Thursday, 30 December 2010

2012: The Year Of The White Elephant?

The summer of 2012 sees London host the Olympic Games and is being hailed by the government as being a glorious opportunity to promote tourism for the UK and more specifically London which will hopefully bring in hundreds of millions of pounds of much need revenue to the country as we try and fight our way out of recession and back into prosperity.

But will the Olympics really be good for tourism or is it merely an extremely expensive distraction and a white elephant that has not only cost the taxpayer billions of pounds but will continue to leave an expensive legacy long after the games are finished?

There is no doubt that the Olympics is a high profile event that is watched by hundreds millions of people worldwide. It is for this reason that both Sydney and more recently Beijing were so keen to host the event as it effectively put both destinations on the map as tourist destinations bringing in millions of extra revenue as the worldwide public look to try out new destinations.

The problem that London has with the Olympics is basically that we are already a major tourist destination with millions of visitors flocking to the capital every year to witness the pageantry and history, museums, attractions as well as London theatre breaks, Premiership football, first class restaurants and night life. London is also the gateway to Europe for long hall visitors from North America, Australia and New Zealand with hundreds of thousands of travelers both beginning and ending their tours in London. This is where the government seem to have not done the homework properly as they are so sure that everyone will flock to the capital to watch the games that they have effectively promised every hotel in the city (including the ones being built!) that they will be able to charge absolute top dollar during the duration of the games. This has led to a situation where we now have two star hotels in Bayswater attempting to charge £300 per night for the duration of the games!

So how many people actually traveled to the 'new tourist destinations' of Beijing and Sydney for the Olympics and will the government strategy work? The very sobering answer is that it is estimated that Beijing received a mere 60,000 visitors from abroad who actually traveled to watch the games and the Olympics in Sydney did not fare much better. Both countries have gained extra tourist revenue since then as they have established themselves onto the tourist map but London was already a first class tourist destination and it is highly questionable whether this same strategy would have the same effect for the UK.

Over 3 million people come to London every year for their holidays and the majority of these holidays are booked in the November to January period. The rise in online travel agents has given people the opportunity to shop around and get maximum 'bang for their buck' like never before so isn't it a distinct possibility that when faced with the sky high and completely unrealistic prices that are being touted around by greedy hoteliers attempting to fill their boots and capitalise on the games that a lot of people will think 'mmmmmmm maybe we'll go to London some other time?'

This could have serious repercussions on the UK tourist economy and all the signs from key people in the industry are that this is exactly what will happen. As most websites and booking engines run on a 12 month cycle the impact won't be seen until the summer at least but it is my professional opinion that unless London hoteliers give themselves a reality check and bring their 2012 prices down to a reasonable competitive level we will get a situation where we go from one extreme to another and see rates dumped in a panic sell off in the spring of 2012 which again would not be good for anyone.

The Olympics is a grand spectacle and I have no doubt that London will put on a great show for all the world to see but there is a real chance that unrealistic sky high rates during the games coupled with the building of new hotels specifically for the games that will have to be filled afterward therefore diluting the market even further will have a serious and lasting detrimental effect on the UK tourist industry.

In short, if London doesn't look after it's bread and butter money and chooses to alienate and price out of the market its core visitors in favour of an attempted quick buck to cash in on the games then there is a real chance that 2012 could make the fiasco of the Millennium Dome where we somehow managed to spend £1 billion on a tent look like small change!

You have been warned London- KEEP IT REAL!

Boyd Kemble
Managing Director

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