The European Tour Operators Association (ETOA) has published a report reinforcing the conclusions of a study it published two years ago that hosting the Olympic Games typically stalls tourism growth.
Reports are coming in from China that newly built hotels are standing empty in the run-up to the Olympic Games. The latest data to emerge from Greece and Australia suggests that tourism to the host country is harmed even more than to the host city (as illustrated by the graph below).
Greece has failed to keep pace with its leading competitors, Croatia and Turkey, and the performance gap is widening with the growth in visitor arrivals trailing that of Turkey by more than 20%/year since the Athens Olympics.
Not long after Sydney hosted the 2000 Olympics, it famously ran a tourism-targeted advertising campaign with the headline “Where the Bloody Hell Are You?” and Christopher Brown the managing director of Australia’s Tourism&Transport Forum, said, “There’s [fewer] tourists five years after the Games than before.” Following the 2000 Olympics, visitors to Australia declined for three years in a row, while tourism to the prime competitor destination, New Zealand, continued to grow consistently.
Occupancy rates in Beijing are falling, too. With the Games less than two months away, fewer than 50% of four-star and fewer than 80% of five-star Beijing hotel rooms are booked, according to the Beijing Tourist Bureau.
As these findings seem counter-intuitive, you might wonder what on earth is going on. Tom Jenkins, ETOA’s executive director explained, “The principal problem is the impression that everything will be overcrowded and overpriced, and this blights a region.”
Also, removing visitors from a country has a detrimental effect on subsequent demand. The most important motivator for visitors is word of mouth; this sales mechanism loses momentum as visitors are deterred. Their absence is a suppression of marketing.
Tom Jenkins concluded by pointing out that what has been seen in city after city over the past Olympics, are unrealistic expectations, which are ultimately met with real shortfalls in demand. There is a need on behalf of the sponsors to justify all the money spent on the Games – and they mistakenly reach for tourism as that justification. “Inbound tourists are not the ‘pro quo’ for all this ‘quid’.”