Will London Olympics be bad for tourism?

It has been a recurring theme at many Olympic Games. A city spends several years and millions of pounds putting its bid document together, which to satisfy both the IOC and the host population has to include demonstrations of popular support, and projections of lasting economic, social and sporting benefits. But after the euphoria of winning, the costs routinely soar to well beyond initial estimates, there is disruption to locals while Games sites are constructed and infrastructure is developed, and doubts set in about whether the benefits really justify the costs.

Bid committees tend to tout hosting the Olympics as the opportunity for a tourism bonanza – but is this really the case? As Editor of CABI's Leisure Tourism Database the benefits or otherwise of the Olympics is a topic I've regularly had to address, as positive projections from bid committees and host city tourism board are countered by negative views from the political opposition or economic think tanks. As preparations for London 2012 take shape, the European Tour Operators Association (ETOA) has entered the debate today, with an analysis suggesting that the idea of a tourism boost from the Games is wholly illusory.

The ETOA press release says that it looked at visitor arrival statistics for the past Olympics in Beijing ('08), Athens ('04), Sydney (2000), Atlanta ('96), Barcelona ('92) and Seoul ('88). Whilst some of these games saw a peak in demand during the games, all saw a major disruption to their normal tourism market and none revealed any conspicuous tourism growth, according to the ETOA.

The latest data from Beijing is particularly striking. From the spring of 2008, international visitor arrivals to Beijing plummeted, and in the month before the Games they were 30% down on the previous year. In the months after the Games, the tourism slump continued, with international arrivals more than 20% down.

Now, Beijing may be a special case. In the run up to the Games there was widespread negative publicity in the world media, with news in the preceding months highlighting political unrest in Tibet, human rights concerns, the closure of many bars and restaurants, and pollution fears. There were also difficulties, or at least media reports of problems, in obtaining visas, and news stories of inflated hotel prices. In the light of this, it was perhaps not surprising that fewer than predicted international tourists made the long trip to Beijing. Compared to Beijing, London has the advantage of easy access from many competing nations in Europe, while Rio (host in 2016) has the advantage of a wonderful natural setting and a global reputation as a 'party city'.

But the ETOA also suggests that tourism in Sydney stalled around the 2000 Games. Their analysis says that in the five years prior to the Olympics, Australia's and New Zealand's tourism was growing at the same rate but Australia's growth lost ground significantly straight after the Olympics. It is suggested that the Olympics did not materially help Australian tourism, or if it did, it made very little difference. Sydney tourism even underperformed against the rest of Australia. And in Athens, the ETOA says there were considerable losses before and after the games both in the Capital and throughout Greece.

Barcelona is the example commonly held up as a model of showing long-term benefit from the Olympics. The international exposure and infrastructure improvements that went with the Games, coupled with natural advantages of climate, natural setting and good food and music, are regarded as helping to turn the Spanish city into a leading international tourism destination. There are other intangible benefits that may stem from being an Olympic city, providing the Games are successful; improved civic and national pride, better transport and accommodation infrastructure in the long-term, and sports facilities which may or may not find a use once the Games are over. An economic paper written by Rose and Spiegel earlier this year also suggests that hosting a mega-event like the Olympics has a positive impact on national exports.

But there is a twist to their findings. The authors say that while trade is around 30% higher for countries that have hosted the Olympics, unsuccessful bids to host the Olympics have a similar positive impact on exports. It is suggested that the Olympic effect on trade may be attributable to the signal a country sends when bidding to host the games, rather than the act of actually holding a mega-event.

Which begs the question, in light of the ETOA claim that tourism is commonly harmed by hosting the Games. When bidding for the Olympics, is it best to lose?

One thought on “Will London Olympics be bad for tourism?

  1. Acai Optimum March 29, 2010 / 6:44 pm

    very informational… educative as well,am still looking up to more of your blogs… good job!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s