Olympic Games: a win-win for Britain

Recent reports have suggested that the 2012 Olympic Games will not produce the legacy that many expect. However, the British Hospitality Association's chief executive Ufi Ibrahim argues that Britain will benefit hugely.

Doubts have recently been expressed about the value of the 2012 Olympic Games and the benefits they will bring to Britain and to British tourism in particular. To the hospitality industry, these doubts are mystifying.

Certainly, the industry in general, and the British Hospitality Association (BHA) in particular, are wholly supportive of the Olympic Games — and other sporting events — being held in Britain for a number of very good reasons:

• They introduce new visitors to Britain who might not otherwise have come, thus opening new visitor markets, precisely what British tourism wants. Providing their visit is satisfactory and the welcome memorable, there is every likelihood these first-time visitors will return.

• Such events raise the profile of key sponsors and supporters, such as Holiday Inn and McDonald's, with a longer-lasting benefit to their brands — and to Britain as a brand.

• Britain is fortunate in having the hotel room capacity (much of it newly built) to absorb significant additional numbers of visitors.

• It is not only hotels that benefit. British catering companies and restaurants will be serving 18 million meals to athletes and visitors during the event. It was for these reasons that London's principal hotel companies and the BHA supported Britain's bid for the 2012 Olympic and Paralympic Games and, indeed, made a key contribution to their success with a guarantee to provide the required number of rooms at the right price during the event.

• As a unique social gathering which inspires people, young and old, of all cultures, and which brings them together in the world's greatest sporting event, with massive TV coverage, the benefits of the Games will be immediate and the legacy will be long-lasting:

• Many sectors of the hospitality industry will gain from holding the Games in London — not just hotels but also the entertainment and catering sectors. The Games also reach into other parts of the country, with similar benefits there.

• The Games will give British hotel and catering companies — indeed, all service sectors — a chance to showcase what they can achieve in providing top-class facilities that will leave a long-lasting legacy. Competitors and visitors will leave knowing the British welcome surpasses that of any other Olympic destination.

• The Games have regenerated parts of London's infrastructure that would not otherwise have been touched. This is to the advantage of the capital generally but, more particularly, to the many thousands of people who will be able to enjoy and benefit from the new facilities after the Games have departed.

• The Games represent the kind of public/private partnership that is key to the industry's future sustainable growth. The association would like to see more meaningful partnerships between the private sector, other organisations and local and national government in the UK.

• The TV coverage will reach millions of people worldwide and Britain will be at its centre. How can this not be to the country's benefit?

Why the doubts?​

So why the doubts about the benefits of the Games? They chiefly arise from claims that occupancy and visitor numbers fell after the Games in Barcelona (1992), Sydney (2000), and Beijing (2008). This is true, but each city should be viewed in the light of prevailing circumstances.

In Barcelona, hotel occupancy dipped to 54% in 1994 compared with 64% in 1992 — a drop of 15% — but the economic recession which, started in 1991 and which continued into 1993, is likely to have been the most important factor in the fall.

In 1990-2000, the growth in overnight stays in the city was 104% — twice as high as any other major European city over the same period. This growth was started by the Olympics, with the city's profile raised by the event to a level that could not have been otherwise achieved. Barcelona is one of Europe's great tourism success stories.

In Sydney, visitor arrivals fell from a peak of 2.7 million in 2000 (Olympic year) to 2.3 million in 2003 — a drop of nearly 15% but, again, the period between 2000 and 2003 included the attack on the World Trade Centre, in 2001, which disrupted international travel, the collapse of Ansett, the Australian airline, and the Bali bombings.

Arrivals recovered strongly in 2004 followed by four consecutive years of record growth, peaking in 2007, only to fall back during the recession. The Sydney Games is believed to have boosted the Australian economy by A$3.3bn (£2.06bn).

Similarly, the downturn in visitor numbers to China after the 2008 Beijing Olympics coincided with the global recession. Significantly, however, numbers are returning to growth in the first half of 2010.

Visitor arrivals and hotel occupancy don't always follow a constant upward trajectory; they rise and fall to reflect economic circumstances and other factors. And they also

vary according to the size of the Olympic city.

London: leading destination​

London is one of the world's leading leisure and business destinations.

Its mix of corporate and leisure traffic is very strong, illustrated by occupancy in the capital barely falling below 80% in the period 2008/09 at a time when the recession hit the hardest. Indeed, occupancy in the peak summer months of 2010 reached 90% and over. There is every reason to suppose the Games will, in fact, reinforce this position.

In fact, London was already gearing up for an expansion of its hotel stock well before it won the 2012 Games. More than 16,000 rooms were added in the capital before 2008, in the belief that it will remain one of the world's leading tourist destinations. A further 2,500 opened in 2010 and 4,000 more are planned to open by 2012. Winning the Games has accelerated this process but hotel operators are looking well beyond 2012 to sustain this expansion.

Because of capacity constraints and the belief London will be very busy during the peak months, there will inevitably be some displacement of regular visitors in 2012. This is

already factored in. To London's advantage, however, bringing in new visitors who would not otherwise have come will be a vital part of the Games' legacy.

Experience has shown the higher profile the Games gives to cities consolidates their attraction as a tourist destination.

In the case of London, leisure visitors who may be displaced in 2012 will return in 2013. Business travellers, if they need to visit, will not be deterred anyway; they will certainly visit in 2013 and beyond.

In brief, the Games are a win-win for Britain. For the hospitality industry, this is the event of the decade. The tourism and hospitality industry stands to gain immeasurably from them. So does Britain.

• Ufi Ibrahim is chief executive of the British Hospitality Association. This article first appeared in M&C Report. To subscribe, call 01293 846578​