Hosting the Olympic Games has become a costly affair. Oxford University research shows that every Olympics since 1960 has run over budget, and several economists argue that hosting the event does not make financial sense.
But as this year’s Winter Games go ahead in Beijing, those spearheading the next edition in Italy have set their sights on creating a blueprint for a commercially viable Olympic Games.
Vincenzo Novari, CEO of the organising committee for the 2026 Winter Games, explained to fDi why Italy’s will be the least expensive Olympics in recent history, and why the Games are a long-term investment for the country.
Q: The Olympic host cities are Milan and Cortina d’Ampezzo, but the competitions will take place across the regions of Lombardy, Veneto and Trentino-Alto Adige. Why?
A: Our candidacy was as a country, not a single city. This was the new thinking behind our bid, and in my opinion, the reason it won. It’s about exploiting existing locations. For example, the biathlon will be held in Anterselva and the Nordic ski in Val di Fiemme. These are known worldwide as among the best places for these events.
Q: Who is paying for these Games and how much will they cost?
A: Our budget consists of €1.5bn in costs and €1.5bn in revenues. We’re a private foundation so this is 100% privately funded — the state has only provided guarantees.
Our business plan is the least expensive in the history of the Winter Games
That’s just to organise the Games; the government is in charge of improving infrastructure like roads and rail for the event. But our business plan is the least expensive in the history of the Winter Games — or at least for the past 20 years over which we can compare. That’s because we’ve cherry-picked venues where the infrastructure is already there.
Q: Olympic Games are often loss-making for the host, which has prompted candidates to pull out of recent bids. Was this not a concern?
A: Organising the event in a single location and obliging it to build a huge amount of infrastructure makes it difficult to balance budgets. The idea of Italy’s Olympics is to bring together existing venues and their know-how, which reduces the costs. That’s a key point as the public cannot pay for the Games. In this sense, I’m convinced that we are the Winter Games of the future. I hope our example of organising countrywide Games is the legacy we can leave the Olympic and Paralympic movement.
Q: Will the Olympics be good long-term investment for Italy?
A: A study by universities Bocconi and Ca’ Foscari has estimated that the Games will boost Italy’s economy by €4.3bn. I’m more conservative than that, but I’m sure it will be a good investment. What I’m really in favour of are the intangible assets we’ll leave behind. For example, Switzerland, Austria, France and Germany are considered first-class locations for winter sports and holidays. But we can show tourists that the beauty, infrastructure, services and hospitality of our venues are as good as — if not better than — these countries.
Q: Will the event boost foreign investment into Italy?
A: We are working with Bocconi University to research which levers we can pull to increase foreign investment, thanks to the Games. For example, there are plenty of family-owned hotels in the Alps, but they don’t always have the money to improve their services. But perhaps the Games will increase foreign hotel groups’ interest in investing in Italian structures. This is something we’re looking to understand better, but we’re sure that something exciting can happen with this kind of investment.
Vincenzo Novari is CEO of the Milano Cortina 2026 Foundation
This article first appeared in the February/March 2022 print edition of fDi Intelligence. View a digital edition of the magazine here.