House of Commons - Culture, Media and Sport

Select Committee on Culture, Media and Sport Eighth Report

5 THE LONDON 2012 GAMES OPPORTUNITY

London 2012 Games

60. The London 2012 Olympic Games and Paralympic Games are the subject of an ongoing inquiry by this Committee. So far we have published two reports on the preparations for the Games, the most recent being in April 2008.[94] We deliberately did not focus on the impact of the Games on tourism in our latest report, as it is a major theme of this inquiry. In our earlier report on the Games published in January 2007, we did examine the potential impact on tourism.[95] We concluded that the Games represent an opportunity to raise the profile of London and the rest of the UK, though "there may well be a need for more investment in tourism by the Government if full advantage is to be taken of that opportunity". DCMS has since stated that the Games "present the UK tourism industry with its greatest-ever opportunity".[96] It has also recently published its tourism strategy for the Games. Winning: a tourism strategy for 2012 and beyond, outlines the strategies for realising the potential tourism benefits from the Games.

61. The handover ceremony at the Beijing Games this summer will mark the start of London's four year Olympiad. It is from this point that any effects on tourism can begin to be measured, as momentum builds towards the event itself in 2012. However, the impact on tourism will not end there, as the legacy created by the Games has the potential to continue to affect the industry for many years beyond. We have considered the likely impact of the Games on the tourism industry over these two phases: the Olympiad and 2012, and the legacy period.

The Olympiad and 2012

62. 2012 is not expected to bring a massive influx of visitors to the UK. This view was shared, amongst others, by the British Hospitality Association and VisitBritain.[97] In July and August of any year, London attracts around 2-2.5 million visitors. The Olympics are expected to attract 600,000 visitors (300,000 from overseas[98]), a figure put in context by the 350,000 people that visit the Wimbledon tennis championships each year. As such, the British Hospitality Association told us that 2012 itself was "no big deal".[99] Moreover, Visit London told the Committee that previous host cities had experienced a downturn in domestic tourism during the Olympic year as visitors stayed elsewhere. It is aiming to buck this trend of displacement by communicating the message that "London is open".[100]

THE IMPACT OUTSIDE LONDON

63. The impact that the Games will have outside Greater London has attracted considerable debate. The Government has been keen to ensure that the benefits are, as far as possible, shared between the nations and regions.[101] Nevertheless, the public at large remains sceptical as to whether this will actually be achieved. In a recent survey, 73% of respondents thought that the region in which they lived would not gain any noticeable benefit from the Games.[102] This section of our report examines the potential tourism impact of the Games outside London.

64. Scotland, Wales and Northern Ireland, together with each of the nine English RDAs, have developed their own Olympic plans for realising the benefits of the Games for their regions. The Minister for the Olympics and London, the Rt Hon Tessa Jowell MP, recently told the House that "the development of tourism and the realisation of the tourism potential are critical parts of [each nation and region's] Olympic plans".[103] A Nations and Regions Group has also been set up to help ensure the whole of the UK is involved in, and benefits from, the Games. The Group is chaired by London 2012 Organising Committee Board member Charles Allen, and includes representatives from each of the 12 nations and regions.[104]

65. There are suggestions that, in 2012 itself, the areas outside London need to be prepared for a drop in the number of tourists.[105] This is founded on the perception amongst potential visitors that—rightly or wrongly—the UK would be overrun with Games-related visitors in 2012.[106] The Local Government Association reports that previous Games have had this effect: while the event stimulates new visitors, it also provides a reason for others to stay away.[107] Local authorities and marketing bodies outside the capital appear to be split on the issue of what the 2012 Games will bring. Some hope to be able to "capture" visitors from amongst those looking to escape the Games.[108] Conversely, some do expect to lose business to London during the Games themselves.[109]

66. During this inquiry, and our other inquiry into the preparations for the Games, we have heard about several potential benefits for the nations and regions. The three main opportunities are discussed in turn.

Games events outside London

67. Some Olympic and Paralympic events will be hosted outside London. For instance, football will be hosted in major stadia around the UK, while Weymouth and Portland will host the sailing events. Weymouth and Portland are already seeing the benefit of designation as an Olympic venue. Other international sailing events have been attracted to the area, as yachtsmen in the various different classes familiarise themselves with conditions in advance of 2012.[110] Nonetheless, these are isolated examples and the vast majority of events are to be held in London itself.

Cultural Olympiad

68. In its bid to host the Games, the Government set out its aspiration to develop a cultural programme to sit alongside the sporting events. Known as the Cultural Olympiad, it will run from 2008-12 and comprise three main elements:

The mandatory ceremonies, including the opening and closing ceremonies, and the Torch Relay (which is still planned despite the recent protests in London for the Beijing 2008 Torch Relay);
Large-scale projects, including a World Cultural Festival, an International Shakespeare Festival and an International Museums Exhibition;
A UK-wide cultural festival which will comprise "grassroots community projects".[111]

69. The industry appears to be broadly supportive of the concept of the Cultural Olympiad.[112] For instance, the Welsh Assembly Government believes it offers opportunities to encourage visitors to stay longer and visit other parts of the UK.[113] The RDAs hope that Liverpool's year as capital of culture in 2008 will provide a springboard for the Cultural Olympiad.[114] However, DCMS has been criticised for failing to fund the Cultural Olympiad, instead opting to provide increased funds direct to the arts industry.[115] This lack of funding has led to suggestions that it may largely comprise events that were going to happen in any case.[116] As such, it remains unclear how much direct economic benefit the Cultural Olympiad will bring to the nations and regions.

Training Camps

70. All areas of the UK were encouraged to bid to host official pre-Games Olympic and Paralympic athlete training camps. Possible benefits for the successful areas include spin-off revenue, increased community interest in the Games and favourable media coverage in the home country that they are hosting. LOCOG recently published a list of over 600 sports facilities across the UK that will appear in the London 2012 pre-Games training camp guide. The list is designed to aid National Olympic/Paralympic Committees (NOCs/NPCs) in their decisions on where to send their athletes to prepare for the Games. LOCOG is offering a financial reward of up to £25,000 for any NOC/NPC choosing to locate in the UK.[117] During our visit to the Southwest, we heard how Torbay hoped to attract international sailing teams, due to the Bay offering similar sailing conditions to the actual Games venue in Weymouth and Portland.

71. Pre-Games training camps were worth around £25 million to the Australian tourism industry in the lead-up to Sydney 2000. Estimates for the London Games suggest that the value to the UK tourism industry could be in the region of £40 million nationwide.[118] Nevertheless, a review commissioned by VisitBritain states that the local economic benefit of the camps is "likely to be much less than 1%" of annual revenue from tourism. In the Committee's report on London 2012 published in January 2007, we concluded that the principal benefits of hosting training teams will be through involving the local community rather than generating economic gains.[119] The publication of the list of sports facilities that will appear in the London 2012 pre-Games training camp guide generated substantial media coverage and it may have raised expectations beyond a reasonable level. There are no guarantees as to which areas National Olympic/Paralympic Committees will choose for their athletes, or indeed whether they will locate themselves in the UK for pre-Games camps at all.

Expectations

72. Although there will clearly be regional disparities, there is a recognition that the direct impact, if measured in terms of additional visitors directly attracted to the regions during the Games, will be limited.[120] The Wales Tourism Alliance and Tourism Society Wales claim that the tourism industry in Wales will see little or no direct benefit from the Olympic Games.[121] The British Resorts and Destinations Association said that, in areas not directly involved in Games events, local authorities are not wholeheartedly committed to realising the potential benefits, because they do not regard these benefits as "sufficiently robust".[122] The Minister accepted that there were concerns and said that she hoped to prove the doubters wrong by demonstrating a benefit throughout the UK.[123]

73. The very fact that the Olympic and Paralympic Games are hosted by cities and not countries inevitably limits the extent to which areas outside the host city can expect to benefit. From a tourism perspective, there are some limited short-term benefits to be realised outside London. However, we doubt whether these are as great, or as certain, as the Government has suggested. The principal tourism potential of the Games, in London and the rest of the UK, lies in the positive legacy that would be created by the effective promotion and delivery of a top-class Games.

NON-COMMERCIAL BRAND

74. A substantial part of funding for staging the Games—12%—is expected to be raised through agreements between the International Olympic Committee (IOC) and long-term partners—"TOP sponsors". The IOC therefore requires that steps be taken by host countries and by Organising Committees to protect the commercial gain through association with the Olympics and Paralympics which TOP sponsors expect in exchange. The Olympic rings—the most powerful symbol for the Games—are already statutorily protected in the UK;[124] further measures to protect the Olympic brand were agreed to by Parliament and are enshrined in the London Olympic Games and Paralympic Games Act 2006. In addition to the TOP sponsors, LOCOG will raise additional funds through "local" sponsorship and agreements with official suppliers. These sponsors and suppliers, which are classified according the tier of sponsorship they provide, will be permitted to use the London 2012 logo and promote their business in relation to the Games.

75. Nevertheless, the London Olympic Games and Paralympic Games Act does not preclude, under certain conditions, the development of an alternative, "non-commercial", "non-endorsement", or "community" brand. Indeed, we recommended in our first report on the Games[125] that the IOC and LOCOG should identify ways of permitting such a brand, a move which is supported by the industry.[126] We were therefore pleased to hear the Minister for the Olympics and London restate her commitment to developing a non-commercial brand when she last gave evidence before the Committee.[127] Plans for the brand, which will be called the "Inspire Mark", were announced in June 2008 and it is proposed that this will only be available to non-commercial projects and activity programmes.

76. There are concerns in the industry that the non-commercial brand is to be so heavily restricted in its use.[128] Indeed, the Minister for the Olympics and London confirmed that "winning the right to use the community brand means that you have done more than what you would do in the normal course of every day".[129] The Tourism Alliance would prefer "something you can hang on every bed and breakfast", citing the brand that accompanied the Sydney Games, "Australia 2000—fun and games", as being of great benefit to small tourism businesses. We regret that there are no plans for any brand to be generally available for use by tourism businesses. This is a missed opportunity which reduces the potential for tourism businesses to gain maximum benefit from the Games, and we urge that this be reconsidered.

Legacy

OPPORTUNITY

77. The tourism industry appears united in its belief that the legacy of the Games, rather than the Games themselves, represents the biggest opportunity for the UK. The Games are expected to generate tourism gains across the UK of around £2.1 billion over the period from 2007-17.[130] Over half of this extra revenue (£1.27 billion) is predicted to come during the post-Games period (2013-17), largely generated by higher numbers of visitors from emerging markets.[131] Nearly one-third of this legacy gain is predicted to be outside London.

78. Travelodge warned the Committee that the Government should not assume that an economic legacy from hosting the Games will be automatic. Travelodge found that, in the four years after Barcelona hosted the 1992 Games, the average annual tourism growth rate in the city was 10.3%, against a world average of 4.6%. However, average annual tourism growth in Australia in the four years following Sydney 2000 was just 1.5%, less than the world average of 2.8%. Early assessments of Athens 2004 suggest it has had little impact on tourism in Greece.[132]

79. The Games present a chance to showcase London and the UK on the world stage, and in particular to emerging markets such as China, Russia and India.[133] Taking China as an example, the UK currently has a very small share of this market, far less than that of its European neighbours. It has been estimated that there will be over 100 million Chinese tourists travelling overseas each year in the next decade, so winning a greater share of this market would be very significant.[134] It is what is done in preparation for and during the Games that will determine the Olympic tourism legacy. This will involve more than simply putting on a spectacular show.

80. It is estimated that 20,000 journalists will attend the London 2012 Games.[135] While much of the focus will understandably revolve around the sport, there will also be the opportunity to gain wider exposure of the UK. VisitBritain recognises this opportunity, and it plans to influence the media coverage by devising programmes for visiting journalists, and tailoring the image of the UK to different overseas markets. For example, it points out that "if you can get the Japanese to see Alnwick Gardens, you can play exactly to the kind of interest the Japanese have in gardening".[136] It believes that "to market Britain, to open the door [to new visitors], to build the aspiration, we think there is some value to piggybacking on the natural interest that the Olympics will create".[137]

81. We are also aware of the central role the Games is expected to play in contributing to the development of a new perception of London and UK. Perceptions of the UK overseas are often "outdated and misconceived",[138] particularly in the emerging markets: "Anecdotally we hear [people overseas] believing that London is always in a pea-souper fog and our men wear bowler hats".[139] The Olympic spotlight is seen as an opportunity to change these perceptions and present a "dynamic, welcoming, diverse and warm nation to the rest of the world".[140] The Government recently published an Olympic Legacy Action Plan, in which it emphasises the chance to showcase the UK as a "modern and vibrant destination".[141] Visit London is developing a new brand for the city which reflects the values that underpinned London's successful Olympic bid—diversity, inspiration, sustainability and youth.[142]

82. There is the potential for other less obvious tourism legacy benefits, such as renewed vigour in raising standards of quality and service. Many witnesses commented that the 2012 Games are acting as a catalyst for a step change in the performance of the industry.[143]Indeed, there is already evidence of this. In 2007, People 1st published its National Skills Strategy, which includes a ten point plan for improving the skills of the tourism workforce, using the 2012 Games as the key milestone.[144] Concerns over the quality of "welcome" in the lead-up to 2012 has led to the formation of a "Welcome to Britain" steering group.[145] It is chaired by VisitBritain, and includes members drawn from BAA, HM Revenue & Customs, Ukvisas, Ukinbound and People 1st. It aims to improve the quality of welcome both in terms of experience and perception, and its first step will be to draw up a visitor charter that will set out the standards that visitors can expect.

83. One of the major benefits of the Games, and this applies not only to tourism, is that it has provided a fixed date by which improvements are planned to be in place. As a result, it clearly has the potential to accelerate advances in the tourism industry, not least in improving quality and skills.

DELIVERING THE LEGACY

84. In 2007 DCMS consulted the industry on its tourism strategy for the Games, and its strategy document, Winning, was subsequently published. Many of the witnesses to the Committee's inquiry also made submissions to DCMS's consultation. Yet in our inquiry the Committee heard relatively little comment on the quality of the strategy. The RDAs broadly welcomed it, "not least [because] it challenges this country to up its game in readiness for 2012".[146] Travelodge was less impressed, criticising it as being "short on inspiration".[147]

85. The primary concern of the industry appears to be not so much about the content of the strategy, but rather whether there will be sufficient funding to deliver it.[148] There is a widespread belief that the cut in funding for VisitBritain (outlined in Chapter 4) undermines the strategy. The cut would not have received a warm welcome at any time but, coming as it did in the lead-up to London 2012 (and just a month after the publication of Winning), it has proved deeply unpopular.[149] The Tourism Alliance went as far as to say that it "makes a mockery of the new strategy".[150]

86. As discussed in Chapter 4, the reduced funding for VisitBritain will make it difficult for it to maintain its current operations, let alone undertake additional marketing activity in relation to the Games. VisitBritain had been hoping to match-fund any extra Olympic-related funding from DCMS with private sector income, potentially generating a total yield of £40 million.[151] VisitBritain is now concerned that the lack of additional income from DCMS will have the added impact of jeopardising its capability of bringing private investors onboard.[152]

87. VisitBritain remains hopeful that additional funding to market the Games may still be forthcoming. It told us that some previous host cities had received Games-specific funding from their national Governments, but often not until closer to the event. For instance, the Australian Tourism Commission obtained US$6.7 million from the Australian Government over four years from 1997-2000 in order to promote the Sydney 2000 Games.[153] On the other hand, Peter Ueberroth, the organiser of the Los Angeles 1984 Games, stressed that the costs of staging the Games had been met almost entirely by the private sector, without recourse to public funds.

88. The Minister of State told the Committee that DCMS's Olympic tourism strategy is not dependent on VisitBritain funding alone, citing other key considerations such as skills, quality and welcome.[154] Nevertheless, VisitBritain insists that the UK is "in a really good state for exploiting the biggest tourism opportunity that this country will have had in many, many years and that is 2012. We just simply need the tools to exploit that fully".[155]

89. It is regrettable that the Government is committed to a Comprehensive Spending Review settlement so close to London 2012 with a substantial funding reduction for the body responsible for marketing the UK overseas. We do not doubt that there are other factors which will underpin the delivery of DCMS's Olympic tourism strategy, but effective marketing of the UK overseas must be a priority. We believe that it is not too late to realise fully the tourism benefits of the Games, but a greater investment from the Government is necessary. We recommend that provision is made as soon as possible for additional funding for VisitBritain specifically for this purpose.

Other events

90. The London 2012 Olympic and Paralympic Games is not the only major event to be hosted in the UK in the coming years.[156] Glasgow was recently successful in its bid to host the 2014 Commonwealth Games, an event which is expected to generate a huge boost for the local economy as a result of an increase in visitors.[157] Glasgow already has an ambitious tourism strategy through to 2016[158] and we understand that it has also developed a strategy for the Games themselves.[159] Gleneagles, in central Scotland, will host golf's Ryder Cup in 2014. Coupled with the Commonwealth Games, 2014 is therefore seen as a year of sport for Scotland.[160]

91. Before then, Wales will itself host the Ryder Cup, at the Celtic Manor Resort, Newport, in 2010. The Welsh Assembly Minister for Heritage told us that Wales is already seeing the benefits of this. The number of golfers in Wales has increased fourfold, and the country is looking to exploit the opportunity to market Wales as a destination for golfing holidays.[161] The same year, Cornwall will host Rescue 2010, the surf lifesaving world championships, which are expected to attract around 6000 athletes.[162]

92. At a local level, during our visit to Torbay we heard about the aspiration to make it an "event driven destination", by hosting events such as an annual sailing regatta and powerboat festival. It is not alone in this aspiration. eventBritain, a dedicated events unit recently set up by VisitBritain, has identified over 1000 events that Britain can win the right to host between now and 2020. Attracting events would seem to be something that London has already mastered. On just one weekend last summer, it hosted the Tour de France, Wimbledon finals, Live Earth and the opening of the O₂ Arena. The Tour alone was reported to have generated an economic benefit in the region of £116 million.[163] Events such as this also have the potential to enhance perceptions of the UK, and attract younger visitors.[164]

93. If planned, marketed, and delivered successfully, major events can provide short-term economic benefits, together with the opportunity for a lasting legacy. We are hugely encouraged by the calibre of events that the UK is now attracting on a regular basis. In particular, we congratulate Glasgow on its successful bid to host the 2014 Commonwealth Games. These Games represent a real opportunity to maintain the momentum that we hope will be generated by a successful London Olympic and Paralympic Games. We recommend that the organisers of the London and Glasgow Games work closely together, and ensure that any lessons learnt from London are applied to Glasgow.

94 Sixth Report from the Culture, Media and Sport Committee, Session 2007-08, London 2012 Games: the next lap, HC 104 Back

95 Second Report from the Culture, Media and Sport Committee, Session 2006-07, London 2012 Olympic Games and Paralympic Games: funding and legacy, HC 69 Back

96 Ev 195 Back

97 Q 339; Q 461 Back

98 UKinbound submission to DCMS's Welcome>Legacy consultation Back

99 Q 339 Back

100 Ev 90 Back

101 HC Deb, 18 February 2008, col. 116W Back

102 BBC Inside Out Olympics survey, April 2008, http://www.bbc.co.uk/insideout/content/articles/2008/03/31/olympic_special_s13_w6_feature.shtml Back

103 HC Deb, 28 January 2008, col. 18 Back

104 http://www.london2012.com/nrg Back

105 Q 461 Back