Smoke and mirrors – tourism and the Olympics

Written by on July 23, 2012 in Business, Leisure, News, Perspectives, World - No comments
May 26 2012 was just another sporting Saturday in London; a football play off with 60 000 spectators in attendance at Wembley Stadium, 80 000 Rugby followers watching a Rugby final at nearby Twickenham and about 30 000 golf enthusiasts attending a world match play golf tournament at Wentworth. Add them together and that’s 150 000, or thereabouts, sports minded people attending a sporting event on one Saturday in May: nothing at all unusual for London.
So if London and its infrastructure can handle such numbers on a regular basis, the question a rational minded person might ask is “why all the fuss about the Olympics? It is unlikely that there will be more than 150 000 people in attendance per day for all the combined sporting events taking place in London during the duration of the Olympic Games. Enter the ‘know nothing opportunists’”.
These are the people who suddenly invent their importance when global attention is focused on them; the more convincing they sound, then the more people believe them. That they are massively wide of the mark in knowledge of the topic is irrelevant. Recent examples have been seen in Greece where a battalion of economists were drafted in as experts by local the various media channels and each had their two minutes of fame and fortune, each readily gave the answer of where the country had gone wrong and each gave their prescription of what Greece really needed to do to remain afloat; each expert qualifying how they were correct in their assertions and scores of others before them were wrong. Probably very few normal people actually listened to the prescriptions offered. Prior to that, the providers of wisdom, often masquerading under the title of “consultant”, were last seen in 1999 when they prophesized the end of the world as we know it on December 31 1999, as computers would close down planet earth. That is, unless you paid them a handsome sum to impart their knowledge of all things technical on you so as to avoid Armageddon. Knowledge, that is, which in reality was likely to be less than that of the average man in the street, but transmitted convincingly enough to large plc’s and the like, it was a business case that enabled them to earn big bucks from those  suckered into paying fat sums for nothing…. ‘’just in case’’. Enter the 2012 London Olympics and it seems the two-minutes-of-fame attention-seekers and the semi-retired Y2K consultants are back in business, only this time it’s sport that provides their financial remuneration seeking backdrop.
Now masked somewhere under the HR portfolio with some vague new title on their business card, they are resurrected consultants. They seem to have convinced anyone who will listen that with the Olympics comes another Armageddon scenario. Na?ve employers in the London area have been convinced that the extra volumes of people (more on that later) in the city for the Games will make transport for employees intolerable. So to counter this and to ensure that the GDP of the country is largely unaffected, complex work-at-home schemes have been designed (by the consultants) and technical infrastructure put in place to save the rank-and-file employees from the need to travel and thus free up the what is sure to be a clogged transport system! One mustn’t also forget the Paralympics that follow on from the main event and conclude in September which means London workers will be affected by Olympicitus for almost two months, so survival planning is sold as a pre-requisite!. Wait a minute though, like the Y2K scam, is there not something of a smoke-and-mirrors game being played out here?
Virtually all sporting events hosted in popular cities or tourist locations have one end result – fewer people come to the sporting location during such an event than would otherwise visit during a normal period. London is no different. If we go back to 1998 and the soccer World Cup in the world’s most popular tourist country: France, the net result was about 10 per cent fewer visitors to the country that summer, as regular tourists kept well away; the total number of soccer fans could not compensate for the loss of regular tourists. Fast forward to Beijing in 2008, visitor numbers for the summer were down about eight per cent than they would normally have expected. Even Greece struggled in the 2004 Olympics as although Athens (which is normally deserted in summer) got extra visitors, the rest of Greece suffered because of the Olympics’ ability to derive a knock-on effect. One should also bear in mind that 10 per cent and eight per cent reduction of numbers in France and Beijing also equate to a massive amount of people! For London, it is well-known that tour operators from across the globe and in particular from the key source market of Asia, have this year given London a very wide berth! That is to say, London has been deleted from this year’s tour offerings and that means hundreds of thousands and indeed millions of visitors from key source markets have been routed to other European cities and away from the UK.
No matter how many sportspeople and sports watchers try to replace the traditional tourist – they cannot in any way make up for the shortfall. Added to this is the fact that domestic tourism for London during the summer period is a nonstarter. The capital’s hotel rates have ensured that any potential and indeed regular domestic tourists stays well away from the capital and to cap matters off, business visitors have in effect been told to “stay away” for the summer.  As if to support the rationale that there will be significantly fewer people around in London, one of the key hotel booking consolidators (of which there are just a handful) is reporting that its booking figures for London this summer are 35 per cent down and more relevant perhaps, bookings for key rival cities like Paris, Rome and Barcelona are increased by exactly the same percentage. A clear indication that the “tour groups” have moved elsewhere. Even the Olympic-approved tour operators such as Thomas Cook and Prestige Ticketing, seem to have done their best to ensure as few as possible visit the Olympics. They have been tying the tickets for the games into extravagant hotel packages – don’t buy the package and you don’t get the ticket! For example tickets alone can cost up to 2012 pounds for the opening and closing ceremony but Prestige are selling those at 7500 pounds. More than three times the mark-up. If you add VAT it becomes 9000 pounds. Of course, a hotel is thrown in with the package.
Thomas Cook are not to be outdone and a third level averagely priced stadium ticket for the men’s 100m athletics final is packaged with a night in a four-star hotel with transfers for “just” 3899 pounds. The good news though is that also includes breakfast.
Thus the belief that London expects hundreds of thousands (and if you listen to CNN – 11 million!!!!!)  more visitors than normal this year and all the implications that goes with it, is, to put it mildly – nonsense!
While the economic realism of the Olympics is not what many London Olympic advocates  would want the public to hear; it gets worse.
Those that do travel to watch the Olympics do so for one prime reason: they are sports enthusiasts. It is also a fact that they spend less than the average tourist, thus the amount spent in London during the summer months will be significantly less than in a normal year. Let’s face it, the Moldovan Rhythmic Gymnastic squad and their entourage will not be keen on spending 100 pounds a head for a West End Theatre Ticket! Equally the Burkina Faso synchronised swimming team is hardly likely to be found in Michelin-starred restaurants.
As for that sector of the travel industry seen as having the most to gain from the Olympics; the hotel industry, then for them their may be more tears of pain than tears of joy. True, some hotels will do very well indeed out of the Olympics: those (and often new builds) close to the Olympic venue are will positioned to maximise earnings, as too are hotels chosen by the various Olympic officials and Olympic federations where the “taxpayer pays” and where money is no object. These invariably are the higher category hotels. In some cases hotels may have significantly reduced numbers staying in them but the inflated room rates means they do reasonably “ok”. However, the fact is that at the end of the day, there will be more hotel owners in the London area who find their properties devoid of people and for whom the Olympics will turn into a financial disaster than there will be happy smiling hotel managers for whom the Olympics is utopia.
If we have a tip it is this: if you have the guts and really do fancy a visit to what will surely be a party atmosphere in the UK capital and if you want to eat in uncrowded restaurants and you want to take in a West End Theatre performance then right now might be the time to do it! Last-minute offers will be plentiful both for theatres and hotels. Try calling a hotel on the morning of arrival and ask them for a deal; hotel managers will bite off your end to guarantee any sort of income! When you are there grab a last-minute theatre offer and travel around the capital in comparative serenity.
All this is not meant to put a damper on the Olympics, far from it. We hope the Games – both of them – will be remembered as being the best ever. The inhabitants of London (or many of them), are volunteering their valuable time as volunteers and they, perhaps more than anyone, also want the Games to be remembered for all the right reasons. The infrastructure is in place and will cope; the venues are first-class and let’s hope that its sport that wins the day and that the Olympic spirit of participation first, glory second prevails.
As for the consultants and opportunists (hotels), they may have to have a re-think on their knowledge of sporting events.
* London Olympics July 27 –  August 9
* London Paralympics August 29 –  September 9

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About the Author

Mark Thomas is Managing Director of Jamadvice HRG Bulgaria, one of Bulgaria’s leading Travel Management Companies with a 20 years market leading presence on the Bulgarian market.