London Olympics Economic Boost Failing to Materialise

joe_blotts

"Hello London, this is the mayor, and this is the big one."
- Tannoy announcement replayed endlessly over the last month to London commuters waiting for the city's creaking transport system to cough out their train

LAST TIME the UK government backed and boosted a major export industry, we got the banking and finance crisis. This time they got smart – and spent lots of taxpayer cash in advance.


More than 7.5 million foreign tourists came to London in 2011, very nearly matching the resident population. More than a third came during the peak summer months. And given that one in twelve UK jobs "is currently either directly or indirectly supported by tourism," as the data would claim, it makes sense – if you've got none – to give it all the support you can.

Using other people's money, of course. And in return for Soviet-style ZIL lanes – cleared of plebian traffic – plus VIP seats from which to ogle the beach volleyball....

...Foreign sports fans heading for London, for instance – variously forecast around 290,000 and so needing to attend nine events each to take up the 2.2 million tickets they've been allotted – have left their bookings terribly late. The European Tour Operators' Association said last November that advance bookings for late-July to early-September were down 90% from the same period for 2011. Even now, central London hotels are reporting summer bookings down by one-third, with August "completely dead" according to a 3-star hotelier in Paddington – right next to the Heathrow-London VIP lane on the A40.

So room rates are being slashed, further denting the tourism bump. "The Olympics is still proving to be a challenge for most hotels," according to one hotelier. Because the regular tourists who would have come to the world's #2 most visited city anyway "are scared away" by the expectation of crowds and premium pricing, as a tour operators' executive says. Even theatre bookings are apparently down by one fifth from 2011....

...What about the immediate locale of the Games themselves? You might imagine that £9.3 billion – or £8.5 billion, if not £24 billion – spent clearing, rebuilding, preparing and staffing some of the UK's most depressed and deprived boroughs for the Olympic Games would have already flooded, not trickled onto the local economy.

Yet five years after the spending began, 2010 data show that unemployment across the five boroughs hosting the Olympics had risen from 6.9% to 7.7%, peaking above 9% in Newham. Nearly 18% of those people in work were making less than £7 an hour, peaking at 28% in Newham. How's that for Keynesian stimulus?




http://www.marketoracle.co.uk/Article35774.html

Yes I know this is written by some guy from a company called bullionvault so maybe he sells gold, but there's no mention of it and this really is a great read. enjoy;)

The_White_Horse

The Olympics is like the emperors new clothes. EVERY city that hosted it made a loss. Yet for some magical reason, we will be different - except we won't.

look at the stadium debacle. that was the simplest exercise ever - give it to Spurs and AEG - the biggest Club that wanted it and the successful owners of the O2 Arena.

But no, they even managed to balls that up.

How dare the IOC dictate that the running track has to stay in a stadium WE the taxpayer built and paid for once this farce is over.

Hateful.

Graham_Devon

The Olympics is a good thing for us to have.

However, uber optimism ruined the day, with the government (and other bodies) once again, completely overegging how good it would be, while anyone who disagreed was written off as a party pooper.

You HAD to be upbeat about every aspect of the Olympics, otherwise you weren't worth listening to.

Secondly, greed from the tourism industry hampered the tourism industry. Greed from private residents ruined what was a good plan to rent out houses. Greed from investors ruined what could have been so much more in terms of regeneration. Which is why you now have programmes looking at the "slums" right outside the Olympics....the slums that were supposed to see Regeneration money....but at some point in the last 5 years, this money has been removed and pocketed.

Basically everyone was looking to cream the absolute maximum from the Olympics and from all angles. Quite rightly, that's put people off coming and partaking.... the general public can't just suddenly bleed money and hand it over to people just because it's the Olympics. Yet from many who were looking to profit, it seems that's exactly what they thought would happen. Even the government expected people who don't generally have money to suddenly participate in a spending binge and all flock to pay high prices to see someone jump into a sandpit.

Even I'm getting tired of the whinging surrounding the Olympics now though. I understand peoples frustrations. Builders, Reps, even Cleaners are having to turn down jobs and void contracts, because they simply cannot get there thanks to higher traffic levels and silly Olympics lanes. So in one way, it's actually hampering peoples abuilities to earn, not providing new ones.

Put simply, we, the media and the government were far too optimistic. With the government it's always going to be different this time....but it never is. Business was far to greedy and have shot themselves in the foot. Reality is now setting in and the reality is people arriving late, or not arriving at all for regular activities. All so some bloke who throws a stick in the air can get to the field on time.

abaxas

Ask anyone who Sheffield what they think.

They'll tell you that London will be skint for the next 5-10 years.

pqrdef

I was reading about the marinas and moorings that are being provided for the yachts that will be coming.

We're used to things being a bit democratic and populist in this country. We've forgotten that in most of the world, the top people run things for their own benefit and nobody cares what the slaves think. For the Olympics, we have to join the rest of the world for a few weeks and do things their way. For some people, it'll be a brilliant party.

And it's the sort of thing London has to do to stay on the top people's map. It's vital for Britain that London continues to be one of the world's top cities, and doesn't just become a faded relic of past glories.

It costs. But we'll get over it. And look at what the Arabs and Chinese are spending.

RenovationMan

Graham_Devon wrote: »

The Olympics is a good thing for us to have.

Why?

(especially in light of the content of rest of your post)

homelessskilledworker

I think us having this Olympics is a a no brainer, but it is just pointless trying to convince some people, you either get it or you don't.

From what I can gather this Olympics has cost just under £10 Billion, and in comparision the Banks were handed £375 Billion for them just sit on and to save them from their screw up's.

Which of these would have served the people of the UK more, and given joy to so many.

RenovationMan

homelessskilledworker wrote: »

I think us having this Olympics is a a no brainer, but it is just pointless trying to convince some people, you either get it or you don't..

Are the benefits of hosting an Olympics so intangible that you can't even try?

homelessskilledworker wrote: »

From what I can gather this Olympics has cost just under £10 Billion, and in comparision the Banks were handed £375 Billion for them just sit on and to save them from their screw up's.

Which of these would have served the people of the UK more, and given joy to so many.

I'm sure not having Granny freeze to death because she made the choice to Eat or Heat when the council tax bill landed on the mat, would bring joy to some people.

I wonder what else you could do with £10bn to bring joy?

kabayiri

A commentator on Radio 5 at lunch time made 2 salient points in relation to the Olympics and economic benefits :

a) having analysed all the major recent games the economic effect is broadly neutral. Over the longer term they didn't significantly add or take away in terms of the host city economy - basically you are best to justify the games on a fun basis and other cultural assessments

b) if you want the Olympics to raise and maintain the prestige level of the host city you need to keep working at it. There are people in Sydney who are even now working at maintaining a PR legacy from their games.

This seemed a measured response and not some of the hyperbolae we get from Politicians.

FTBFun

I saw the Olympic torch relay earlier (it went past my office) and am now firmly in the mood for the Games.

The_White_Horse

i reckon saving the banks gave more people joy than seeing a few people throwing sticks and running around.

saving the banks basically stopped armageddon. most people would have lost everything. no payments, no savings etc. bad bad news.