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Olympics 2012: Could London Lose Money from the Games?
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The spotlight is on London this summer, but some of the most interesting information comes when you crunch the numbers behind the Olympic Games. We asked Elena Strapkova to weigh the costs of putting on the Games against the revenue expected. Keep reading to see if the big event is on track.
A recent Orbitz survey revealed that more than one in every 10 Americans is planning to visit the London Olympics this year. The tourist influx to England’s capital will be enormous this summer. How will their spending impact London’s economy? Will it be enough to cover the immense costs that the city spend for the Games?
Tourists Will Spend 18 percent More During the Olympics
The figures from Tourism Economics indicate that 12.7 million overnight leisure visitors, both overseas and domestic are expected to come and stay in London during 2012. That is a 5.2 percent increase on the equivalent figure for 2011. Visa spending report projects a £750 million additional consumer spending increase during the seven week Games period, which will be largely generated by the foreign visitors to the UK for the Olympics. Over the 7-week period, international visitors are expected to spend a total of £709 million in the UK, an 18 percent increase on what would be expected if the Games were not taking place.
According to Visa, domestically, a £41 million spending boost is expected from UK cardholders during the Olympics.
This would be first time for an Olympic Games host market, which, according to statistics, usually experience a domestic spending slump during the Games. Domestic spending boost is driven by the public’s enthusiasm for the Games, demonstrated by the high demand for Olympic tickets. Visa report suggest that British residents are likely to switch from traditional patterns of summer spending to getting into the Olympic spirit by stocking up on supplies and entertaining at home. Supermarkets should be particular beneficiaries of this.
Overall, the retail, leisure and travel sectors look set to be the biggest winners from the Olympics, benefiting from a combined spending injection of £508.4 million in seven weeks.