There are lots of stories running in the press about the effect the Olympic Games are having on operations in London, especially in the tourism, retail, and entertainment sector. Two days ago a headline in The Guardian was “Olympic London deserted: it’s a great time to be a tourist in the capital”, when their reporter toured London’s major attractions and found them relatively quiet. In the hospitality trade press there are stories of half empty restaurants, and under occupied hotels. Newspapers are also reporting that some London theatres have closed during the Games as there is not enough demand.
These reports suggest that somehow all of this is a big surprise. Whereas we take the view that it was entirely predictable. Indeed, since so many of the operations affected take advanced reservations, operators were able to forecast with some accuracy what the Olympic effect would be. But why is business down?
One of the reasons for this is explained in this Mail Online article. If their estimate of 1.5 million city workers staying at home is correct, then the effect of this is very great. This is especially the case in those parts of London where these people work, which may not attract normal tourists or Olympic visitors. In addition, regular tourist numbers from overseas are down, replaced by ‘Olympic tourists’.
As well as this volume effect, another reason is visitor behaviour. A spokesperson for the British Hospitality Association was quoted yesterday as saying – “The people who are coming to the Olympic Games are not your normal tourists. They don’t appear to be eating, shopping, or staying in hotels”. Is this a surprise? Olympic ticket holders are going to devote their day to the sports, or sports, they have come to view. They are definitely not going to go shopping and they’ll eat at the sports venue not a restaurant, whilst UK spectators will not stay overnight due to the expense.
So for 17 days business is bad. But we suspect that the success of the Games, and the huge goodwill that it is generating will be good for business for at least the next 17 months, if not longer.