report (2007): 'the olympic and paralympic games: what can yorkshire and humber expect from 2012?

8/14/2019 Report (2007): 'The Olympic and Paralympic Games: What can Yorkshire and Humber expect from 2012?'

1/108

Jonathon Bailey BA (Hons) Business Studies

Table of Contents

1.0 Introduction .................................................................................................................. 31.1 London winning the right to host the Games ................................................. ........... . 31.2 Economic history of the Games .................................................... ....................... ...... 3

1.3 The Yorkshire and Humber Region ....................................................... ............... ..... 41.4 Yorkshire and Humbers involvement in London 2012 ........................... ....... ........ .. 51.5 Why research this region? ................................................ ........................................ .. 71.6 Aim ........................................................ ........................................... ....... ....... ........ ... 71.7 Terms of reference ....................................................... ................................ ....... ....... 8

2.0 Literature Review ........................................................................................................ 92.1 Assessing major sporting events ................................................... ....................... ...... 9

2.1.1 Economic assessment of major events .................................................. ............ 102.2.1 Tourism ............................................... ................................................. ....... ...... 132.2.2 How will tourism affect the UK economy? ...................................... ....... ........ . 142.2.2 Previous Games: ....................................................... ..................... ....... ........ .... 17

2.2.3 Mega events in UK: ................................................ ......................... ....... ........ .. 192.2.4 Summary of Tourism impact on the UK: ................................. ....... ....... ........ .. 202.2.5 How will tourism affect Yorkshire and Humber? ............................................. 222.2.6 Sport in Yorkshire and Humbers Economy: ........................................... ....... .. 232.2.7 Olympic Generated Tourism: ................................................ ........ ....... ....... ..... 24

2.3 Business Opportunities ........................................................................................... 262.3.1 How will Business Opportunities affect the UK economy? ................ ....... ...... 272.3.2 How will Business Opportunities affect the Yorkshire and Humber? .............. 28

2.4 Job Creation ................................................ ........................................... ....... ....... .... 312.4.1 Employment generated by the 2012 Games: ................................. ....... ....... ..... 322.4.2 Previous Games: ....................................................... ..................... ....... ........ .... 33

2.4.3 Yorkshire and Humber: ....................................................... .............................. 352.4.4 Summary of employment ................................................................................. 362.5 Costs of hosting the Olympics: ....................................................... ................ ........ . 382.5.1 Overview of estimated costs of the 2012 Games: .............................................. ... 39

2.5.2 Risk of over estimation: .................................................. ........................ ........ .. 432.5.3 Opportunity cost: ........................................................ ................ ........ ....... ....... 442.5.4 Displacement effects: .................................................. .................................. .... 452.5.5 Opposition to London 2012 ...................................................... .......... ........ ...... 46

2.6 Overall Impact of London 2012 Olympic and Paralympic Games .......................... 472.6.1 When will the impacts occur? .................................................. ......................... .... 47

2.6.2 The major impacts ..................................................... ........................................ 482.6.2.1 Tourism Overview ............................................... .......................... ....... ........ . 492.6.2.2 Business Overview ................................................. ........................................ 502.6.2.3 Job Creation Overview ................................................... .......... ........ ....... ...... 502.6.2.4 Costs of Hosting the Olympics .................................................. ........ ....... ..... 512.6.3 Overall estimated impact ................................................. ............... ....... ....... .... 522.6.4 Yorkshire and Humber ................................................ .................................... .. 53

3. Methodology ................................................................................................................. 543.1 Introduction ........................................................ ................................................ ...... 54

1


2/108


3.2 Research Philosophy .................................................. ...................................... ........ 543.3 Research approach ................................................ ................................. ....... ........ ... 553.4 Research Strategy .................................................... ................................................. 553.5 Secondary literature research ........................................................ ..................... ...... 56

3.5.1 Authority and Reputation of secondary literature research ........... ....... ........ .... 57

3.5.2 Limitations to the Secondary literature research ...................... ....... ........ ....... .. 583.6 Primary Research ..................................................... ................................. ....... .... 593.6.1 Data collection- Interviews .................................................... .................. ........ . 603.6.1.2 Interview sample size ...................................................... .............................. . 613.6.2 Primary data collection limitations .................................................. ....... ....... ... 623.6.2.3 Ethics and data collection ...................................................... ....... ....... ........ .. 633.6.3 Overcoming limitations to primary data collection ......................... ....... ........ .. 633.6.3.1 Interviewee Bias ..................................................... ........................................ 633.6.3.2 Availability of Interviewees ..................................................... ...................... 643.6.4 Reliability of data collected ...................................................... .......... ....... ....... 643.6.4.1 Validity of data collected .................................................... .................. ........ . 65

3.5 Chapter Summary ........................................................ ..................... ....... ........ .... 654.0 Primary Research ...................................................................................................... 664.1 Chapter introduction ........................................................ ..................... ....... ........ .... 664.2 Motivation for Yorkshire and Humber Region .................................................... .... 674.3 How much have Yorkshire and Humber spent? ................................... ....... ....... ..... 684.4 Pre-Olympic Camps .................................................. .......................................... ..... 694.5 Damage Limitation ................................................. ............................. ....... ....... ...... 714.6 Examples of benefits of previous Olympic Games ............................................... ... 724.7 Existing Examples of benefits .................................................. .......... ........ ....... ...... 734.8 Chapter Summary ................................................... ............................. ....... ....... ...... 75

5.0 Discussions .................................................................................................................. 775.1 Yorkshire and Humber do nothing scenario ............................................ ....... ........ . 775.2 Negative impact .................................................... ................................. ....... ........ ... 795.3 Potential net benefits to Yorkshire and Humbers economy through intervention ... 815.4 Piggybacking Londons success ...................................................... .......... ....... ....... 815.5 Tourism as a positive or negative to Yorkshire and Humber .............. ........ ....... ..... 83

6.0 Recommendations ..................................................................................................... 846.1 Business and Tourism recommendations ..................................................... ............ 84

6.2.1 Tourism recommendations .................................................. .............................. 856.2.2 Business recommendations .............................................................................. 86

7.0 References ................................................................................................................... 888.0 Bibliography ............................................................................................................... 98List of Appendices .......................................................................................................... 108

2


3/108


Understanding the Olympic and Paralympic Games: What can Yorkshire andHumber expect from Londons Hosting of the 2012 Games?

1.0 Introduction

1.1 London winning the right to host the Games

Nine cities were in the bidding process to host the 2012 Olympic and Paralympic Games,

on the 6 th of July 2005, London won the vote and the right to host the Games ahead of

Paris with 54 votes to 50. The British Olympic Association began the bidding process in

1997, producing the first report shown to ministers in 2000.

The British decision to use London as the host city came after successive failed bids with

Birmingham in 1992 and Manchester in 1996 and 2000. The majority of events are due to

take place in Stratford, Newham, with a huge plan in place to regenerate areas of East

London. The London bid file outlines the exact dates of the 2012 Olympic Games to

begin on 27 th July 2012 and finish on 12 th August 2012.

1.2 Economic history of the Games

Cities from around the world are increasingly choosing sport and the recent phenomena

of hosting high profile sports events as a potential growth strategy and a means to achieve

strategic corporate objectives (Bunce, 1995). Expectations of creating a financial surplus

are placed on the organising committee, with the expectation to develop the infrastructure

3


4/108


and image of the country placed on the politicians who were responsible for bidding for

the Olympic Games.

The first of the modern day Olympic Games opened in April 1896, where 300 athletes

competed in ten events representing thirteen countries in Athens, Greece. The Olympic

Games have continually developed to become the biggest and most peaceful multi-sport

event in the world. It is however since the Munich Games of 1972 that the Olympics have

experienced the greatest changes. The economic interest of host countries has become

prevalent in public debate, with the Olympics offering the host nation an opportunity to become the centre of global interest.

The increased economic performance of Games Organisers, as well as the increased

economic impact of the Games is due to a larger market, particularly for television rights

to the Games, but also because the higher costs of the Games with larger competitor

numbers and higher expectations of the quality of Olympic venues has meant that

organising committees have had to justify these costs and therefore have been driven to

increase revenues and economic impacts Blake (2005)

1.3 The Yorkshire and Humber Region

Yorkshire and Humber has a population of over five million people, which makes it

larger than over eighty of the worlds countries, including New Zealand and Norway.

Yorkshire and Humber ranks alongside the top third of the worlds economies, with a total

4


5/108


GDP of 66bn. The Yorkshire and Humber Regions proximity is approximately 200

miles from the proposed Olympic Village. Transport links to central London are very

good, with Trains from Leeds and York as fast as one hour fifty five minutes and the M1

motorway creating a direct link between the two areas.

Yorkshire has a long and proud sporting tradition, and the region has benefited from

significant investment in venues and facilities during recent years. Prior to the Olympic

bid a sporting facilities audit was carried out on the Yorkshire and Humber region by

Yorkshire Forward. The audit discovered that that the combined resources across the

region could already meet the needs of world class athletes in almost 75% of the 38

Olympic disciplines, and 80% of the 20 Paralympic disciplines.

1.4 Yorkshire and Humbers involvement in London 2012

Yorkshire and Humbers regional development agency, Yorkshire Forward, were the first

regional development agency out of the blocks to produce an Olympic bid support

document. The document outlines what Yorkshire and Humber has to offer in support of

the 2012 Games. The document describes the 2012 Games as a focus for promoting the

Yorkshire and Humber region to the world. Terry Hodgkinson, Chair of Yorkshire

Forward says I am proud to support the London 2012 and welcome the opportunity the

Olympic bid has brought to the region.

5


6/108


Martin Havenhand, former Chief executive of Yorkshire Forward, illustrates Yorkshire

Forwards motivation to back the 2012 bid in an article entitled A bid to benefit the

regions (2004). Havenhand (2004) states that While Queensland had more national

training camps than any other, the other Australian states didnt do badly either. New

South Wales hosted 36 nations; South Australia 20 nations; Western Australia seven

nations; Victoria two nations; and Tasmania one nation. This is the logic behind

Yorkshire Forward backing the London 2012 Olympic Bid. We see a huge economic

prize in our reach; it is offering an opportunity and challenge not just for London, but for

Yorkshire and Humber and for every region in the UK. Its a prize we cannot afford tomiss. In Yorkshire and Humber, we see an opportunity for real economic development

and benefits to the region, and we intend to capitalise on these by engaging the best

people, best structures, and best partnerships, both at home and abroad.

This is reinforced by Leeds Culture (2005) stating that, By engaging with London 2012

now, the region can expect to share in the economic and social boost the Games will

bring to the whole of the Yorkshire and Humbers support of the 2012 bidding process has

been reciprocated by the Local Olympic Organising Committee (LOCOG), with

Yorkshire and Humber the only region outside of London being visited by Lord

Sebastian Coe on the 2012 promotional tour in 2006.

6


7/108


1.5 Why research this region?

The regional economic strategy (RES) 2006-2015, states that The 2012 Olympics in

London will be more than a festival of sport. It will bring major benefits to the nation and

to regions. Further knock on impacts may affect distribution of infrastructure investment

and construction capacity and this needs to be closely monitored

The Yorkshire and Humber region was very enthusiastic about backing the 2012 Olympic

Games bid and remains firmly behind the 2012 Games. However with very little research

into the potential benefits of the Games to the region, it is necessary to conduct research

in order to understand what Yorkshire and Humbers economy can expect from the 2012

Games. May (2005) states that there has been very little research into the benefits and

problems of mega events.

1.6 Aim

To understand the affects of the 2012 Olympic and Paralympic Games, with particular

focus on what aspects of the Yorkshire and Humber economy may be affected.

7


8/108


1.7 Terms of reference

To realise the potential 2012 Games opportunity to the UK economy

To understand what aspects of the Yorkshire and Humber economy may be

affected by the 2012 Games

To understand what would happen should Yorkshire and Humber not invest in the

2012 Games

To realise the potential net benefits of the 2012 Games, based upon past Games

and predictions

To provide recommendations based on evidence, as to how Yorkshire and

Humber can maximise opportunities resulting from the 2012 Games.

8


9/108


2.0 Literature Review

This section of the dissertation identifies published work relating to the area surrounding

the research question, with the purpose of identifying theory behind the impact on non

host cities before, during and after major sporting events.

2.1 Assessing major sporting events

Sporting events can be described as major by virtue of their size in terms of; their

attendance, target market, level of public financial involvement, political effects, extent

of TV coverage, construction of facilities and impact on the economic and social fabric of

the host community (Hall, 1992). The Olympics certainly constitutes the title of a major

sporting event, having continually developed to become the largest and most peaceful

multi-sport event in the world.

Chalkey and Essex (1999), describe how; Mega sporting events are used as catalysts of

change and development at local and national level as a key instrument of development

policies. One of the key development policies of any regional or national government is

economic growth. Dodouras & James, (2004) reinforce the economic benefit of hosting

mega events stating that Mega-sport events have a wide range of effects; i.e. economic,

political, commercial, physical, socio-cultural and psychological.

9


10/108


11/108


attributed to the staging of a major sporting event. This figure factors in money spent on

hosting the major event and money that is retained within the host nation.

However Armstrong and Taylor, (1993) disagree stating that; The evaluation of the

impacts of any mega-sporting event is a complex and difficult task and it involves far

more than simply estimating its potential revenue and expenditure, other parameters such

as the number of jobs created have to be factored in. Hayes (2001) points out that

although the Atlanta Games presented profits in its budget, there were no real long term

benefits to the city after the Games, thus deeming the Games unsuccessful.

Bowdin et al (2006) point out that When looking at the economic impacts of major

events it is important to realise events have a range of impacts both positive and

negative. This study focuses on the economic factors of hosting a major event, with

figure 2.0 highlighting the potential economic factors.

Figure 2.0 (Adapted from Hall 1989)

Positive

Destination promotion and increased

tourist visits.

Higher Yield Increased Tax revenue

Business Opportunities

Commercial Activity

Job Creation

Negative

Opportunity Cost

Inflated prices

Exploitation

Community resistance to tourism

Financial loss

Financial management

11


12/108

Effects on economies hosting major sporting events are realised not just in the year of

hosting the event, but also the years before and after the event. Blake (2005) highlights

the importance of Analysing the full impact of hosting the 2012 Games (in terms of both

benefits and costs) as possible. Blake discusses that the impacts should be grouped into

three categories: pre-Games, during-Games and post-Games:

The pre-Games impact takes into account;

The construction phase (Olympic village, facilities etc)

Other pre-Games costs (Security, advertising/promotion etc)

Visitor impacts in the run up to the Games (pre Games tourisms)

The during-Games impact consists of;

Revenues from staging the Games (Merchandise, increased spending etc)

During-Games visitor impact (Tourists, spectators etc)

Cost of staging the Games (Staff, security etc)

The post-Games impact;

Legacy visitor impacts (repeat tourism due to Games)

Legacy infrastructure impacts (fixed assets such as stadiums)

As previously discussed by Armstrong and Taylor (1993), an increase in income and

costs to an economy (Primary impact) are not the only factors that will effect an

12


13/108

economy. When looking at the economic impacts of a major event, Bowdin et al (2006)

points out three clear areas that need to be addressed (secondary impacts); The effects of

tourism, Business opportunities, Commercial activities and Employment creation.

2.2.1 Tourism

Tourism can be a catalyst to stimulate investment, revitalise deprived areas and

encourage growth in other employment sectors. The Olympics and other major sporting

events can develop high profiles for host cities and are claimed to be good for attracting

future tourists long after the event has been staged (Masterman 2003, p. 460). Price

Waterhouse Cooper, responsible for the feasibility study of the 2012 Games pre-bid,

states that tourism is the only sector that can benefit from the Olympics during all three

stages, pre, during and post Olympics.

This section of the report will focus on a variety of aspects of Olympic tourism that will

affect the UK economy. Preuss (2004) illustrates three important aspects of Olympic

Tourism;

The spectators in the stadium create the atmosphere that the television audience

notice unconsciously and that also make the Olympics one of the sport events

most highly sort after. This aspect is important to attract television audiences and

high television rates which increase the revenues from selling the television

rights.

13


14/108

Foreign tourists create a significant part of the economic impact during the

Games. Based on hotel capacity, accessibility and availability of tickets the

number of tourists is different from Games to Games. The more foreign tourists

that visit the country, the bigger the economic impact.

When tourists return home from the Games, stories about their experiences trigger

off a multiplying effect of visitors by changing the perception of friends and

relatives about the host city and country in general. That may motivate them to

visit the country and increase post-Games tourism.

Preuss (2004) illustrates that although tourism can generate direct income to an economy,

tourism is a major factor in generating legacy effects of the Olympic Games. Carlsen and

Williams (1997) reinforce this stating that the long term benefits to tourism from

increased awareness and enhanced tourism image are far more significant than the short

term effects from the event itself.

2.2.2 How will tourism affect the UK economy?

Hanson (2007) of Visit London states that Tourism is of huge, and often underestimatedvalue to the economy; in London alone it supports 280,000 jobs, and annual visitor spend

is at the 15 billion mark - 10% of Londons GDP. It will be responsible for the majority

of economic benefit to the nation following the Games. As Londons tourism industry is

14


15/108

more developed than many previous Olympic cities, the 2012 Games give the capital a

chance to reach a broader audience than almost any other host city.

The economic impact to the UK economy of the 2012 Olympic Games is dependent on

the number of foreign tourists, because they bring new money into the economy.

Krajasits (1995) states that the total number of tourists heavily depends on the

attractiveness of the region and other conditions such as the political and economical

situation. As Hanson (2007) points out Londons tourism industry is more developed that

many previous Olympic cities, and therefore has the capacity to cope with potential high

demands. Roaf et al. (1996) points out that it is difficult to predict tourist figures,

however three different reports published show a varying degree of the impact of the

2012 Games on tourism; VisitBritain (2004) predict at least 2 billion for the visitor

economy, the Department for Culture Media and Sport (2007) identify a slightly less

amount, indicating a benefit to the UK tourism sector of between 1.4 billion and 2

billion and PriceWaterhouseCoopers (2005 ) highlight that the expected impact on

tourism, expressed as an overall change in Gross Value Added over the period 2005-

2016, was a lower figure: 762 million across the UK

A report commissioned by the ETOA (European Tour Operators Association, 2006)

entitled Olympic Report, generates debate as to whether the 2012 Games will in fact

benefit the UK tourism industry. The report focuses on the reality that the audiences

cited for such events as the Olympics are exaggerated. This point is reinforced by Preuss

(2004) who states that It must be assumed that most figures in pre-Olympic forecasts are

15


16/108

over estimated. The true number of foreign visitors to the Olympic Games is probably

only between 400,000 and 800,000. This can be demonstrated using the Sydney Games

as an example, where Sydney had expected 487,000 visitors of which 132,000 were

expected to be Olympic specific, and in reality only 53,000 overseas visitors arrived

above the average (Australian Bureau of statistics, 1999-200).

The ETOA report highlights the issue of displacement of tourists stating that the arrival

of Olympic Tourists, Athletes and Officials effectively scares off normal tourists.

Regular tourists assume the congestion and increased prices are a feature of mega events.The ETOA report highlights the anecdotal evidence of tourists being scared off through

evidence of the Atlanta Games in 1996. Owen (2005) illustrates that in 1996 hotel

occupancy in Georgia fell from 72.9% in 1995 to 68% in 1996 despite the Olympics.

French et al (1997) states that many hotels and restaurants reported significantly lower

than normal sales volume Even shops in areas up to 150 miles away reported slower

than normal business during the summer of 1996.

This point is extended highlighting the significantly different spending patterns of

Olympic tourists. Blake (2005) states that Olympic visitors are not interested in tourism

they are interested in sport. They tend to spend money on leisure and entertainment, and

when not at the stadia they watch events on the TV rather than engaging in other

activities.

16


17/108

2.2.2 Previous Games:

When attempting to understand the potential impact of tourism in the UK due to the 2012

Games, it is necessary to reflect on some of the previous Olympic Games to gain an

understanding.

Barcelona 1992:

Barcelona is the best example of modern day Olympic cities where the legacy of the

Olympics has been positive. Figures by Visit Britain (2004) show that the Olympic

Games in 1992 generated an estimated $16.6bn for the Spanish economy, between the

years of 1986-1993. Prior to the Olympic Games in 1992, tourism accounted for only 1-

2% of Barcelonas GDP, now the post Olympic GDP is represented by 12% generated

through tourism. Papanikos (1999) comments that the fact that many consider the

Olympic Games of 1992 as being a catalyst that changed the tourism prospects of the city

is justifiable and demonstrates the important impact Olympic Games can have on

tourism.

17


18/108

Sydney 2000:

The Sydney Olympic Games of 2000, are said to have generated over $4.5bn in tourism

export earnings between 1997 and 2004 (Tourism Forecasting Council, 1998). The events

of September 11 th have made studies into legacy impacts hard to be proven, as there was

a world wide recession which impacted significantly on the tourism industry. Sydney saw

visitor numbers for 2000 as a whole up by 11% on 1999 and 1.6 million Olympic

motivated visitors over 1997-2004, spending US $3.5 billion (Australia Tourism

Commission, 2002). When assessing the London legacy, unforeseen impacts need to berealised as they can result in a substantially less than predicted forecasts.

Athens 2004:

Prior to the 2004 Games in Athens Papanikos (1999) estimated that over the fourteen

year period; before, during and after the Games, the Greek economy would benefit by

$10.6bn due to tourism in Athens. Papanikos (1999) also estimated that during the

Olympic year GDP would rise by 1.4 per cent due to Olympic tourism. According to the

culture minister in charge of Athens 2004, Visitors to Greece were up by 13 percent in

2005.

18


19/108

2.2.3 Mega events in UK:

Although the UK has not hosted the Olympics for over 80 years, it is possible to reflect

back on other mega events that have been hosted within the UK;

Manchester 2002 Commonwealth Games:

1 million people visited Manchester in the Games period; these visitors brought 29

million into the local economy during the Games year. Inbound visitor numbers to the

city increased from 550,000 in 2001 to 590,000 in 2002 and 740,000 in 2003. Hotel

occupancy increased by 6% in 2002 and revenue per room by 17.5%. (ETOA, Ensuring

tourism is the winner 2005)

Euro 1996 Football Tournament:

Euro 96 attracted over 280,000 overseas visitors, providing the eight host cities with a

cash injection of around 120 million (ETOA, Ensuring tourism is the winner 2005).

19


20/108

2.2.4 Summary of Tourism impact on the UK:

Having studied a variety of sources it can be concluded that there is considerable

uncertainty surrounding the impact of the 2012 Games on tourism. VisitBritain (2005)

calculates that there is a potential benefit of at least 2 billion for the visitor economy

from overseas visitors, plus an even greater benefit to the domestic visitor economy. The

department for Culture Media and Sport (DCMS) identify a slightly less amount,

indicating a benefit to the UK tourism sector of between 1.4 billion and 2 billion. An

Olympic Games Impact Study commissioned by DCMS (2005) from

PriceWaterhouseCoopers report that the expected impact on tourism, expressed as an

overall change in Gross Value Added over the period 2005-2016, was a lower figure:

762 million across UK, 146 million of which would occur during the events

themselves.

The official estimate is that London is expected to achieve a permanent tourism effect of

an additional 2% and 3% in international tourism arrivals over the 2006-2011 and 2012-

16 period respectively. There is also an upside to this estimate with the legacy impact

rising to 8% in the high scenario (Department for Culture Media and Sport).

Preuss (2004) states that It must be assumed that most figures in pre-Olympic forecasts

are over estimated. The true number of foreign visitors to the Olympic Games is probably

only between 400,000 and 800,000. It has to be assumed that the projected financial

20


21/108

benefits to the UK are over estimated, as this has been the case in the majority of

previous Games studied.

Evidence shows that there is a need to be cautious as to the degree in which tourism will

benefit the UK economy. Previous Olympic Games have highlighted displacement of

normal tourists by that of Olympic tourists. The Atlanta Games demonstrate this

negative impact with French et al (1997) stating that many hotels and restaurants

reported significantly lower than normal sales volume Even shops in areas up to 150

miles away reported slower than normal business during the summer of 1996

Major events held in the UK in the past few years include the Commonwealth Games and

the European football championships. Both of these events generated a net positive gain

in tourism with the Commonwealth Games generating a 29 million cash injection and

the European football Championships generating a 120 million positive impact through

tourism (ETOA, Ensuring tourism is the winner 2005).

21


22/108

2.2.5 How will tourism affect Yorkshire and Humber?

Yorkshire and Humber Tourism:

Tourism is critical to the success of the urban and rural economies of Yorkshire and the

Humber. It is estimated that the regions tourism sector is worth over 4 billion each

year, and accounts for approximately ten per cent of the regions total employment.

(Yorkshire Tourist Board, 2005).

The tourism sector in Yorkshire and Humber is diverse, ranging from relatively un-

developed areas to internationally-renowned tourist and day visitor destinations, holiday

and business destinations, and rural and urban destinations. The important role of tourism

within the economy of the region was highlighted clearly during the foot and mouth crisis

in 2001, when visitor levels declined considerably on previous year levels. (Yorkshire

Futures, 2002)

Figure 2.2.5 highlights Yorkshire and Humbers performance in comparison to other

region with regards to foreign tourism; it highlights that only Northumbria and Cumbria

attracted fewer foreign tourist visits in 2000. Yorkshire and Humbers market share of

overseas tourism spending is particularly small. In 2000, Yorkshire and Humber only

captured 2.3 per cent of total overseas tourism spending in England. (Yorkshire Futures,

2002). With the range and quality of tourism product in Yorkshire and Humber, there

appears to be significant potential to improve the regions market position

22


23/108


24/108

Sport generates 2.5bn in annual turnover and 940m in annual value-added in Yorkshire

and Humber, this accounts for about 1.5% of the regions economy. Sport generates

571m in annual household incomes, mainly in Commercial Sport and Commercial Non-

Sport. (The Value of the Sports Economy in the Regions, 2003)

2.2.7 Olympic Generated Tourism:

Tourism is highlighted in the Yorkshire and Humber Regional Economic Strategy (RES)

2006, which states the London Olympics in 2012 will provide opportunities for this

region in tourism, construction, sports development and training camps.

The large number of international visitors to the Games presents a key opportunity to

lever long-term growth in international tourism for Yorkshire and Humber.

The 2012 Olympic Games will bring together a huge number of participants and even

more people in their support teams. The Games will attract an abundance of spectators,

tourists and volunteers from all over the world, with many more spectators watching via

television.

The economic and social benefits to host cities from hosting the Games have been well

researched. However, most studies of major sporting events concentrate on the benefits to

the host city, rather than the surrounding regions. A key reason for this may be that

events have had very specific and local regeneration mandates (e.g. Barcelona), with no

24


25/108

broader geographical development objectives. (East of England Development Agency,

Economic impact assessment of 2012 Games, 2006)

There is little evidence of the economic impact to non-host regions from previous

Olympic Games; however the Sydney Games demonstrate some benefits to non-host

regions. For instance, regional New South Wales experienced some business and tourism

benefits from the Sydney Games. In order to identify the potential benefits learned from

previous Olympic Games, Yorkshire Forward, the regions regional development agency

has teamed up with Queensland in Australia to realise the impact of the 2000 Games onthat region. Yorkshire Forward has commissioned a piece of joint research activity with

Queenslands Gold Coast City Council to asses the economic impact of the 2000 Sydney

Olympic Games on the Gold Coast. (Yorkshire Forward, 2007).

The Games will undoubtedly influence the region in a range of tourism matters.

Yorkshire Forward estimates an additional economic benefit to the region of 600

million. This is based on projected figures of 2,500 extra overseas athletes and officials

being based in Yorkshire for pre-Olympic preparation and training camps (London 2012

Olympics, Leeds City Council 2007). Using figures from the regions only other

experience from hosting a large number of athletes, the World Student Games 1991; it is

possible to gain a clearer understanding of the potential tourism benefits to the region.

Foley (1991) produced a report entitled A case study of the World Student Games and

Sheffield, which highlights that 1700 athletes over two weeks of the student Games

25


26/108

would result in estimated visitor spend of between 3.4million and 4.3million,

depending on the multiplier used. Visitor spend in 1991 of 4.3million, based on an

average rate of inflation of 1.5% equates to 5.2million in 2006. As Yorkshire Forward

predicts 2500 athletes to be based in the region, this equates to 147% of the 1700 that

attended the Student Games and spend by athletes alone can be estimated at 7.6m.

2.3 Business Opportunities

Major events can provide their host communities with a strong platform for showcasing

their expertise, hosting potential investors and promoting new business opportunities

(Bowdin et al. 2006).

26


27/108

The Department for Trade and Industry (2005) describe the 2012 Olympic Games as a

unique opportunity for showcasing UK capability in new technologies such as low

emission vehicles, intelligent transport systems and low carbon energy technologies. The

DTI, through its innovation programmes, is working with LOCOG to develop a

technology vision for the Games.

The procurement phase of the 2012 Games is due to begin from the middle of 2007 up to

and beyond 2012. The Olympic Delivery Authority (ODA) and the London OrganisingCommittee of the Olympic Games (LOCOG) are the organisations responsible for

awarding contracts to successful businesses.

2.3.1 How will Business Opportunities affect the UK economy?

The 2012 Games are a massive project and offer a unique opportunity for UK businesses

either directly as contractors, as part of the supply chain or indirectly by benefiting from

the overall boost to the UK Economy. According to Ellis (2006) Capital expenditure for

London 2012 is expected to total 9.9 billion. The majority of this sum (72%) is allocated

for improving transport infrastructure. Expenditure on Olympic facilities will total 2.7

billion. In addition, it is estimated that the Games will boost the rate of economic growth

in London by an average of 0.5% per annum.

27


28/108

According to the East of England development Agency (2006) procurement and

business opportunities from the 2012 Games for the whole of London and the UK are

estimated to be valued at over 3.8 billion.

The Prime Minister said: "The economic benefits are clear. An Olympic Games hosted in

London would create significant opportunities for companies up and down the UK in

sectors as diverse as construction, tourism, merchandise, catering, design and IT.

Sandra Nori (2005), a Minister with the NSW Government in Australia which financedthe Sydney 2000 Olympic Games, states The contracts and procurement opportunities

for UK companies are enormous, the experience from Sydney showed that New South

Wales business won the equivalent of 400million in contracts for the Games, over

115million from regional companies with 55,000 people receiving employment related

training. And Queensland businesses won the equivalent of 150million worth of

Olympic Games related business.

2.3.2 How will Business Opportunities affect the Yorkshire and Humber?

Yorkshire and Humber has a strong economy with Gross Value Added (GVA) increasing

to 14,928 per head in 2007 which is a considerable 5% rise on the previous year. This

28


29/108

5% rise mirrors that of the national average, with Yorkshire and Humbers GVA per head

87% of the England average (Government Office, 2007).

Yorkshire and Humber business VAT registrations in 2004 averaged 32 per 10,000

resident adults compared to a UK rate of 39. There were 131,390 businesses registered

for VAT in Yorkshire and the Humber at the start of 2005 an increase of 1,745 over the

previous year. This represented 7.2% of VAT registered businesses in the UK and 8.4%

of the England total (Government Office, 2007).

Business Survival Rates in Yorkshire and Humber indicates that 69.8% of businesses

now survive at least 3 years. This is 2.4% percentage points above baseline, and more

significantly, has now risen from below the England average (68.8%) to above it

(Government Office, 2007).

Modeling by Blake (2005) points to the potential for a negative impact on the region's

GVA from the 2012 Games. A key issue is a drain of activity from the region to London,

with less activity taking place in the region.

Businesses in the Yorkshire and Humber will potentially be able to benefit from

procurement and business opportunities emanating from the London Games.

The largest procurement opportunities will be offered in the area of construction. It is

estimated by constructionSkills and SummitSkills that the construction of the 2012

29


30/108

Games will involve 2.8 billion of work (constructionSkills 2005). This includes the

construction of the venues at Stratford for the 2012 Games, as well as the refitting after

the event for their legacy uses.

In addition, there will be direct business opportunities for firms offering goods and

services to tourists attending the Games. Such opportunities include catering, transport,

accommodation and retail. There will also be opportunities to businesses training people

in Olympic related skills, including vocational training providers and universities (EEDA,

2006)

Terry Hodgkinson, Chair, Yorkshire Forward (the Yorkshire & Humber Development

Agency) said: "There is everything to play for. By preparing now, everyone wins. In

Yorkshire and the Humber over the last twelve months our focus on the Bid has already

led to a number of benefits. These include new partnerships, a greater understanding of

the possibilities such major events hold, and a more strategic approach to being ready to

grasp those opportunities. These are benefits that are unrelated to hosting the Olympic

Games but have been inspired by our bid for them."

The exact size of the opportunities for each industry is uncertain, with procurement for

the Games at an early stage. Nevertheless, it appears to be clear that the largest

procurement opportunities in economic terms will be in the construction industry. The

greatest overall business opportunities are likely to be in the tourism industry through

hosting teams in pre-Olympic training camps.

30


31/108

2.4 Job Creation

Preuss (2004) highlights that the overall economic effect of the Olympic Games have on

a host city can be expressed not only by the increased income but also by the employment

generated by the Olympics. This section of the report attempts to highlight through

published texts the effect of the 2012 Olympic and Paralympic Games will have on

employment and subsequently on the economy. The issue is the extent to which hosting

the Olympic Games generates employment and how long it is sustained.

Bowdin et al (2004) points out that by stimulating activity in the economy, expenditure

on events can have a positive effect on employment. However Faulkner (1993)

highlights that It is easy to over estimate the number of jobs created by major events in

the short term, because demand for additional services is short lived.

The Olympics have the potential to create higher labour costs in various sectors through

employment opportunities. KPMG Peat Marwick (1993) investigated the labour market

for the Sydney 2000 Games and discovered that bottlenecks might appear in some

professions (for example, physiotherapists), pointing out that if a sector experiences an

economic boom, higher labour costs are likely to be the consequence. Preuss (2004)

indicates that the Munich Games of 1972 led to bottlenecks in the Schleswig-Holstein

labour market, which caused high labour costs.

31


32/108

The Olympic Games has the potential to create an opportunity cost in the labour market,

with the Games creating an opportunity that may draw labour away from other markets

into those associated with the Games. Braun (1984) however states that all new Games-

related jobs are directly or indirectly filled by unemployed people. He assumes that at

the end of each job rotation chain an unemployed person will be employed (Braun, 1984).

Braun (1984) believes that the employment of unemployed persons even increases the

gross national product through the additionally produced goods and, thus, has a positive

effect. Plath (1973) counteracts this argument stating that the payment of

unemployment relief is a mere financial state transfer affecting the welfare criterion notin an allocative but in a distributive manner.

2.4.1 Employment generated by the 2012 Games:

Official estimates come in the form of a report commissioned by the Learning and Skills

Council (LSC) entitled Employment and skills for the 2012 Games (2006) estimating

that the Games will generate:

32


33/108


34/108

improvements and boosting employment. However, some literature also highlights

negative impacts, such as crowding out and displacement of other investment. The

amount of new jobs attributed to Games ranges widely, from 6,300 in Manchester to

77,000 in Atlanta to 445,000 in Athens. Determining why these employment figures

differ so greatly is difficult due to the incompatibility of methods used to estimate the

numbers in the first place.

The figure 2.4.2 below highlights the average duration of employment and the effect in

percentage the 1996 and 1984 Games had on employment in the host regions. It can beestablished that the Tourism sector was the only sector to benefit significantly in the long

term, with other sectors either not benefiting at all, or having short term effects.

Figure 2.4.2

Sector Average duration of job Atlanta 1996 Overall LA 1984

Primary

Effect in % effect in %

Service Short-term 35 35

Tourism Long/Medium-term 18 41

Trade Short-term 11 3

34


35/108

Administration Medium/Short-term 10 0

Building Sector Medium-term 4 8

Security Short-term 3 0

Transport Long-term 3 0

Organisation Medium/Short-term 1 0Leisure Long-term 1 0

Telecoms Long-term 1 0

Others 13 13

(Source: Preuss 2004)

The 2002 Manchester Commonwealth Games was estimated to have generated 6100 jobs,

of which 2400 are additional jobs in Manchester (Cambridge Policy Consultants, 2002).

From this figure it is possible to state that 3700 jobs were generated outside of

Manchester.

2.4.3 Yorkshire and Humber:

41,700 people are employed in sports-related activities in the Yorkshire and Humber

region which makes up 2% of all employment in the region. This figure is higher than the

proportion for England as a whole which is 1.75%. 19,600 of these jobs are in the

Commercial Non-Sport sector 13,700 people are employed in Commercial Sport,

including 5,600 in spectator sport, 3,600 in participation sports, 2,700 in retailing and just

500 in sports-related manufacturing. (The Value of the Sports Economy in the Regions,

2003)

35


36/108

Sport therefore makes a contribution to the regions economy, although slightly lower

than the average for England as a whole. A substantial proportion of this relates to the

sale of sports goods and sport related products. The softer economic benefits of sport

(quality of life, social interaction, improved health and fitness etc.) are not as easily

quantified in financial terms. (EEDA 2006)

However new employment and business opportunities in London are likely to increase

net commuting out of the Yorkshire and Humber region, temporary and/or permanent

regional migration and business relocation.

Some sectors may experience declines as resources are diverted away from their sectors.

Sectors that experience declines (manufacturing) do so because they gain little or no

direct benefit from construction activities or the tourism legacy effect but compete for

similar labour (and therefore have to pay higher wage rates than they would otherwise

do). (EEDA 2006)

2.4.4 Summary of employment

Preuss (2004) highlights that it must be kept in mind that even short term employment is

beneficial to an economy.

36


37/108

The LSC (2006) point out that; in general, the literature on recent Games reports that

they have had some positive economic impacts on their host cities, such as an enhancing

international reputation, galvanizing infrastructure improvements and boosting

employment. However, some literature also highlights negative impacts, such as

crowding out and displacement of other investment.

There is no literature to suggest that employment opportunities in Yorkshire and Humber

will be directly affected by the 2012 Games, however there are opportunities that could

arise resulting in enhanced employment opportunities in the region. If for exampleYorkshire firms win business contracts for the 2012 Games, it could result in jobs in the

region to work on the contracts. Also should the Yorkshire and Humber region be

successful in hosting training camps prior to the Games, employment opportunities will

arise.

It has to be noted that hosting the 2012 Games could bring about negative affects for the

Yorkshire and Humber region. As new employment and business opportunities in

London are likely to increase net commuting out of the Yorkshire and Humber region,

temporary and/or permanent regional migration and business relocation. A report by

EEDA (2006) also illustrates the potential for; Some sectors to experience declines as

resources are diverted away from their sectors. Sectors that experience declines

(manufacturing) do so because they gain little or no direct benefit from construction

activities or the tourism legacy effect but compete for similar labour (and therefore have

to pay higher wage rates than they would otherwise do).

37


38/108

Official figures however highlight the Olympic Games will generate; 60,000 person years

of employment in construction, 30,000 jobs in staging the Games and 6,700 jobs in

showcasing London (LSC 2006).

2.5 Costs of hosting the Olympics:

Mega-events such as the Olympic Games require large sums of public money to be

spent on improving venues and infrastructure. It is important to understand how the 2012

Olympic and Paralympic Games are to be financed, and realise the estimated cost to the

38


39/108

UK economy. This section of the report highlights studies into the costs of hosting

Mega-events, with the aim of realising the pottential risk that the Olympics could bring to

both the UK and Yorkshire and Humber economy.

2.5.1 Overview of estimated costs of the 2012 Games:

The budget for running the 2012 Games outlined in the candidature file was 1.5bn,

which with inflation is now regarded as being 2bn (London Candidate File, 2004).

LOCOG state that It is absolutely our expectation to be able to contain the budget

(London 2012 Olympic Games and Paralympic Games: funding and legacy, 2007).

The costs of running the 2012 Games are broken down in the following table (Figure

2.5.1) taken from the London Candidate File (2004):

Figure 2.5.1

Figures in Candidature File

(Expressed in 2004 prices) Percentage of budget

39


40/108

Sports venues 261 million 17%

Information systems 204 million 13%

Games workforce 117 million 8%

Ceremonies and culture 57 million 3%

Transport 124 million 8%

Paralympic Games 90 million 6%

Administration 159 million 10%

Contingency 66 million 4%

Remaining costs 460 million 31%

The cost to the UK economy comes in the form of the finances that are required to payfor the 2012 Games and infrastructure. The London Candidate File highlights where the

2bn is to come from in figure 2.5.2:

Figure 2.5.2

2004 Sums Percentage of overall revenue

International Olympic

Commission contribution

& worldwide sponsorship 562 million 36%

Local sponsorship 272 million 18%

Official suppliers 181 million 12%

40


41/108

Ticket sales 310 million 20%

Licensing 57 million 4%

Other 156 million 10%

The costs of running the Games are separate to those for building the venues and

infrastructure, and redeveloping the land for the Olympic Park. The Games are privately

funded, the venues and Park costs are met largely by public money.

On 15 March 2007 Tessa Jowell announced a budget of 3.1bn to cover building the

venues and infrastructure for the 2012 Games. An additional contingency fund of 2.2bn,

security and policing costs of 600m, VAT of 800m and elite sport and Paralympic

funding of nearly 400m.These figures total 9.345 billion, resulting in the most

expensive Olympic Games ever (Cost of Olympics, BBC 2007).

According to LOCOG (2007), the funding for this budget breaks down as: 63% from

Central Government; 23% from National Lottery ; and 13% from the Mayor of London

and the London Development A gency. It can therefore be established that the cost to the

UK economy breaks down to, extra Taxation (1bn) and loss of Lottery good cause

donations to other projetcs (2.2bn) (Nathan and Kornblatt, 2007)

41
http://en.wikipedia.org/wiki/March_15http://en.wikipedia.org/wiki/2007http://en.wikipedia.org/wiki/Tessa_Jowellhttp://en.wikipedia.org/wiki/National_Lotteryhttp://en.wikipedia.org/wiki/Mayor_of_Londonhttp://en.wikipedia.org/wiki/LDAhttp://en.wikipedia.org/wiki/March_15http://en.wikipedia.org/wiki/2007http://en.wikipedia.org/wiki/Tessa_Jowellhttp://en.wikipedia.org/wiki/National_Lotteryhttp://en.wikipedia.org/wiki/Mayor_of_Londonhttp://en.wikipedia.org/wiki/LDA


42/108

Blake (2005) highlights the way in which the Olympic Games are financed as a concern

to the host nations Economy. Blake states that debts are balanced against the acquisition

of infrastructure, there is no guarantee that the actual value of the infrastructure matches

the level of debts incurred, if for example the infrastructure includes press facilities and

miles of high-tech cables linking press centres with stadiums, much of which may not be

used again

42


43/108

2.5.2 Risk of over estimation:

Jenkins (2006) illustrates how over estimating potential revenue and underestimating

costs from the Games can affect a host nations economy. Jenkins states that Financial

risks associated with hosting the Games were demonstrated by Montral 1976. Montral

Mayor Jean Drapeau declared: the Olympics can no more have a deficit than a man can

have a baby. Montral proceeded to incur a budget deficit of over $1 billion. Over the

past thirty years, staging costs have varied, but typically the final figures have far outreached initial estimates. Total costs for Athens 2004 escalated from 3.2bn to

6.3bn.

Blake (2005) states that Over optimistic pre-Games evaluations are criticised. This can

be in terms of the numbers of tourists that are expected because of the Games, their average spend, an over optimistic assessment of the proportion of ticket sales purchased

by non-residents, or because the construction impacts are over estimated.

Flyvbjerg (2005) reiterates this point stating that Mega events like the Olympics are very

complex, and it is very hard to predict costs with 100 per cent accuracy. As such, budget

overruns of 50 per cent or more are common.

43


44/108


45/108

opportunity cost of hosting the 2012 Games, with UK residents set to give up the

opportunity of other benefits in place of hosting the 2012 Olympic and Paralympic

Games.

2.5.4 Displacement effects:

A potential cost to the UK economy is the effect of displacement in the economy. A

report by ETOA (2006) highlights the effect of displacement on an economy stating that

During the Olympics, a destination effectively closes for normal business. The

repercussions are felt before and after: both tourists and the tour operators that supply

them are scared off immediately before and during the events. This absence then

creates its own effect, as the normal conveyor belt of contented customers begetting new

arrivals has been broken.

Blake (2005) picks up this point as a critique to hosting the Games stating Tourists who

would normally arrive during the Games period are discouraged from visiting because of

the perception of high prices and congestion caused by hosting the Games, and for the

same reasons residents are encouraged to leave the host region for the duration of the

Games.

As well as displacement of tourists there is also the potential for displacement of business

activity. Blake (2005) highlights that activities are displaced as a consequence of the

45


46/108

Games, as businesses that are positively affected by the Games are able to pay higher

wages and take workers away from other activities.

2.5.5 Opposition to London 2012

The London Olympic Organising Committee (2004), point out that at present There is no

organised public opposition to hosting the Games in London, and the bid has strong

public support both in London and across the UK. In previous Years several Olympic bids have been criticized by campaign groups such as Bread not Circuses, Australia

Anti-Olympic Alliance and Whistler Olympic Info (Preuss 2004).

The London School of Economics (LSE) carried out a piece of research to understand

whether Britain actually wanted the Olympic Games. The results showed that annualmean willingness to pay was 22, 12 and 11 (or 220, 120 and 110 over 10 years) in

London, Manchester and Glasgow respectively - implying that the UK as a whole would

be willing to pay roughly 2 billion (LSE, 2005). This 2 billion equates to that of the

original amount required for running the 2012 Games by LOCOG, and reflects

willingness by residents for the UK to host the 2012 Games.

46


47/108

2.6 Overall Impact of London 2012 Olympic and Paralympic Games

2.6.1 When will the impacts occur?

The impact on the economy over time is represented in figure 1.0 below, where Preuss

(2004) illustrates the potential extent of the net benefits occurring from the Olympic

Games, and when they are likely to happen.

Figure 2.6.1

(Source: Preuss 2004, page 38)

Figure 2.6.1 illustrates that in the past a strong single impact occurs during the Olympic

year, which is typical for any other major sporting event (Rahmann and Kurscheidt, 2002,

p. 185). Preuss (2004) however points out that this peak is not always as positive as

politicians like to point out, as in economies experiencing strong positions during the

47


48/108

Olympic year, crowding out effects are likely to occur. However if the economic

position is relatively poor, hosting a major event such as the Olympics would be wise, as

the peak will better the national economy.

The UK can expect this form of impact with a steady initial up until the Olympic year,

when a huge increase in spending will generate a large impact on the economy. When the

Olympics have finished there will be a decline at a similar rate to that of the rise prior to

the Olympics, followed by a period of around ten years of legacy.

During the pre-Olympic phase Blake (2005) believes that the UK economy will be

impacted by the construction phase (Olympic village, facilities etc), the pre-Games costs

(security, advertising and promotion) and the post-Games tourism impact. Blake (2005)

states that the UK will benefit during the Games from; the revenues from staging the

Games (merchandise, increased spending etc), Olympic Games visitor impact (Tourists,

spectators etc) and the costs of staging the Games (staff, security etc). Blake (2005)

discusses that the post-Games impact will be made up of the legacy visitor impacts

(repeat tourism due to Games).

2.6.2 The major impacts

The author has broken down the anticipated impacts of the 2012 Games into four

sections, Tourism, Business opportunity, Job creation and Costs.

48


49/108

2.6.2.1 Tourism Overview

Masterman (2003), states that The Olympics and other major sporting events can

develop high profiles for host cities and are claimed to be good for attracting future

tourists long after the event has been staged.

The Department for Media Culture and Sport predicts that the UK tourism sector will

benefit from the Olympics in financial terms from between 1.4 billion and 2 billion.

These figures include legacy affects and run over a twelve year period from 2005-2017.

Yorkshire Forward estimates an additional economic benefit to the region of 600

million, based on projected figures of 2,500 extra overseas athletes and officials being

based in Yorkshire for pre-Olympic preparation and training camps (London 2012

Olympics, Leeds City Council 2007). There is little evidence of the economic impact to

non-host regions from previous Olympic Games, however Yorkshire Forward, has

teamed up with Queensland in Australia to realise the impact of the 2000 Games on that

region. At the time of this report no research has of yet been conducted.

49


50/108

2.6.2.2 Business Overview

Major events can provide their host communities with a strong platform for showcasing

their expertise, hosting potential investors and promoting new business opportunities

(Bowdin et al. 2006).

According to the East of England development Agency (2006) procurement and

business opportunities from the 2012 Games for the whole of London and the UK are

estimated to be valued at over 3.8 billion.

The exact size of the opportunities for each industry within Yorkshire and Humber are

uncertain, with procurement for the Games at an early stage. Nevertheless, it appears to

be clear that the largest procurement opportunities in economic terms will be in the

construction industry. The greatest overall business opportunities are likely to be in the

tourism industry through hosting teams in pre-Olympic training camps

2.6.2.3 Job Creation Overview

Preuss (2004) highlights that the overall economic effect of the Olympic Games have on

a host city can be expressed not only by the increased income but also by the employment

generated by the Olympics. Bowdin et al (2004) points out that by stimulating activity

in the economy, expenditure on events can have a positive effect on employment

50


51/108

Official estimates come in the form of a report commissioned by the Learning and Skills

Council (2006) where it is estimated the 2012 Olympics will generate; 60,000 person

years of employment in construction, 30,000 jobs in staging the Olympics and 6,700 jobs

in showcasing London.

The 2012 Olympics are likely to have a negative impact on the Yorkshire and Humber

region, due to the diversion of labour directly to London. There have been no official

figures as to the effect of employment in the region due to the Olympics, as much will

depend on how many contracts the region wins, and whether or not any pre-Gamescamps will be based in the region.

2.6.2.4 Costs of Hosting the Olympics

Blake (2005) illustrates that tax revenues are needed to pay for the Games, which meansthat those required to pay higher taxes to finance the Games may lose out. In a study by

LSE (2005), it states a need for a rise in taxation, in order to fund the Olympics, therfore

every tax payer is subject to the oppurtunity cost of an expected amount of 22 pounds in

tax per year.

LOCOG state that 63% of the 9.345bn will come from central government, this reflects

5.88bn coming from central government funds. This money that will be spent on the

2012 Olympics could be used for funding other projects such as health care or education,

reflecting a high opportunity cost of hosting the Olympics. Blake (2005) highlights the

51


52/108

Games must be diverting public investment from other more worthwhile investment

projects, such as health and education

2.6.3 Overall estimated impact

Blake (2004) concludes that the London 2012 Olympics would have an overall positive

effect on the UK economy, with an increase in GDP over the 2005-2016 periods of

1,936 million and an additional 8,164 full-time equivalent jobs created for the UK. The

impacts are concentrated in 2012 (1,067 million GDP and 3,261 FTE jobs) and in the

post-Games period 2013-2016 (622 million GDP and 1,948 additional FTE jobs).

Blake concludes that the impact of the Olympics on the UK is unlikely to be negative -

the change in GDP has a probability of 84.4% of being positive, but that larger risks exist

in the pre- and post- Games periods, largely because of the high levels of uncertainty of the legacy effect.

52


53/108

2.6.4 Yorkshire and Humber

Yorkshire has relatively limited experience of attracting major events as defined as those

generating more then 1million pounds of revenue. A challenge for Yorkshire is to

identify the skills needed to bid for and attract major events to the region and to deliver

them successfully. (Malcolm Brown 2006)

Based on Australian figures from its 2000 Olympic Games, Yorkshire Forward estimates

that the net benefit to the Yorkshire and Humber region will be a boost of 600m,

however with no intervention this would turn into a negative impact of 264m.

Peter Box, chair of the Yorkshire and Humber Assembly states that The benefits to

Yorkshire and Humber will be far-reaching and long lasting - now we must all work

together to ensure some of the major events surrounding the Games are brought to our

region, as well as offering teams taking part some of the country's best training facilities.

53


54/108

3. Methodology

3.1 Introduction

Methodology is the analysis of, and the rational for, the particular method or methods

used in a given study (Jankowicz, 2000)

This chapter begins by identifying the approach to research. The methods used to obtain

secondary data are then highlighted, identifying the sources used to obtain the

information. This section the finishes with the primary research method being identified,

pointing out the reasons for selection and the limitations of the research method adopted.

3.2 Research Philosophy

The author adopted a phenomenological philosophy to research; Saunders et al (2003)

describe this philosophy as the relationship between the meaning and the interpretation

given. According to Saunders et al (2003) the phenomenological researcher aims to

discover rather than prove a hypothesis, gathering qualitative data from relevant source.

This method was chosen in place of positivism which, according to Saunders et al (2003)

would result in law-like generalizations similar to those produced by the physical and

natural scientists. Positivism would require a structured methodology, (Gill and Johnson,

1997) with results that lend themselves to statistical analysis.

54


55/108


56/108

considerable ability to generate answers to the question why? As well as the what and

how questions a case study can also be a source for new hypothesis. Robson (2002)

states that exploratory studies are a valuable means of finding out what is happening; to

seek new insights; to ask questions and to assess phenomena in a new light. The

exploratory case study approach is consistent with the phenomenological philosophy

adopted by the author. This philosophy allowed the author to utilise a semi structured

and qualitative approach to research.

3.5 Secondary literature research

Secondary literature is defined by (Kervin, 1999) as compiled data that has received

some form of selection or summarising. Due to the nature of the study, the secondary

literature search and review was used to enhance and develop the subject area. The

secondary literature search provided a source to devise questions in order to fulfill theresearch aim and terms of reference.

The secondary literature search and review enabled the author to identify key sources of

theoretical information, creating an overview of the current predictions and estimations

for the success of the 2012 Olympic and Paralympic Games.

The author began the literature review by focusing on the area of study; however the

research strategy adopted allowed for a wider area of study to be analysed. The flexibility

56


57/108

of being able to read around the subject enabled a thorough understanding of the subject

area, with questions being identified for the primary research.

The secondary research created a thorough understanding of the subject area through

using sources such as; academic texts, newspapers, academic journals and government

publications. Yorkshire Forward Regional Development Agency provided a great deal of

the sources that were available.

3.5.1 Authority and Reputation of secondary literature research

Secondary literature was collected from a variety of sources that the author deemed to be

reliable and trustworthy; examples including, Yorkshire Forward Regional development

Agency, The Christel DeHaan Tourism and Travel Research Institute, The London

School of Economics and The department for Trade and Industry.

The researcher was aware that the internet is unregulated and as such applied a degree of

caution when retrieving reports, journals and articles through making sure they had

copyright statements. Dochartiagh (2002) suggests that by identifying a copyright

statement it will improve the chances of validity.

As the author used a number of reports, it was important to pay careful attention to how

the data was analysed and how the results were published. Patzer (1996) points out that

the further away from the original data, the more difficult it is to judge the quality.

57


58/108

Saunders et al (2003) states that measurement bias resulting from deliberate distortion is

difficult to detect. The author chose to triangulate suspected reports with other findings,

which enabled for a cross check verification of the source.

3.5.2 Limitations to the Secondary literature research

The author discovered that there was very little secondary research specifically focused

on the subject area of the regional impact. The author discovered that the majority of

information of previous Olympic Games focused on the host city, with very few

examples stretching as far as regions within the host nation. The literature therefore had

to be adapted and related to the regional impact, through examples of other events hosted

and documented evidence of regional impacts of these events.

As the 2012 Olympic and Paralympic Games are not due to take place for a further fiveyears, the preparation is still in its early stage and as such predictions that have been

made now are susceptible to change with unforeseen events in the future. The author

fully acknowledges that all secondary sources are liable to become dated as new sources

are produced with new figures and information.

58


59/108


60/108


61/108

relevance to the Yorkshire and Humber region. As the interviews were conducted after

the collection of secondary research, the author had an extensive knowledge of the

research topic, which aided in the understanding of participants viewpoint, as well as

stimulating discussion.

Interviews were mostly conducted face to face, however due to time and financial

constraints some interviews were conducted over the telephone. The sample profile, with

details of interview times and locations, can be found in appendix 1,2 and 3.

The author used a dictaphone to record interviews where possible, with notes also being

taken in short-hand type format, that were later written up into more detailed notes.

Swetnam (2000) states that it is important to give some thought as to the recording of

data collected. The use of a dictaphone and notes prevented any chance of there being

any loss of information gathered.

Oppenheim (1992) states that one of the key advantages of using interviews is that the

interviewer can clear doubts and avoid misunderstandings.

3.6.1.2 Interview sample size

As the nature of the research topic is relatively specific, there were only certain

individuals that were relevant to the research study that could be interviewed. The author

adopted a sample size of (???/) which was deemed relatively small. It is important to

61


62/108

realise that all of those that have been interviewed have a direct role in Yorkshire and

Humbers strategy to bring success of the 2012 Games.

3.6.2 Primary data collection limitations

The semi-structured interview technique adopted by the author required greater skill in

interpreting the qualitative results and checking whether or not answers could be deemed

relevant. Swetnam (2000), points out that the less structure the greater the skill is

required for interpretation and the greater the potential for interview bias.

The primary concern of the author was that bias may occur; in order to make the regions

decisions look favorable. Saunders et al (2003) states that measurement bias resulting

from deliberate distortion is difficult to detect; the author was keen to remain aware of

this.

The limitation of cost and time meant that further interviews could not be carried out, that

may or may not have been of more use in filling the information gaps generated through

the secondary literature research.

62


63/108


64/108

difficult. The non-formal approach adopted to the by the author when carrying out the

interviews, allowed for the interviewee to express opinions without contestation from the

author, resulting in honest personal answers. The interview utilised the structure of the

interviews, probing further for detail where appropriate.

3.6.3.2 Availability of Interviewees

As a number of the interviewees are in high profile positions within public and private

organisations, there availability was very limited. In order to combat this, the author

adopted an approach whereby they were contacted via the telephone at pre-arranged

times to conduct the interviews. This eradicated the need to meet up and allowed the

interviewee more flexibility to carry out the interview at convenient times.

3.6.4 Reliability of data collected

The primary research was conducted in order to collect new reliable and valid

information, abiding by ethical standards, in order to fill gaps generated through

secondary research

Robson (1993) describes reliability as being threatened from bias by the author and

interviewee and errors in interpretation. The author overcame the threat of bias (see

3.6.3.1), and was prepared in order to prevent any errors in interpretation.

64


65/108


66/108

4.0 Primary Research

4.1 Chapter introduction

The author conducted interviews having completed an extensive search of existing

literature, with the aim of filling gaps of information that had been realised.

The author conducted 3 interviews in a semi structured nature, with public sector

employees currently managing 2012 Olympic projects. Full details of the sampling

method can be found in the methodology chapter, 3. Detailed notes resulting from the

interviews can be found in appendix 1, 2, and 3.

This chapter presents the authors key findings from the primary research that has been

conducted, having completed a detailed qualitative analysis. The analysed results are

presented under the question headings that the interviewees were asked to answer,

discussions referring back to literature are made where appropriate.

66


67/108

The interviewees were all members of the Yorkshire and Humber Scrutiny board for the

London 2012 Olympic Games. The details of those that agreed to be interviewed are

liste

report (2007): 'the olympic and paralympic games: what can yorkshire and humber expect from 2012?

Documents