Will the London Olympics kill tourism?

November 10, 2011

This week I have been looking ahead to next year’s Olympics from a travel perspective.

The European Tour Operators Association (ETOA), which routinely terrifies Olympic host cities with head-turning shock figures, brought out a survey last week suggesting leading inbound operators are seeing an average 90 percent downturn in bookings during the London 2012 Games.

ETOA worries that UK businesses are basing their plans on vastly inflated visitor numbers and the city will suffer financially like previous host cities.

Doom-mongers love figures like this: It adds fuel to predictions of traffic gridlock; spectator stampedes on tube stations; and terrorism threats. Discussing the matter at a trade event on Tuesday in London, Ken Robinson CBE, former chairman of English Tourism Alliance, expressed amusement at the idea of London not being able to handle the Games. London is a big city, he said, well used to holding big events.

Indeed, reaction among the travel trade has been unanimously sceptical, with recognition that there will be some displacement but seeing the Games as a long-term investment for the UK.

Starwood Hotels’ Helen Wilson told me that “The Games provide a fantastic opportunity for the UK to position itself on the world stage and showcase the very best of this country to potential visitors across the globe… driving inbound visitors for a significant time afterwards.”

The British Hospitality Association reiterated that the ETOA forecast is alarmist and the Games are very good for tourism.

ETOA does, however, have a point.

Tourist arrivals at Olympic cities during their host year have at recent games not been exemplary. Beijing was down 18 percent in 2008 from its prior year’s total (helped no doubt by the Global Financial Crisis); it has been shown that after Sydney’s 2000 Olympics, the city lost out to other Australian and New Zealand destinations.

Tom Jenkins, ETOA’s Chief Executive wrote in a 2009 statement: “Every city is unique, and each city handles the Olympics in its own way. But we have yet to have a Games where tourism has not been disrupted.” But figures are hazy; local Olympics organising committees disband immediately after each event and there’s little political will to take deep dives into subsequent tourism fallout.

However, no one should be surprised that Europeans aren’t booking their trips to London eight months before the event. Booking trends have changed dramatically over the past five years, and travel plans are now often made with just a week or two weeks’ notice.

Corporate travel is a different story. Carlson Wagonlit Travel’s Nigel Turner: “We expect there to be a lower demand for business travel during the Olympic Games, but for those companies that still need to do business during that time, they need to book far in advance to secure space and expect higher prices. Alternatively, they may shift their meetings immediately before and after the Games – in June, early July and September.”

American Express Global Business Travel spokeswoman Tracy J Paurowski agrees: “We are seeing clients holding back on travel during [July and August] unless it is business-critical. The drivers behind this are that some hotels are putting blackout days during the games which is causing uncertainty around the rates that will be charged.”

London hotels have committed a large amount of room inventory to the Organising Committee of the Olympic Games (LOCOG), but London will have over 100,000 hotel rooms to flog when LOCOG starts releasing its pre-allocated room stock from early next year.

But at what price? At a sports tourism session at World Travel Market on Wednesday, Charles Starmer-Smith, the Telegraph Media Group’s managing editor for travel, made the point that Olympic host cities make all the right noises during the bidding process about hotels staying affordable for visitors but prices inevitably get pushed up.

The city’s official promotions agency London & Partners are pushing their “London Visitor Charter”, where attractions and venues agree not to overcharge from now until the Games finish. If visitors to London, whether they have a ticket to the games or not, feel they’re getting a fair price then they’re far more likely to return.

(Caption on blog landing page: An Olympic flag flies next to the British union flag in central London February 9, 2011. REUTERS/Toby Melville)

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