I'm in London England this week and am thoroughly enjoying being a tourist.
The streets of London are full with people from other counties. There are a minimum of 3 selfie sticks in sight at any time, and walking through a shot is guaranteed. Not to mention all these crazy people driving on the left side of the street, what's up with that.
One of my first thoughts after seeing the umpteenth gold covered monument is how much is all this worth. An easy evaluation would be to figure out it's volume, and multiply that by the current price of gold or whatever material it's made out of, but that's not how true value is calculated. These statues and buildings do not derive their worth from their physical elements, but rather the importance placed on them by onlookers. Thus the true value would be the economic revenue generated by the tourists that come to ogle them.
A while ago I read that the UK pays the royals money every year. In 2017, 69 pence from every tax payer went to maintaining the royal family. This includes the expenses for engagements, such as the Prince of Wales spending £362,149 visiting India, Malaysia, Brunei, and Singapore aboard the royal family’s jet.
At first this seems absurd, but when you dig deeper into the economics of the royal family, it actually makes more sense.
Being from Toronto, the value that is added to London by it's royal tourism is easy to see. There isn't anything like this in the 6ix, unless you count Drake as royalty. The throngs of tourists here, and the ridiculously high prices for everything, seem justification enough for the letting the royals do there thing.
However, this isn't a formula for success that can be repeated ad nauseam for any type of tourist attraction. For example, take the Olympics, the most prestigious multi-sport athletic event in the world.
If you look at the athletes that participate in the Olympics, their financial situation may surprise you. Yes there are performance based stipends and endorsement deals, but most have other jobs they use to pay the rent. This includes teaching, modeling, engineering and many other occupations that you wouldn't necessarily expect to be paying the bills of an olympian.
Participants aside, it isn't even a sure fire bet to host the games. There are a lot of variables to weigh when considering to make a bid for hosting the Olympics. The cost for hosting has dramatically gone up, and the cost to even bid on it. Tokyo spent as much as $150 million on its failed 2016 bid, and Toronto decided it couldn't afford its 2024 bid. That may be for the best however, because hosting the olympics has put an enormous financial burden on some of it's past host cities.
This isn't a phenomenon exclusive to the olympics. Sporting events garner so much media buzz that hosting cities get caught up in the excitement of being the place that the financial projections sometimes get left by the wayside. For example The Super Bowl consistently costs cities more than it earns them, but continues to be a big ticket item because of over inflated estimates for the revenues it will bring in.
It just goes to show that spending extravagant money on tourist attractions isn't always great for the bottom line, unless you are royally good at it.