With just a week to go before the start of the 2012 London Olympic and Paralympic Games, a series of setbacks have beset the event, including security issues, bad weather conditions and fears of transportation chaos. Nadejda Popova, Travel and Tourism Analyst at Euromonitor International, investigates the major threats and challenges.
The 2012 Summer Olympics should provide a boost to the economy, generating £750 million worth of spending, with the retail, leisure and travel industries being the biggest beneficiaries. London estimates that nearly 18,000 new jobs will be created annually from the Olympics through to 2015.
London is a popular destination which welcomed 15 million visitors in 2011, thus becoming the third most popular city in the world. Euromonitor International expects that in 2012 an increase of 2% in international arrivals to the UK will be seen, accounting for a displacement factor of 15%.
The majority of growth is likely to derive from neighbouring European countries such as France, Germany and the Netherlands thanks to good air, rail and sea links. Overall, Euromonitor International expects 330,000 international visitors to attend the 2012 London Olympic and Paralympic Games.
An increase in the number of tourists to the capital will support London's local economy. Olympic projects have helped mitigate some of the impact of the UK's construction slowdown on East London.
The Olympic Games are also regarded as highly controversial, with many industry players voicing some concern about hosting this huge event.
Inbound operators, represented by the European Tour Operators Association (ETOA) and UKinbound, have expressed concerns about the strong displacement trend triggered by high prices, travel disruption and security threats. This, in turn, is expected to influence consumer expenditure in the UK overall and lead to a decline of 1.3% in real terms per capita between 2011 and 2012.
The Games have in the last few weeks also been affected by security issues. In the week beginning 9 July the UK government informed the public it will be enlisting the help of 3,500 soldiers to fill the gap following a security staff recruitment failure on the part of the main contractor G4S, which is responsible for the security of the event.
In addition, reports of lengthy queues at passport control at Heathrow Airport and inexperienced immigration control staff have further reinforced both public and airlines' such as British Airways' concerns about huge delays at London's major transport arteries.
Although in June 2012 the airport operator BAA opened a temporary departure terminal to help service the high volume of departing athletes after 12 August, fears remain as to how efficient the new terminal will be and if it will help ease the handling of huge passengers flows out of the country. Importantly, the temporary terminal is aiming to ease the airport check-in process of departing athletes only and will not contribute to the processing of incoming travellers.
Diamond Jubilee practice run
The Queen's Jubilee was expected to be a testament to the operational functionality of the improved London transportation system. The event exposed, however, the fact that many of the tube stations in the city are unable to cope with an influx of visitors to the capital, even though they were much fewer in number than the expected one million visitors to the Olympic Games. As a result, an overloaded network is expected to become an Achilles' heel for the organisers.
The poor weather conditions pose another threat to the Olympic Games. With June being one of the wettest months in the history of the UK, the rain is expected to affect the Games' outdoor events.
Above all a great sporting experience
Importantly, however, major cultural events before and during the Games, as well as a promising hotel pipeline, provide a positive outlook for inbound travel to the UK. The main benefits for London will be the infrastructure investment in transport, hotels and attractions as well as the legacy of economic regeneration and investment in disadvantaged communities in East London. With the event poised to start, the country's great sporting spirit is expected to come to the fore and overcome major hurdles, with the London 2012 Olympic Games delivering an unforgettable sporting experience come what may.
For further insights about how the Olympics will affect the UK and greater Western Europe, please check Euromonitor International's briefing.
Monday, July 23, 2012