver benefits to local residents, especially in marginalized communities — though they also face criticism for evicting migrants and unhoused people before the Games.

France spent about 1.5 billion euros ($1.63 billion) to build the Olympic Village in the high-poverty suburb of Seine-Saint-Denis. After the athletes leave, the plan is to turn it into mixed-income housing and an engine of urban renewal.

Officials say that about 2,050 residents of Seine-Saint-Denis were also hired to construct and prepare Olympic and Paralympic venues.

“We are aware that our support for these enterprises in the social and solidarity economy must not end after the Olympic and Paralympic Games,” Florentin Letissier, a deputy mayor of Paris, said in an interview Tuesday.

Economist Andrew Zimbalist, who has written for years about the Olympic Games, said the IOC and host cities have long promised to turn Olympic finances around.

“The first reaction I have is that I’ve heard all this before,” he said.

Even so, there is a push for cost cutting, as the IOC could no longer “convince people that this is the most wonderful thing that could happen to your city,” he said, “and there is some learning that’s gone on.”

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Claire Parker contributed to this report.