the impact of the 2012 olympics on tourism in london - final

8/19/2019 The Impact of the 2012 Olympics on Tourism in London - Final

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The impact of the 2012Olympics on tourism in

London

Members:

Ting-Yu Tung S3028860

Roxana-Georgiana Apostu S3029204

Gemma Gaya Torras S3024040

Number o !or"s !it# reeren$es% 4&'4'Number o !or"s !it#out reeren$es% 3&636


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Table of contents

Problem Statement

Introduction

1. About the Olympic Games

1.1. What are the Olympic Games?

1.2. Why cities are interested in hostin the Olympic Games?

1.!. Why Tourism is a rele"ant factor in the Olympic Games?

2. Tourism in #ondon in 2$12

!. The o"erall effect on %ritish economy

!.1. %udet and financin of the Games

!.2. &o' does the tourism affect the %ritish economy?

!.!. (omparison of #ondon)s G*P from 2$11 to 2$1!. Why did the results emere in

this trend?

!.+. What is the economic effect of hostin the Olympic Games on ,.-?

indins and conclusions

/eferences

Problem statement

Every 4 years the Olympic Games are celebrated in a different country. To know which

country will host the Olympic Games there is a competition between countries to get the

candidature. One of the main reasons of why countries want to host this competition is because

of the great impact that the city will have. For this reason London presents a candidature in order

to host the Olympic Games of !" which payed off and London was able to host the Games in

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that year. London is a city that is well known worldwide# being famous even before the

Olympics. $n this paper we will analy%e the changes on tourism that this country has e&perienced

as a conse'uence of hosting the tournament.

(e are going to study this problem statement through the following research 'uestions and

sub)'uestions*

/esearch 0uestions

". +ow does a ma,or sport event can affect the tourism of the host country-

. (hat is the overall impact on ritish economy-

Sub0uestions

". /oes the rate of tourism increases during or after the Olympic Games- 0(e know that

London is well known all over the world# so its popularity increased now-1

. (as it worth hosting the Olympics for the city-

This research paper will be developed in the following way. First an introduction of what we

are going to study followed by an e&planation of what are the Olympic Games. The second part

is an analysis of how a big sport event affects the tourism in London. The third part is a study of

the Olympic Games impact on the ritish economy and in the end# a conclusion based on our

findings.

Introduction

This paper consists in a study of the !" Olympic Games and the way that they affect thetourism and the ritish economy.

The !" Olympic Games were celebrated between the 2 of 3uly to the " of ugust of !" in

the city of London# 5nited 6ingdom.

London won the candidature to host the !" Olympic games on the back of three factors

each of which factored in the concept of legacy7 a1 its status as a global city with one of the

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world8s most culturally and ethnically diverse populations7 b1 its focus upon regenerating one of

the poorest areas of the city# which is on)going# where the Olympics have a specific role to play

in providing a legacy of amenities for local people7 c1 a focus upon children as the benefactors of

the Olympics# and the inspiration that could link nations through sport. 0ob /igby# !""1

9ince the moment of the designation of London as the host country for the !" Olympic

Games# the economy of the country and their image of the world started to change. The

government provided capital from public funds for the celebration of the event and also the city

adapted their infrastructure for the upcoming events. The Games also have an economic impact

on the e&penditures and employment in the host city.

The Olympic Games are one of the events more televised and awaited every 4 years. The

host city will have huge e&penses and will be affected in the tourism aspect in many ways# as

research has shown that in the short run the Olympic Games are damage for the tourism but in

the long run there is a positive recovery in this aspect.

1. About the Olympic ames

1.1. What are the Olympic Games?

The Olympic Games are multidisciplinary sporting events where athletes from all around the

world participate. The Olympic Games are also used to demonstrate to the world that countries

can leave their differences behind even if there are political# economic or cultural conflicts and

compete with effort to try to win the Olympics.

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9econd 9tage* during the Olympic Games* impacts related to revenues and costs from

staging the Olympic Games and tourism Third stage* post)Olympic* includes legacy visitor and infrastructural impacts 0lake#

!!:1

(e can observe in the following figure that there are more positive than negative legacy in the

city*

Even though there are many effects of the Olympic Games to be discussed# in this paper# we

will focus only on tourism and the impact of the Olympics regarding touristic activities and

spending.

(

$i". 1 % Positi&e and ne"ati&e le"acy in literature re"ardin"

the impact of the Olympic ames on the hostin" country


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1.'. !hy Tourism is a rele&ant factor in the Olympic ames#

$n the tourism aspect# the city is beneficiated with a big flow of tourist persons that came to

see the games. There are different groups of tourists that will affect the economy as we can see

in the following figure.

$i".2 (ele&ant "roups )hen considerin" &isitor e*penditure durin" me"a+e&ents ,-ource: Preuss 200a: /2

s we can see in Fig. # only e&tentioners# event visitors and home stayers create true

positive net changes in economic activity according to the economic impact analysis whereas

runaways and cancellers reduce net economic activity by causing opportunity cost. The rest of

the categories are only important if they change their consumption during the event. 0;reuss#

!!:1

2. Tourism in London in 2012

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London is the third most visited city in the world# well ahead of its main rivals such as Aew

Bork# ;aris# msterdam# arcelona and Come# attracting around D! million visitors from other

countries each and every year. ;eople travel here from every corner of the globe to admire

Londons many impressive monuments# e&plore the richly vibrant culture of the city and perhaps

take in a theatrical performance in the (est End.

$n addition# a total of roughly > million overnight visits are made to London each year# and

these overnight visits are mostly made by people living in other parts of the 5nited 6ingdom.

Cevenues generated by tourism in London comprise appro&imately "! per cent of the citys gross

value added income# and it is pro,ected that tourists in London spend appro&imately ": million

per year. This figure includes all aspects of the tourism industry# such as

accommodation# transportation# eating out and attraction entrance fees. round "D per cent of the

people who work in London are employed by the tourism sector in one way or another. This

figure is predicted to rise dramatically as Londons tourism sector has been working hard to raise

the citys profile as an important and e&citing tourist destination. 05ncsbrp.org# !">1

$n !"# London welcomed 2.> million staying overseas and domestic visitors# generating

almost ". billion pounds in e&penditure. This e'uated to ":.: million overseas visitors in !"

spending a total of "!." billion pounds over 4.D million nights. Furthermore# LondonHs tourism

economy is estimated at ":. billion pounds# supporting D!4.!!! ,obs. 0London < ;artners#

!"D1

)

$i". ' % London o&erni"ht &isits ni"hts and e*penditure

200+201' ,-ource: London 3 Partners 201'

http://www.accessplace.com/hotels/london/http://www.accessplace.com/taxi/london/http://www.accessplace.com/taxi/london/http://www.accessplace.com/restaurant/london/http://www.accessplace.com/recruitment/london/http://www.accessplace.com/taxi/london/http://www.accessplace.com/restaurant/london/http://www.accessplace.com/recruitment/london/http://www.accessplace.com/hotels/london/


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Iisitor numbers increased year on year to ":.4> million visitors which is a healthy rise of

"."J in comparison to !"". The rise of around ":!#!!! more visitors over the twelve months is

the e'uivalent of filling two (embley stadiums. !" also saw London e&penditure rise to

"!.!@ billion which is an increase of 2.!J.This very robust boost in tourism receipts for !"#

almost two)thirds of a billion pound increase# can be linked to the strong ?D period which

includes the popular summer holiday period# but also the Olympic and ;aralympic Games.

Figures indicate that international visitors took advantage of the spectacle and atmosphere of the

Games. 0Londonandpartners.com# !"D1

Furthermore# as observed in Fig. D from above# a more substantial increase continued in !"D

in tourist visits and e&penditures which indicate no evidence of any sustained post)Olympics

+angover that other host)cities have e&perienced in the past.

etween 3uly and 9eptember >@:#!!! overseas residents completed a visit to the 56 # either

primarily for an OlympicsK;aralympics)related purpose 0watching# working or participating1#

042!#!!! visits1# or primarily for another purpose but they went to a ticketed London !" event

0":#!!! visits1. Those people who visited the 56 primarily for an OlympicsK;aralympics)based

purpose spent an average of "#:"! on their visit# double the spending of people who visited for

other purposes. This higher spend was not driven by length of stay* these people stayed an

average of @ nights in the 56 compared with an average of nights among all visitors.

0Ons.gov.uk# !">1

Cegarding overseas visits*

""#!!! of the >@:#!!! visits were made by people living in Europe# while "2#!!! were

from Aorth merica and "4:#!!! from other countries. The country providing most visits was the 59# followed by France# Germany and the

Aetherlands. Outside of Europe and Aorth merica# residents of ustralia made D#!!!

Olympics)based visits and residents of ra%il# which will host the !"> Olympic

Games# made "D#!!! visits. 0Ons.gov.uk# !">1

8

http://www.ons.gov.uk/ons/rel/ott/overseas-travel-and-tourism---quarterly-release/q3-2012/rpt-overseas-travel-and-tourism--q3-2012.htmlhttp://www.ons.gov.uk/ons/rel/ott/overseas-travel-and-tourism---quarterly-release/q3-2012/rpt-overseas-travel-and-tourism--q3-2012.html


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$i". +-ource countries of the Olympics 2012 ,-ource:))).ons."o&.u4

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'. The o&erall e5ect on 6ritish economy

'.1. 6ud"et and 7nancin" of the ames

The initial budget that the government estimated was .4 pounds when London won the bid

in !!:# but before the games started# the government increased the budget to .D. This means an

increase of >. pounds over the initial budget. 0ail Online# !">1

There is some specific unforeseen cost which wasn8t anticipated by the government and is

regarded as e&tra cost. $n total# the e&penditure is :@ million 0Telegraph.co.uk# !""1.

". Ienue security 2" million ) This security includes military# volunteers and training

scheme.. Opening and closing ceremony 4" million

D. 5nspecified money ) To enhance lighting at velodrome for TI

4. Establishment of scenery for Olympic ;ark "@ million

:. 9teelwork to finish the 'uatics =entre : million

>. The bridges and the roads in Olympic ;ark : million

2 onus to delivery =L partner D2 million ) =L is =ornerstone 9trategic Ialue Fund

$nc.

@. Operational cost* utilities# facilities and transportation DD million

$t is significant to see that this increasing budget made the basic funds have a dramatic

change. +owever# about @! million cost has been shown to alleviate the pressure of the

government.

". The cost of cooling systems for the media center @ million

. Ta& on the sale of the athletes8 village D! million

D. =ost of some construction at Olympic ;ark 4 million

!.2. 8o) does tourism a5ect the 6ritish economy#

$t is forecasted that tourism industry will contribute MD>D.4: billion to 5nited 6ingdom by

!:# following by the fastest growing trend of tourism employment from !"!. +ow does this

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*+i,,ions o S "o,,ars.

phenomenon happen- +ow will it affect ritish economy- Overall# 56 economy has been rising

since !th century. ccording to /eloitte Tourism theory# it is predicted that 56 G/; will

increase appro&imately "!J which is not that high but significantly provides D.2 million ,obs.

Out of this figure# there are >D!#!!! works for tourism industry. These employment opportunities

are created from a considerable demand* domestic# international and inbound tourism way.

Cespectively# DJ of domestic demand grows and ".:J of international one increases. The main

contribution is generated from overseas visitors out of inbound tourism which not only grows by

over >J a year but becomes the fastest growing sector in this industry. 0Thornley# !"1

'.'. 9omparison of Londons ;P from 2011 to 201'. !hy did

the results emer"e in this trend#

/on"on G1 20''-20'3

Year *mi,,ions o S "o,,ars.

20'' 430&28)3'

20'2 490&9'3''

20'3 48)&9'(6'

Table 1 % London ;P 2011+201' ,-ource: !orld 6an4 roup

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From !"" to !"#

it is clear to see that

London G/; increasesin ":J and provides

one third of work

opportunity more. The significant change can be identified as below 0(orld ank Group# !"")

!"1.

Cesearched by (TT= 0(orld Travel and Tourism =ouncil1# by !"# 56 tourism industry

increases by ".DJ and even contributed M:!.4 billion to the ritish economy. Owning !!#!!!

enterprises# 2!#!!! establishments# including ma,or world)class hotels# country house hotels#

guest houses and holiday parks# plus ""!#!!! restaurants# bars and pubs# undoubtedly# 5nited

6ingdom has been ranked as the :th largest tourism industry in the world. 0non# !">1

The outstanding performance can be traced back to some specific reasons. First of all# 5nited

6ingdom hopes to play host to the ?ueen8s /iamond 3ubilee and London Olympics in !" as

long as the country continues improving tourism rate which is its original advantage. To achieve

this goal# the Coyal Family funds almost M2!@.:" million per year to maintain their tourist

destinations and renovates infrastructures. Cegarding to the attractions# 56 is a country which

consists of vibrant city life# rich# historical building and monuments# especially the capital city#

London# remains the key spots# such as the ritish useum# the most popular site where :.@

million people visited in !"!. 0Tandfonline.com#!">7 Ons.gov.uk# !">1

esides the power of the government# ritain8s welcome is the key point to motivate

overseas tourists to reach here. Once visitors don8t feel comfortable in a foreign country# he or

she usually tends to stay shorter or even avoid traveling there ne&t time. /ue to enthusiasm and

friendly attitude of the 56 residents# the rate of welcome by natives soars more than half times

from !! to !"4. This makes the developed country become the ""th place out of fifty

destinations for welcome worldwide by !":.

s London Olympics began# .>2 million people visited ritain. $n average# one person

spent [email protected]: and stayed for 2 days. Only depending on this# 56 can gain a large amount of

revenue from the tourists8 e&penditures# as well as investment of foreign enterprises. s 2!J of

inbound travelers are willing to reach the 56 by air# this indirectly promotes tourism industry

'2

$i". / % raphic representation of Table 1 % ;P

2011+201'


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bound to the third place in ritain e&port earner ranking# after chemicals and financial service.

0gencies# T. !"1

lthough !"D G/; figure diminishes roughly MD#!!! million# due to the end of the ma,or

tournament# ritain still maintain their image by continuously improving their main industry#

including tourism# to stabili%e economy situation and be more competitive in the future.

!.+. !hat is the economic e5ect of hostin" Olympic ames on

#!!! people worked on the Olympic ;ark and Iillage# "!J out

of whom were previously out of work. +owever# one ma,or unemployment training association

guided them to the right direction. One is to develop their professional skills and the other is to

urge one8s own future prospect to be viewed differently. esides the rate of unemployment in

early !" decreases for ".J# most of e&perts are predicting that# from !" to !":# there will

be appro&imately "@#!!! additional ,obs created per year# with 2!#!!! workers who used to be

unemployed have already helped the capital city produce legacy in labor market. 0/ick and

(ang# n.d.1

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t last# foreign investment has its place for hoisting 56 economy. East London# from

=roydon to one of ritish three docks# Coyal lbert /ock# has displayed outstanding

transformation by the contracts with the overseas nations# which not only produced tens of

thousands of work but made the 56 sprint ahead in global commerce.N# acclaimed by oris

3ohnson# the ayor of London.

$n general# for the following countries aiming at hosting Olympics in the future and become

outstanding worldwide as 5nited 6ingdom did# four key points must be abided by* The victory#

strategy# delivery and legacy. ll these 'ualities are the elements of holding a successful

tournament which is the best chance to perform everything from our young generation. 0Aishio#

T.# Lim# =. and /ownward# ;. !!1

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$indin"s and conclusions

The ma,or implications of hosting the !" Olympic Games for London involve the creation

of new infrastructures that will affect the environment of the city and which will be used after

the games for the cityHs further necessity. $n addition# London was present in the social media

and telecommunication networks# positively affecting the cityHs image worldwide. The Games

can attract new investors but also influences the view of the city regarding tourism matters.

Cegarding the statistical data# from what was shown above# we can conclude that even if the

Olympics can have some negative effects on the hosting country# in terms of e&penditures and

different businesses# the numbers show that both !"# which is the year of the Olympics and

!"D# one year after# have a ma,or increase that goes up to 2J compared to previous years# in the

tourism area. This shows that ritainHs tourism industry is booming due to hosting a ma,or sport

event and that of course# despite the fact that it implies great work and preparation# this activity

has its benefits.

$n general# the effect of hosting Olympics is in a positive term. For political authority# the

Coyal Family was willing to provide a large amount of funds to establish all the utilities

associated with the tournament# although there were many upcoming e&penditures which was

unpredicted but still cannot be neglected# the government strived to undertaken to ma&imi%e the

final profit. $n terms of the ritish economy# tourists8 contribution took the ma,or place in this

related area. s the figure we have shown above# in an overall way# the spectators indeed boosted

the 56 economy resulting from the payment of tickets. Cegarding to the overseas visitors# they

really activate the tourism industry in 5nited 6ingdom.$ndirectly# to attract more foreigners in the future# whenever the ritish will hold any

competition ne&t time# this developed nation has started to put lots of efforts on developing their

cities# to upload the sightseeing and the colorful city life# which makes it continue growing

anytime.

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the impact of the 2012 olympics on tourism in london - final

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