It has been announced that Salt Lake City remains the prefered host for the 2034 Winter Olympic Games after a recent meeting. The Olympic Committee put a pause on the official announcement, until 2024, to evaluate the effects of climate change on the Games going forward. On top of that, if awarded, Salt Lake City could be put on a 20 to 30 year Olympic Games rotation as sustainability moves to the forefront of the conversation.
With all the hype around the Games, it is important to understand the impact this could have on the Park City economy, along with how announcements have impacted real estate prices in host cities leading up to past Olympic Games, namely what the 2002 Salt Lake City Games meant for the local economy.
2002 Winter Olympics
Without a doubt, the 2002 Winter Olympic Games helped put Salt Lake City on the world map. The Games were held from Feb. 8 through 24, 2002, and featured a total of 78 events in 15 sports, with Skeleton returning for the first time since 1948. Notably, Picabo Street made her final Olympic appearance at the 2002 downhill held at Snowbasin. In ice hockey, Canada won the gold medal in the men's tournament, while the United States won the gold in the women's tournament.
Events were held at both existing, and newly created venues around the Salt Lake region. These included:
- Salt Lake Ice Center: Short track speed skating, figure skating; located in downtown Salt Lake City
- Peaks Ice Arena: Ice hockey; located in Provo, Utah
- Utah Olympic Park: Bobsleigh, luge, skeleton, ski jumping; located in Park City, Utah
- Soldier Hollow Nordic Center: Cross-country skiing, biathlon; located in Midway, Utah
- Deer Valley Resort: Alpine skiing; located in Park City, Utah
- Park City Mountain Resort: Snowboarding, freestyle skiing; located in Park City, Utah
- Rice-Eccles Stadium: Opening and closing ceremonies, speed skating; located on the University of Utah campus in Salt Lake City
- Snowbasin: Alpine skiing (downhill, super-G, giant slalom); located in the Ogden Valley, about 40 miles northeast of Salt Lake City
The impact of the Games were felt far beyond the closing ceremony in Utah. A study done by the Gardner Institute at the University of Utah highlighted that $3.5 billion spent on the Games yielded $6.1 billion in economic output (in 2018 dollars). The Games also delivered a surplus of $163.4 million, a rare circumstance for modern Olympic Games.
From 2003 to 2016, many of the major tourism indicators showed significant positive increases compared to the period prior. Skier days were up an average of 43%, and taxable accommodation sales were up 60% for the region. Going into the potential hosting for the 2034 games, it is important to note that there are very different circumstances at play following the global COVID-19 pandemic, and signs of over-tourism that occurred the past few years. However, between now and 2034, we will have a new ski resort expansion built on the backside of Deer Valley, and improved infrastructure to support the growth of the region.
In the past few years, the Salt Lake City International Airport was completely revamped with a brand new terminal, and several notable hotels built in the Park City area, including the Pendry and Montage hotels. That being said, there were a number of factors at play that influenced these growth in these economic metrics, including a period of low interest rates that supported an influx of luxury developments that may have differed from studies around other Olympic cities.
The Olympic Effect on Real Estate Around the World
By no means should it be implied that any of these studies offer an ability to predict the future. The studies cited offer different perspectives as to how announcements and hosting of Games may have correlated with real estate prices in their respective cities. There are numerous factors that influence these findings, including a cities economic capacity to realize any long term benefits from hosting.
In "The Price of Victory: The Impact of the Olympic Games on Residential Real Estate Markets" by Constantine Kontokosta, they concluded that there is not a one-size-fits-all model to generating positive economic impact from the games. Sydney and Barcelona were the only two cities in the study to display statistically significant increases in real estate prices associated with the games. Atlanta, Los Angeles, and Calgary, BC were associated with decreases, and Seoul showed no statistically significant change. Many of the factors that they cited, had to do with how the respective communities allocated their investments. The Atlanta Games were plagued with issues from the community resisting the development, as many low income families were displaced to make way for stadiums. Another negative factor was the maturity of these markets, with a significant amount of existing infrastructure that allowed them to turn a profit during the games in Los Angeles and Atlanta.
The Sydney Games, across all of the studies, was heralded as one of the best managed Games in history. Frankel et al, found a 5.92% increase in property value associated with the Games in Sydney, and a 4% increase in London for the neighborhoods that had venues compared to other areas in the cities. Notably, they found that the neighborhoods that contained venues were correlated with higher net positive impacts than other areas in the cities without venues. Many of the efforts around the Sydney Games were to highlight tourism to Australia in general. Regions such as Canberra and Queensland realized significant increases in property values in the four years after the Games. While Kontokosta found that real estate prices in Sydney appreciated 60% in the four years after the Games, the studies by Frankel et. al. highlight the marginal impact along the different neighborhoods.
In these studies, it should also be understood that the supporting nations were able to withstand the economic investment required to host the Games, which was not the case with Greece in 2004. For them, the Games turned into an Olympic nightmare fueling a long term debt spiral that crippled their economy. In other instances, the impact of an announcement on real estate prices could already be baked into the anticipation of an announcement as found by Olsan, in a study on REITs related to the 2016 and 2024 Games in Rio de Janeiro and Paris, respectively. Given that Salt Lake City remains the preferred bid left for 2034, as was the case for Los Angeles' 1984 bid, it would be logical to assume that the expectations for Salt Lake City to host the Games could already be baked into existing prices.
Wrapping it Together
Hosting the Olympics is a monumental event for any city. To be at the center of the global stage has the ability to provide long lasting positive economic impacts to host cities when managed properly. Case studies such as what happened with Athens in 2004 spiraled the city into a long lasting debt crisis, while all three recent US based Games (including Salt Lake City) delivered a budget surplus with long lasting positive effects. While it is impossible to predict the impact of a potential 2034 bid on real estate prices in the Salt Lake region, studies from past Olympic Games have shown positive effects on neighborhoods with venues relative to regions without venues, and that if managed properly, can help propel wider regions into spillover growth. The United States will already be on the global sports stage for the 2026 World Cup, 2028 Olympics in Los Angeles, and potentially the 2034 Winter Olympics in Salt Lake City. While the 2002 Olympic Games were associated with all the right metrics for long term growth, it is safe to say, don't bet the farm solely on a 2034 bid as there are many factors at play.
If you want to learn more about the neighborhoods near potential Olympic venues, please give me a call today to discuss.
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