U.K. group finds Olympics harm, not help, host countries' tourism

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The 2012 London Olympics will be one of the most significant events in Londons history, according to the European Tour Operators Association -- but not for the tourism business.

The ETOA, the London-based sister organization of the U.S. Tour Operators Association, examined the tourism impact of the last five Olympics on their host cities. It published its conclusions in a 23-page Olympic Report loaded with graphs, statistics, footnotes and data from the last five Olympic Games.

Defying conventional wisdom, the study found that host countries do not receive a long-term tourism boost -- in fact, they often suffer from a drop in visitor numbers in the years before and after the Games.

ETOA Executive Director Tom Jenkins said the report questions prevailing beliefs in four areas: the concept of sports-generated tourism, the numbers claimed for TV exposure, the displacement of normal tourism and the impact of that displacement.

Although the findings contradict many high-profile studies that claim the Olympics are good for tourism, Jenkins said studies that show gains are usually based on projections about future events. The ETOA study, on the other hand, looks at historical data -- what has actually happened.

The language of hyperbole

According to the report, a trend of 10% growth in visitor arrivals in Australia, for example, turned into a decline two years before the 2000 Olympics, and growth remained stagnant for two years after the event. Nearby New Zealand, on the other hand, maintained steady growth throughout the decade 1994-2004.

Drawing figures from a Deloitte analysis, the report also claims that Sydneys occupancy rates fell in the months before the Games, from 83% in March to 74% in May and to 68% in July and August before the September event. The rate rose to 80% during the Games, then fell to 66.2% in December.

The ETOA also reported that claims of long-term benefits to tourism were untrue. For example, the study found that Barcelonas tourism growth since the 1992 Games was not as good as that of comparable European cities, such as Prague and Dublin.

Jenkins said, The presence of the Olympics deters regular tourists who perceive that the city will be full, disrupted, congested and overpriced.

The report also questioned widely circulated numbers for the size of the TV audience for the event. [See By the Numbers, July 17, 2006,European operators: Olympics viewer numbers are inflated.]

According to Jenkins, the purpose of the report was not to rain on Londons parade or that of other cities, but to offer a more realistic view in order to maximize whatever benefits might be achievable.

Were trying to get a debate started, Jenkins said. But he said the hyperbole employed to generate interest in the Games typically foreclosed reasoned discussion.

One purpose of the study, he said, was to ward off the impulses of politicians to impose additional taxes on tourism businesses, based on the erroneous belief that they were the primary beneficiaries of the Olympics.

Another motivating factor, Jenkins said,  was the desire to advocate an aggressive and informed marketing campaign to counter the widespread assumption that benefits from the Olympics somehow were automatic.

The heads of two other travel trade associations voiced agreement with the study.

The Olympics has not been a boon to tour operators, other than a few who provide packages for it, said Bob Whitley, president of the U.S. Tour Operators Association. The impression is its going to be too crowded. Its hard for tour operators to maintain their regular contracts with the hotels. Hoteliers get excited and up their rates to take advantage of it. When the rooms dont fill, they come back to the tour operators, but then its too late.

Bill Maloney, COO of ASTA, also agreed that the Olympics were not good for normal tourism. The average customer will find it difficult to be accommodated during the Olympics. Everything is sold out, premium-priced.

Both officials acknowledged, however, that destinations can benefit from the enhanced infrastructure, such as improvements in hotels, stadiums and highways.

Through the looking glass

Still, there are many ways to slice any set of statistics, and much of the Olympics presumed value boils down to intangibles.

Rachel Crowley, public relations manager for the Australia Tourism Commission, questioned the ETOAs interpretation of the figures. For example, the comparisons of visitor numbers between Australia and New Zealand by growth rates rather than actual visitor numbers overlooks some nuances.

If you are trying to do a comparison of Australia and New Zealand and just using international arrival numbers, youre not getting the whole picture, she said.

Australia is a country of 20 million with a mix of business and leisure travelers; New Zealand is a country of 4 million that offers almost exclusively leisure travel.

ATC conducted brand research in August 2001 to look at the Games impact on global perceptions of Australia as a vacation destination.

Our study concluded that the Olympics would further the impact of the brand by 10 years, Crowley said. That is, it would be the equivalent of 10 years of our normal marketing.

Paul Gauger, the director of public relations in the U.S. for VisitBritain, who also worked for the ATC during the years of the Olympics, contended that there are many ways of measuring value.

It is the long-term vision and long-term legacy that the Games can offer. Its not always about the number of visitors, Gauger said.

The great advantage is branding, said Crowley. While people had favorable views of Australia, they had a very shallow understanding of the country and what it has to offer. The Olympics showed the world that Australia was a modern country, Crowley said, which helped the meetings market.

While VisitBritain questioned the overarching conclusions of the report, the agency agreed that the Olympics presented an opportunity to promote but didnt give an automatic benefit. 

The agency issued a statement affirming the belief that the Games are a long-term investment in the future of Britains visitor economy. But it also acknowledged that realizing the tourism benefits of the Olympics will require a properly researched strategy and investment.

We recognize that the benefits will not just fall in our laps, said Elliott Frisby, a spokesman for VisitBritain in London. We must invest in a strategy to make sure the potentials are maximized. We must make sure we are aware of the pitfalls and challenges and be ready to leap into action as soon as we kick off the campaign in 2008.

To contact reporter David Cogswell, send e-mail to [email protected].

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