For years, many travel people have had
nagging doubts about big-time events, such as the Olympics, and
their supposed benefits for travel and tourism.
Most of us are
inclined to believe that anything that gets people off their
couches and interested in travel is good, and in this regard there
is much good in the Olympics. But after the Games there are often
anecdotal reports about disappointing numbers, costly logistics,
high prices, bad raps and ripple effects that didnt
ripple.
All of which raises
the question: Do the cities, states and countries that host the
Olympic Games fully understand the upside and the
downside?
Evidently not,
according to a recent report from the European Tour Operators
Association.
As we reported in
our news pages last week, the association looked at the actual
results from cities and countries that have hosted the Games and
concluded that many of the benefits for tourism are overstated. We
believe this report should be required reading for destination
marketers and government policy makers.
As ETOA Executive
Director Tom Jenkins put it, the report should help all concerned
to take a more realistic view of how the Games and other such
special events affect the travel industry.
One key message
from the report is that politicians must avoid the temptation to
impose taxes on tourism in the mistaken belief that travel
companies get some sort of free ride from the Olympics and other
big events. Very often they do not.
Visitors to big
sporting events dont act and spend like typical tourists, who are
often displaced or scared away. The ETOA report said this can
disrupt the normal flow of traffic and the conveyer belt of
word-of-mouth referrals. What tourism needs before, during and
after such events is accurate measurement and smart promotion.
VisitBritain
offered an encouraging sign that it might be getting the message
when it acknowledged that realizing the tourism benefits of the
Olympics will require a properly researched strategy. Thats a
start.
Tax
targets
While were on the subject of required
reading for local governments, we can also recommend a new study of
car rental taxes by economists William Gale of the Brookings
Institution and Kim Rueben of the Urban Institute.
Their analysis,
released at the National Business Travel Association convention in
Chicago, concludes that its bad policy for local governments to
finance sports stadiums by taxing car rentals and hotel
stays.
This is a familiar
theme. Travel suppliers have long complained that their travelers
shouldnt be forced to shoulder a disproportionate share of the tax
burden for projects in communities where they have no
vote.
Whats different
about the latest study is that it was commissioned by Enterprise
Rent-A-Car, whose customers are predominately local residents, not
road warriors. According to Enterprise, taxes that affect only a
small segment of the economy, such as car rentals, can hurt local
businesses more than most cities realize.
Unfortunately, many
municipalities are attracted to such special-use taxes because
federal and state laws often limit their ability to enact more
broad-based levies, such as sales and property taxes.
Maybe this is yet
another case of government officials looking for answers in the
travel industrys pocket because they simply dont know where else to
look.