Tokyo Olympic Games were due to take place at the end of July 2020 but, the International Olympic Committee (IOC) took the decision to delay the Games until July 2021.

 

Japanese Prime Minister Yoshihide Suga says he will "spare no effort" to ensure a safe and secure Tokyo Olympic Games to show the world that humanity has defeated the COVID-19 pandemic.

 

His comments come as organisers revealed postponing the Games until 23 July 2021 would cost the Japanese economy an additional 294 billion yen ($3.8 billion). https://www.abc.net.au/news/2020-12-05/tokyo-2020-olympic-games-pandemic-delay-cost-japan-suga/12953430

 

As the costs for Tokyo keep rising, it may reinforce skepticism about the wisdom of holding the Olympics in the middle of a pandemic. Recent polls show the Japanese public is divided on the issue of the Olympics, and any move to permit fans from abroad to enter despite a vaccine being on the horizon.

 

Required:

Tokyo Olympics will be the most expensive Summer Games on record, with expenditure set to increase further due to the one-year postponement.

 

A)    Discuss the forecasting issues that might explain why this is the norm. Why is it so difficult to accurately budget for the Olympic? What types of items need to be included in the budget? (6 marks)

B)    In your opinion, are the financial losses associated with the Olympic games outweighed by the perceived social benefits?