Examination of Witnesses (Questions 160-179)
LORD COE,
MR PAUL
DEIGHTON, MR
JOHN ARMITT
AND MR
DAVID HIGGINS
9 DECEMBER 2008
Q160 Rosemary McKenna: I would rather
they had the primary contracts.
Mr Armitt: One thing we are keen
to do is try as best we can to follow that supply chain. I think
we will find a very dispersed and wide-ranging set of business
opportunities which have spread across the whole country. We should
not be misled by just the prime contracts as the headline of that.
Q161 Mr Sanders: How will you get
the spectator experience right given that this is one of the few
aspects of the Beijing Games that came in for criticism?
Lord Coe: If I may say so, it
is probably a slight reprise of what I have already said. We recognise
that for spectators we want to use the technology that is available
to us and over the next few years we shall be working to make
sure in all sorts of projects and areas of the model, like ticket
exchange, that people know what venues are available, where they
are and how they get in and the experience of the spectator once
at the venue. That is a very important matter for us. If you look
at one of the attitudinal changes emerging from this process we
have talked about, although it is not the direct responsibility
of the people who sit before you this morning it is important
that we come out of this process with more young people involved
in sport on a regular and heightened level. That was why we went
to Singapore. To make sure that youngsters both in venues and
in the Olympic environment understand sports that they probably
never even recognised or are not even on the radar screen is really
important. One area to focus on is port presentation, such as
looking at the quality of the information and technology in the
stadium and outside the venues. There are other things like ensuring
that in transportation and volunteering there is good information
and good food ranges in the Olympic Park. That is a prime consideration.
Finally, it is about making sure that our communities feel engaged
in this and that there is something for them in these Games and
the spectator experience is not just about our ticketing strategy
but the hinterland of that strategy, making sure that our train
operators look in advance at families coming from Sheffield who
want to be part of the Games and provide supersavers and all sorts
of things that make that task easier and at a more affordable
cost in terms of average disposable incomes.
Q162 Mr Sanders: When we had the
Mayor of London here I voiced my fears about people from outside
the area needing to stay over night who perhaps might be ripped
off and what policies would be in place to prevent that happening.
That could destroy the spectator experience if they felt that
more money was being extracted from them than necessary because
prices went up. Is that a discussion in which you have been involved?
Lord Coe: We recognise that that
is part of the spectator experience and it takes us back to one
of the points I made earlier about integrated planning and thinking
about the project across all our stakeholders. Clearly, that is
a key area in terms of the Mayoralty and it is for the GLA and
agencies such as Visit London to make sure that where possible
we have a range of hotel accommodation to meet all purses and
budgets. Remember that the local organising committee already
has a commitment—it was made at bid time—to ease this
burden admittedly not for spectators but for National Olympic
Committees and international federations coming to London. I think
we have 41,000 bed spaces booked and contracted for at 2004-05
prices to cater for some of the less well-heeled national Olympic
committees. Bear in mind that many of those committees, about
50%, will bring to the city fewer than 10 athletes. That is a
key area we have looked at. As for overseas spectators, building
on our community engagement programme we will look at a home stay
programme so that when we can link up visiting communities with
communities that already exist in the city—there are over
300 of them—there is a potential to ease the burden there
too.
Q163 Mr Sanders: But is there any
specific plan to prevent people being ripped off by accommodation
providers or other businesses who put up prices during the period
of the games?
Lord Coe: Reality tells me that
we are probably not best placed to make a dramatic change to the
marketplace. We would want people operating in the hospitality
area to recognise that the city is being showcased and Visit London
and other organisations are working on that.
Q164 Mr Sanders: But accommodation
can be licensed and tariffs set. That is quite a common practice
on the continent. Have you not engaged in any discussion as to
whether that may be a way of preventing it?
Lord Coe: I do not want you to
run away with the idea that we have not thought or even engaged
in conversations about this. We have very close relationships
with Visit London, as does the Mayor's office. We want to manage
it and do what we can to make this the best experience for people
outside London who visit the Games.
Q165 Mr Sanders: The Mayor also mentioned
BlackBerry-type gizmos. I have seen one of them which is manufactured
in my constituency by a company that uses GPS satellite technology.
Lord Coe: I am sure we shall be
hearing from them.
Q166 Mr Sanders: I hope so. If you
visit a zoo, say, it enables you to look up on screen more about
the habitat of a particular animal, where to find it in the zoo,
how to get there quickly and where other facilities are available.
If there was some way of hiring them out for the day, or even
giving them to people if that was possible, it would enhance their
experience significantly.
Lord Coe: You are right. There
must be the potential for the use of technology in ticketing.
In simple terms some of the technologies are already in existence
at Wimbledon for ticket exchange. We talked about the Paralympic
Games, but as an example of some of the technology we want to
bring to bear—if you are blind and rely on a one-dimensional
view of the PA system, commentators within the stadium will probably
not be enough. We want to look at how we can use technology to
advance that experience for those who are visually impaired.
Q167 Philip Davies: On the question
of technology and the aim to grant a lasting legacy for sport,
one of the suggestions that I know the shadow Minister for Sport,
Hugh Robertson, has made is that when events are broadcast on
television people should somehow be able through technology to
access information about the nearest club that provides that sport
so people have a real opportunity to go from watching it to participating
in it. Is that something that the organising committee is working
on to make sure it happens?
Lord Coe: Yes.
Mr Deighton: It is one of the
ideas we are working through with one of our sponsors in respect
to a website which would provide exactly that connectivity.
Q168 Philip Davies: We are talking
about the experience of the visitor to the Olympics which is very
important. I have no doubt at all that visitors will have a fantastic
time. My main concern is about non-visitors or non-spectators,
that is, the taxpayers who in the economic climate may feel that
the Olympics are becoming a luxury that the country can no longer
afford. How do you intend to try to reassure the hard-pressed
taxpayer in this country who will not go to the Olympics but must
cough up for them that when he loses his job, his home and money
his contribution is still worthwhile?
Lord Coe: That is clearly one
of the challenges going forward. It would be coy and naive of
me to say that it is not. In part that is why we spent so much
time in our nations and regions visits. Let me make a broader
point about the nature of this project, about business procurement
and some of the jobs now being safeguarded in parts of the country,
whether they are contracts for the building of bridges or a contract
in Gateshead for the building of the largest lock on a London
canal in the past 100 years. It is not about creating but safeguarding
jobs. If you look at the regenerational nature of it, there are
3,700-odd people on the Olympic Park at the moment, 10% of whom
were wholly unemployed before we started the project. I would
make a very strong case for saying that this is absolutely a project
that we should have at the moment given that in London terms it
could account for a significant percentage of ongoing business
activity for the next four years.
Q169 Philip Davies: If Tessa Jowell
is reported as saying that if we had known what the economic climate
would be like we would never have bid for the Games you do not
agree with that?
Lord Coe: I am not sure that that
is exactly what she said. I stick to the very clear view that
this is a project that now has more importance than it probably
did when we were bidding for it three years ago in Singapore.
The economic upside of this is extraordinary given where we are
at the moment.
Q170 Paul Farrelly: I am sure that
the Olympics will be very popular if for every £20 ticket
you get a free BlackBerry-type gizmo.
Lord Coe: I am not quite sure
we said they would be free.
Q171 Paul Farrelly: Or one relied
on it being returned voluntarily, particularly if one is from
overseas. I am sure that frisking people would present a challenge
to your budget. In terms of the other idea regarding hotel tariffs,
if you go to Paris or Rome you know where you stand; the rate
is displayed clearly on the back of the door of every hotel room.
Have you had conversations with the Mayor about injecting a little
bit of socialism into the London hotel market for the period of
the games? If it is workable for tax rates why not hotels?
Mr Deighton: I think Lord Coe
has already addressed this. The body that will take this forward
in the hotel sector is Visit London. I believe that it will work
on the basis of a voluntary code of behaviour to avoid the kind
of gouging about which you are concerned. You are right that it
is an important element of reputational risk both in terms of
domestic and international visitors. I think that Visit London
is very focused on managing that reputational risk. It will be
only a voluntary framework but it will be one with a considerable
moral imperative behind it.
Q172 Mr Evans: Perhaps we can go
into socialism in ticketing. It has been three years since we
last spoke about ticketing. How far advanced are you on that?
I know that it will be two years and a bit before the first ticket
goes on sale, but you must be more clear about it now?
Lord Coe: I will ask Mr Deighton
to answer the detail. We have appointed a Head of Ticketing and
have now gone some way down the road towards understanding what
that landscape is. Obviously, we have been in discussion with
international federations and the International Olympic Committee
and understand some of the consumer demands, how people want to
access the games and what is the second, third and fourth preference
if they cannot get tickets for a particular sport. We are conscious
that this is an operational area we must get right, but in the
past for other cities it has proven to be quite a serious challenge
and one that has led to reputational damage.
Mr Deighton: It is important and
complex. We are now working on the strategy which will be published
in 2010 and we shall start to sell tickets in 2011. Our objective,
to go back to your point about socialism, is to make millions
of tickets available at price that people can afford. It is important
not only because it feels like the right thing to do but because
if you pursue that policy you have stadia full of really committed,
shouting fans and that creates exactly the sort of atmosphere
you want at the Games. It works for the athletes and it transmits
the atmosphere round the world via television, so that is very
important. The other side of the equation is that we have a £400
million target on our revenue side that needs to come from ticketing.
We have to get the balance right session by session. The Olympic
Games have 600 different events over 17 days in 26 sports at 35
venues. You need a strategy for each one because the supply and
demand for tickets vary according to the particular event. We
are going one by one to get that strategy right. There are many
other opportunities. Some of the mass participation activities
are free, for example road cycling, the marathon, the triathlon
and sailing. Cultural events will also be going on. We have sponsored
a whole range of live sites so people can gather together and
watch things on a big screen. We will also have test events the
year before at our new venues. Those will give people the opportunity
to experience some of the Olympic feeling that is being generated.
Q173 Mr Evans: Will you dictate the
pricing level? Do you get down to that level?
Mr Deighton: Yes, in consultation
with our stakeholders to make sure we marry all the competing
objectives of raising revenue, making sure tickets are broadly
affordable by the public and making sure the events are full.
Q174 Mr Evans: Are half the tickets
still £20 or under?
Mr Deighton: Since the bid the
structure of the sports have changed. We have lost baseball and
softball which would have represented 700,000 tickets each at
£20 or under. But what we will commit to are millions of
tickets in that affordable range and will get to precise pricing
points when we get to 2010 or 2011. The broad principle is something
to which we are absolutely committed.
Q175 Mr Evans: So, half the tickets
will now not be £20?
Mr Deighton: We have not got to
the point of specific pricing.
Q176 Mr Evans: Three years ago you
were able to give me that answer but now you have moved away from
that?
Mr Deighton: We have lost 700,000
tickets which would have been priced at that level. We are working
on how many seats there are to sell. For example, one of the things
we are doing is working with the IOC for the preliminary rounds
to reduce the accredited seating and so squeeze in more people.
At the moment we are still working on how many seats there will
be for each session and going through it session by session. But
the broad principle does exist. I do not want to be stuck with
a specific price and number. We shall meet the broad principle.
Q177 Mr Evans: But is the aim that
for the opening and closing, which clearly will be prestige events,
to squeeze as much money out of it as you possibly can?
Mr Deighton: The aim is the same
in every session which is to make sure that we balance out accessibility
with revenue maximisation, but in the opening ceremony the demand
is very high and so there will be an opportunity to sell certain
seats at a significant price, as is the custom at every Olympic
Games. It is selling those at a high price which gives you the
revenue that enable you to sell other tickets at a much lower
price. That is the kind of balance on which we are working all
the time to make this work in its entirety.
Q178 Mr Evans: Do you know what the
top price ticket in pounds was in Beijing?
Mr Deighton: I cannot say off
the top of my head but it would have been in the range of hundreds
of pounds. My guess is that it would have been between £500
and £1,000.
Q179 Mr Evans: Is that what you envisage
at the moment for the opening ceremony—perhaps £1,000
for the top ticket?
Mr Deighton: We have not yet defined
a price point for the top tickets.
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