IOC Releases Evaluations of 2020 Olympic Candidate Cities

The International Olympic Committee (IOC) released their evaluation report on the three finalist cities to host the 2020 Summer Olympics after visiting each in the first quarter of the year: Tokyo (March 4-7), Madrid (March 18-21), and Istanbul (March 24-27).

The evaluation was provided to each member who will vote on the host, with a vote to take place in Buenos Aires, Argentina on September 7th.

The initial conclusion was that all three cities were quality candidates, with more detail about each bid specifically. Note that the report was finalized on April 19th, and information received until the end of the Evaluation Commission’s visit to each. This is notable, because the effect of the well-publicized protests in Turkey were not considered in the report, as they began after the EC’s visit.

Read the full report here (highly recommended).

Our summary is still quite long, but we’ve tried to hit good comparative points. The sections included are a rebuff by the IOC against two bid cities, a summary of the conclusions for each city, our conclusions, and the proposed budgets for each city.

“Above and Beyond”

The first firm conclusion that the IOC elaborated upon is the growing tendency of candidate cities to go “above and beyond” IOC requirements. In normal circumstances, this might seem as it could help a bid, but the bidding cities were in fact rebuffed for these plans. The IOC felt that the bid cities were pushed to this by various stakeholders, and there is a concern about controlling costs after the Beijing and London Olympic Games were wildly-massive (and expensive) spectacles.

The IOC said that the “Olympic Movement” must reign in this culture.

The examples given were:

• Istanbul committing a fund of $250 million called the “innovation fund” for “allocation exclusively to projects determined by and with the IOC and IPC Presidents.” They were asked to revise those references to reflect that the purpose is to create a legacy for the Games related to “Turkey’s overall youth agenda”.
• Tokyo committed to cover the cargo costs of any National Olympic Committee (NOC), in addition to the required cost to send all athletes home on an economy air flight. The IOC, seeming to think as though this would be a sort of bribery (though not explicitly stating that) instructed them to cease reference to that proposal.

The two issues are considered closed.

Istanbul Bid

Some key notes from the Istanbul proposals brought out in the Evaluation Commission’s report:

• An emphasis would be placed on social media with a full 7-year national and international communications strategy.
• Of 38 competition venues, 11 exist (5 would require major upgrades); 6 would be temporary; 21 would be new and permanent constructions, 11 of which will be built regardless of the outcome. This is by far the most incomplete bid.
• This ties into the overall focus on youth; 42% of Turkey’s population is under the age of 25. The main stadium for the opening and closing ceremonies would be a 20,000 seat venue expanded to 70,000 for the Games that would be built on the Asian side of the Bosphorus (the strait that separates the city from the portion on the Asian continent and the portion on the European continent.)
• A 72 hectacre Olympic village would include 32 buildings with 17,500 beds. 45% of those beds would be in double rooms and 55% would be in single rooms.
• The athlete training precinct in the Olympic village, near the residential area, would include a pool for athlete training prior to events. That would prevent athletes from having to fight for lane space at the competition venue between sessions.
• Istanbul proposed the construction of an “NOC Precinct” in the form of 1,200 rooms in 8 hotels in the “Bosphorus Zone” of competition. The IOC rejected this notion, saying that organizing committees “should not finance any additional accommodation for athletes and officials entitled to stay in the Olympic Village.”
• There are 55,000 hotel rooms within a 50 km radius of Istanbul, plus 9,000 University dorm rooms. The maximum guaranteed rate for a hotel room would be $450 for a 5-star hotel room and $250 for a 4-star hotel room: fairly modest costs. There would be an additional 17,000 rooms for media in the “media village” costing a maximum of $220 per night.
• Between now and 2020, Istanbul plans to invest $7.5 billion for new rail systems to combat traffic in the rapidly-growing metropolis. Other transportation investments include a rail tunnel and another new road tunnel under the Bosphorus.
• Istanbul’s two existing airports are considered to be enough to handle traffic, and though not considered in transportation planning, the committee acknowledged that a third airport (expected to be the biggest in the world) is planned to be open by 2019.
• The committee noted that the city currently has limited accessible green space, but that the Istanbul 2020 projects aimed to change that. However, after the visit, the city announced that it planned to develop a shopping mall on a popular park site, which sparked the massive protests roiling the city now.
• A challenge was noted in the recruitment of 20,000 in private security, which the EC viewed as a “challenge”.
• The PKK, an organization viewed from one side as a terrorist group that has threatened Turkish safety in the past, made a call to disarm just before the Commission’s visit. If that disarmament came to fruition, it would be a huge boost in favor of Istanbul’s bid.
• Other security situations include refugees from the civil war in Syria to the country’s south east, far from Istanbul and seismic activity.
• The bid has the full support of the government, including Governors of football co-host cities, all major political parties, and the private sector.
• A public opinion poll commissioned by the IOC shows 83% support of the citizens in Istanbul and 76% in the rest of the country.
• 14% of Olympic tickets would be sold for less than $20, with the overall average ticket price being $57. Ticket revenues are estimated to be $409 million.
• $653 million in domestic sponsorship is anticipated.

Tokyo Bid

• All land required for venues has been acquired already. Of 36 venues proposed, 15 exist, with two of those requiring major upgrades; 10 would be temporary; 9 would be new and permanent, and 2 are being built regardless of the outcome of the bidding. All new, permanent venues would be completed by May of 2019.
• TEPCO, the local power supplier, has returned to equal or greater power supply capacity after the March 2011 earthquake that decimated its production abilities.
• The new Olympic stadium would be built at a cost of $1.477 billion, with another $1.748 billion to be spent on other venues.
• The Olympic village would be located on a 44 hectacre site, with the same 17,000 beds as Istanbul.
• Pools and a running track will be located in the Residential Zone. Swimmers would be staying within 20 minutes of the competition venue.
• Within 50 km of Tokyo, there are 140,000 international-style hotel rooms, plus 9,500 rooms at traditional Japanese Inns. This marks well over double the capacity of Istanbul.
• The EC took concern at high room rates, which for “Other Client Groups” would be 690 for a single room or 1,634 for a double room in a 5-star hotel.
• A media village with 20,000 hotel rooms in 2-5 star Tokyo hotels, with the above rates applying. In a two-star hotel, that means a single-occupancy room would run $209 in a two-star hotel. Transportation operations were noted as a challenge for the media accommodations.
• Though Tokyo has a massive population (13 million in the city and 36 million in the Greater Tokyo area), it was noted that population and car ownership are relatively stable, meaning that existing transport infrastructure shouldn’t be too highly taxed.
• Tokyo has an existing transport plan, including a massive public transport network, regardless of the games.
• Tokyo has two airports which can host 42 million and 90 million passengers a year, respectively, so there is no concern there.
• 50,000 security personnel would be made available, with only 14,000 private security. Major safety concerns include earthquakes and tsunamis, though after 2011 there is a renewed focus on protection from them including sea walls and breakwaters.
• All major political parties and governments support the project.
• Public opinion is slightly less than the other two bids: 70% in the city, and 67% in the rest of the country.
• 60% of tickets would be sold under $50, and 30% would cost over $100, with $776.4 million in revenue for the Olympics and $46.3 million in revenue for the Paralympics expected (10.1 million tickets in total between the two cities).
• $932 million in domestic sponsorship for the Olympics and $26 million for the Paralympics is expected. That is significantly more than the other cities.

Madrid

• The planned dates of August 7th to August 23rd are set to coincide with the best climate and the local holiday season to maximize spectator attendance.
• Madrid’s project is very compact; aside from sailing and preliminary soccer rounds, all venues would be located within 10 km of the city center.
• Of 36 proposed venues, 27 exist (3 require significant upgrades); 2 would be temporary and 6 would be new and dependent on winning the bid. That’s by far the most complete bid, not a surprise given Madrid’s entrance in the bidding for the last few events.
• Access to almost 50% of the venues will be limited to end in May of 2020 (two months before the games). The EC was not fond of this proposal. This is likely due to the fact that so many venues are already in use by other sports programs, however the opposite is that the construction required is relatively modest, and therefore there is little risk in completion.
• The bid includes using some of the city’s downtown landmarks as venues, but the EC thought that it could be difficult to transform some into Olympic venues.
• Specifically, the rowing/canoeing venue site proposal runs under a major road bridge.
• The Olympic village will be on 64 hectacres and 17,800 beds. The village would include a track and an outdoor swimming pool.
• There are 45,000 hotel rooms within 50 km of Madrid, the smallest of the three hosts, but another 43,000 existing rooms exist in “other accommodations”.
• Room rates would be in the same range as Istanbul, with max for 5-stars being $428 dollars and two-stars costing $218 dollars. There would also be University dorm rooms for less.
• Media would be in dedicated hotels with 16,000 rooms, plus a 3,000 rooms media village.
• The EC was pleased with the number of existing rooms, including those rooms outside of hotels (likely large numbers of apartments or rooms in single-family units that are frequently rented).
• Madrid has by far the smallest population of the three cities, with 3.3 million and 6.4 million in the city and metro, respectively. That is a relatively stable population, so now major car growth is expected.
• No major infrastructure investments would be needed based on the existing projects. About $430 million would be spent on upgrades to certain existing metro lines and rail stations to improve access.
• The major Barajas International Airport passes 49 million passengers a year with a capacity of 70 million, so there is no concern over airport capacity.
• Athlete transportation risks would be mitigated based on the extremely compact competition zone. Spectator access would need to be paid special attention to.
• Madrid would employ 82 km of “dedicated lanes”, and another 185 of managed lanes according to competition schedules.
• Over 79,000 in security personnel is being considered, the largest force of the three bids.
• Major security concerns include the “ETA” Basque separatist organization that has been a risk in the city, and conducted acts of terror there, for decades. In November, 2012, the group said that they were ready to end operations. The EC felt encouraged by the number of security personnel.
• There is some concern about a recession in Spain, however it is again noted that a majority of the capital investment needed for a successful game has already been completed.
• The major political parties and major governments all support the bid.
• A public opinion poll shows support of 76% of those in Madrid and 81% in the rest of the country – that being the opposite of the trend may be due to the support lingering as a result of the 1992 Olympics in Barcelona.
• Madrid estimates $899 million in ticket revenues from the Olympics and $58 million from the Paralympics, by far the most ambitious estimates. That includes 7.4 million tickets.
• 39% of Olympic tickets would be available for under $55, while 32% would be over $100. The average cost would be $29.
• Local sponsorship is expected to be $694 million, with another $106 million in licensed merchandise sales.

Summary

• Tokyo is the most modern and most scalable city with the largest local market. It would also be by far the most expensive for visitors to attend. Financially, though, the massive Japanese economy is the most stable of the three, and though the budget is high, in relative terms it’s not outrageous.
• Istanbul would be the least expensive bid for visitors, and has the smallest budget, but it also has the smallest economy and needs the most work on capital outlays to make the city games ready. Istanbul as a city probably has the most to gain by hosting the Olympics.
• Madrid would be a relatively inexpensive city to visit for travelers, and has very low risk given the fact that almost all capital outlays (again, in relative terms) have already been made. This somewhat offsets the broader concern about instability in the broader Spanish economy. They were also the only of three bids not rebuffed for certain excessive expenditures.

Without consideration for broader, internal IOC politics, or greater goals of the Olympic Movement, and in terms specifically of the EC’s report, it would seem as though Madrid has become a big favorite, though the outcome of these votes are often highly unpredictable.

Budgets

Istanbul

In accordance with IOC guidelines, no capital investment is included in the OCOG budget. Istanbul 2020’s
expenditure budget comprises the following major elements:

Istanbul

In accordance with IOC guidelines, no capital investment is included in the OCOG budget. Tokyo 2020’s expenditure budget comprises the following major elements:

Madrid

In accordance with IOC guidelines, no capital investment is included in the OCOG budget. Madrid 2020’s expenditure budget comprises the following major elements: