01/08/2012
The
Daily Wail is bemoaning the "very substantial" fall in economic activity in London and elsewhere as a direct result of the limpiks. It cites "business leaders" complaining of "overblown warnings" of travel chaos, which are turning key sites into "ghost towns" and threatening Britain's economic recovery.
One should draw a veil over the source of many of these "overblown warnings", but also note that the effects observed are entirely predictable, commonly affecting Olympic venues throughout the world.
A very adequate analysis of this can be found in
The Daily Beast and there is no value in reinventing the wheel here. Among the gems is the observation that the impact on tourism during an Olympic year for a host city is not much more than negligible; often it is negative.
In 1996 in Georgia, home state of host city Atlanta, hotel occupancy rates fell from 73 percent in the previous year to 68 percent. Sydney 2000 saw hotel occupancy fall steadily as the Games approached, from 83 percent in March to 68 percent in July and August, before a modest recovery to 80 percent during the Games themselves.
The European Tour Operators Association (ETOA) established that Peking in 2008 recorded a drop of 30 percent in tourism during the July of the Olympic year compared with the same month in 2007. There was five percent decline year-on-year for August when the games were taking place, and 25 percent below in the following months through to December.
The ETOA points to a rarely mentioned consequence of hosting the Olympics: "Olympic visitors effectively scare other visitors away. Regular tourists assume that congestion and increased prices are a feature of mega-events".
With a cost of well over £9 billion, this works out at roughly £30 million each for the 302 events â four times the original budget. It was never going to be the case that the overall economic impact was going to be positive. Despite the hubris of vacuous politicians, taxpayers in general and Londoners in particular are going to be paying off the bills for decades to come.
The important thing though is that this does not take account of the opportunity costs. As we watch India struggling to recover after two days of blackouts, one might ask how much electricity generation capacity could have been bought with £9 billion â and how much it is going to cost the nation when our lights go out.
