It is just over a year since International Olympic Committee President Jacques Rogge announced in Buenos Aires that Tokyo had beaten Madrid and Istanbul to host the 2020 Olympic Games:

Around one year later the question still remains â€" what will the win mean for Tokyo and Japan overall?

Most analysts would agree the long term impact of hosting the Games is generally beneficial to the local economy.

Share markets in Sydney, London and Brazil recorded significant gains in the period following their successful announcements.

Tokyo’s Nikkei also performed admirably, albeit there are several drivers behind this including changes to economic policy.

What has traditionally followed in all previous host cities are increased tourism numbers far beyond the completion of the Games.

Before hosting the 1964 Olympic Games, Japan completed an unprecedented number of city (Tokyo) and countrywide improvements and upgrades, the most notable its public transportation system which provided a new train network or Shinkansen.

Today Japan prides itself on being near-ready to host the 2020 Games however, the country will still upgrade a number of large-scale infrastructure projects. 

In this paper, JLL and STR Global have specifically considered previous host cities London and Beijing, identifying what are the key impacts in terms of tourism and hotel performance before, during and after the Olympic event, in order to draw conclusions about Tokyo in 2020.

This is the second collaboration by both firms assessing the influence of the Olympic Games on Tokyo (see Tokyo 2020: The Olympic Games Effect, released in November 2013).

Former Olympic Host Cities

According to industry sources, the 1988 Seoul Games achieved a 78% increase in international visitors to South Korea between 1986 and 1990 (by 2002, up 222% on 1986 levels to 5.3 million international visitors). The Barcelona Games in 1992 was the second highest in terms of inbound tourism growth (with Spain as a whole reporting an increase of 27% between 1990 and 1994).

The Atlanta Games in 1996 saw a 4% rise in international visitors to the USA between 1994 and 1998 and the 2000 Sydney Games recorded a 16% increase in international visitors to Australia between 1998 and 2002.

However, inbound tourism growth was not recorded in all previous host cities. The number of foreign visitors to Beijing in August 2008 declined 7% to 389,000.

Over the remainder of the summer that year, visitor numbers were sharply lower, recording a 30% y-o-y decline. It should be noted that this was also at the peak of the global financial crisis.

The most recent Games in London recorded improved results. In September 2012, overseas visitors completed 2.6 million visits to the United Kingdom, or around 1% higher than the previous year.

In the three months July to September 2012, there were 4% less visits by overseas residents than in the same period in 2011. However, associated spending on these visits was 6% higher than the previous year, with a total figure of over GBP 6 billion.

History shows the flow on effects for tourism and the wider economy generally extend to the whole of the host country and bordering cities, as was the case in London. In the UK, the Eurostar aided travel to many European cities for tourists attending the London Games. 

It is safe to assume that in 2020, tourism will extend far beyond the city boundaries of Tokyo with Osaka and Kyoto most likely to see a large increase in overseas visitors. Kanazawa may also welcome additional tourists once the Hokuriku-Shinkansen commences operation in 2015.

Full report