The 2020 Olympic Games are due to be held in Tokyo, Japan. This Friday Japanese broadcaster NHK reported that the cost to host the Olympics had skyrocketed to six times the original estimate of $2.5 billion.
The calculations by the Tokyo 2020 Organizing Committee and the Tokyo metropolitan government have now pegged the eventual costs to hit $15 billion after factoring in rising costs for building additional lanes on highways, rising material costs, personnel expenses and enhanced counter-terrorism measures.
The Tokyo 2020 Committee had forecast revenues of $3.3 billion from sponsorships and ticket sales, which would mean a staggering shortfall of more than $11.5 billion. Cost-cutting could become a key issue if the shortfall is not balanced by revenues.
The total costs for staging the Tokyo Olympics will be shared by the committee, the Tokyo government and national government.
The revenue projections do not account for tourism revenue, although that is unlikely to make up the shortfall on its own. As a reference, figures from the UK Office of National Statistics say that 590,000 London 2012 visitors spent $1,900 per person on average, bringing $1.12 billion into the local economy.