Olympics is a tourism problem

One of the benefits claimed for the Olympic Games is a boost in tourism to the host city. This boost, according to data obtained by the European Tour Operators Association (ETOA), is wholly illusory. Indeed there are indications that the impact of the Olympic Games is detrimental.

ETOA has looked at visitor arrival statistics for the past Olympics in Beijing (’08), Athens (’04), Sydney (2000), Atlanta (’96), Barcelona (’92), and Seoul (’88). While some of these games saw a peak in demand during the games, all saw a major disruption to their normal tourism market and none revealed any conspicuous tourism growth.

The latest data from Beijing is particularly striking. From the spring of 2008, international visitor arrivals to Beijing plummeted, and in the month before the Games, they were 30 percent down on the previous year. In the months after the Games, the tourism slump continued with international arrivals more than 20 percent down.

The data needs to be seen in context. 2008 was not a strong year for tourism in the whole Asia Pacific region, but Beijing fared considerably worse than the rest of China: demand for mainland China may have fallen by 2 percent, Beijing lost 18 percent of it prior years total.

Over the past two decades, tourism has grown consistently on a worldwide basis. As a consequence, one would expect most cities to show tourism growth year on year. For the Olympic cities, tourism growth tends to be stalled and the stall becomes most apparent when a comparison is made with competitor destinations.

For example, in the five years prior to the Olympics, Australia’s and New Zealand’s tourism was growing at the same rate but Australia’s growth lost ground significantly straight after the Olympics.

It is clear that the Olympics did not materially help Australian tourism, or if it did, it made very little difference. Sydney’s even underperformed against the rest of Australia. The situation became so pronounced that Australia ran an advertising campaign to promote itself as a destination with the now infamous slogan “Where the bloody hell are you?”

Tom Jenkins, executive director, ETOA said: “Every city is unique, and each city handles the Olympics in its own way. But we have yet to have a games where tourism has not been disrupted and disrupted in a way that causes real harm. Even in the case of Athens, where they carefully restricted new capacity, there were considerable losses before and after the games both in the capital and throughout Greece.”

For London, the news from Beijing is concerning. Last year, London had nearly 15 million visitors, bringing in over £8 billion. It is already bracing itself for an influx of atypical visitors during the games, whose spending habits are not those of usual tourists. If London followed the pattern of Beijing, it could see over 2.5 million fewer visitors at a loss of £1.5 billion.