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Effects of London 2010 Olympic games upon the Tourism, Hospitality and Events industries in the UK
Effects of London 2010 Olympic games upon the Tourism, Hospitality and Events industries in the UK
Effects of London 2010 Olympic games upon the Tourism, Hospitality and Events industries in the UK
Effects of London 2010 Olympic games upon the Tourism, Hospitality and Events industries in the UK
Effects of London 2010 Olympic games upon the Tourism, Hospitality and Events industries in the UK
Effects of London 2010 Olympic games upon the Tourism, Hospitality and Events industries in the UK
Effects of London 2010 Olympic games upon the Tourism, Hospitality and Events industries in the UK
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Effects of London 2010 Olympic games upon the Tourism, Hospitality and Events industries in the UK

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On 6th July, 2005, the UK won the bid for becoming the host country to stage Olympics Games in London for the year 2012. Such decisions have been brought forward with itself various levels of …

On 6th July, 2005, the UK won the bid for becoming the host country to stage Olympics Games in London for the year 2012. Such decisions have been brought forward with itself various levels of arguments and key analysis in the light of social and tourism theories. The possible impact of such decisions is related to be different from the viewpoint of every analyst. Some consider it to be having positive effects upon the economy such as increased tourism and international exposure to the UK, and better ties with the nations participating in an international event. On the other hand, economists and industry analysts cite it as a bad idea with more cons than pros. The long lasting effects of London Olympics could be devastating for the economy in whole. This short research paper aims to shed light on the various effects of staging these events have on the economy of Great Britain in light of tourism theories. Furthermore, it aims to develop a balance in between theories and practical approach to realistically found out the most accurate possible after effects after witnessing the historical analysis of various countries that staged Olympic Events.

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  • 1. Effects of London 2010 Olympic games upon the Tourism, Hospitality and Events industries in the UK
  • 2. Abstract On 6th July, 2005, the UK won the bid for becoming the host country to stage Olympics Games in London for the year 2012. Such decisions have been brought forward with itself various levels of arguments and key analysis in the light of social and tourism theories. The possible impact of such decisions is related to be different from the viewpoint of every analyst. Some consider it to be having positive effects upon the economy such as increased tourism and international exposure to the UK, and better ties with the nations participating in an international event. On the other hand, economists and industry analysts cite it as a bad idea with more cons than pros. The long lasting effects of London Olympics could be devastating for the economy in whole. This short research paper aims to shed light on the various effects of staging these events have on the economy of Great Britain in light of tourism theories. Furthermore, it aims to develop a balance in between theories and practical approach to realistically found out the most accurate possible after effects after witnessing the historical analysis of various countries that staged Olympic Events.
  • 3. Research – Literature Review There is a general thinking that whenever a country hosts any event at an international level, its economy gets boosted in terms of employment and foreign revenue. However the other side of the picture should always be analyzed before coming to a final conclusion. James (2006) is very optimistic about the view that the London Olympics would uplift Great Britain’s image in the world and would help in boosting the tourism industry due to pouring high levels of foreign reserves. He also mentions that in order to fully utilize the benefits of London Olympics, the country has to meet a number of challenges confronting the tourism and hospitality industry in order to meet up to the expectations. However Richard, (2006) in in his posting on the official website of the London Olympics 2012 is strictly against the view that the tourism industry would get benefits from this international event. According to a study by ETOA, those nations that stage mega international event witness a drop fall in tourism before the event begins and thereby receive no long term benefits of tourism. ETOA further said that there were trends of falling tourism rate and stagnation before the Olympic events that took place in Sydney, Seoul, Barcelona and Atlanta. Eric Cohen (1995) argues regarding the poverty of tourism theory that there are various approaches that need to be understand and to realize the after effects of tourism on the country. Adrian & Mike (2001) agree to this view that there is a dire need to develop a system that develops and helps to understand the different theories in tourism industry due to ever changing market conditions. The volatile economic effects of recession has gathered mixed views of analysts that at one side see hosting these events as a positive signal to end of recession and on the other side call it a mere politically based view of uplifting the economy. The theories are always subject to limitation, whether it be in the field of economics, or sociology. This is because theories are old and based upon assumptions and in order to understand them fully, there is a certain need to develop a conceptual framework that takes into account rigorous developments and progressions taking place in the modern field of tourism (Adrian & Mike, 2001). Most of the theories developed on tourism do not take into account the practical factors and sadly speaking no relevant or solid theory had been developed especially focused to improve the industry’s environment after the recent global recession. The UK government expects that the British tourism industry would flourish due to the fact that London is becoming an attractive spot day by day for foreigners as a result of London Olympics taking place in 2012. Tourism alliance, on their official website states that staging mega events like Olympics can boost economic growth, especially in the tourism industry. Seoul and Barcelona have witnessed themselves becoming a part of a prominent world holiday destination spot after hosting the Olympics in their respective countries. However these can be categorized as short term economic growths that have no grounding to justify the long term positive economic impact on the hosted country. Beijing hosted the recent Olympics and built a special stadium for this
  • 4. purpose. The stadium exceeded well over $1 billion when it initially boosted economic growth due to rise in employment rate and fueling growth in the tourism industry. After the Olympics were held, the country witnessed one of the worst ever impacts of this event where the stadium eventually came to be useless and thousands of workers and previously employed people now left stranded as they lost the income earning opportunities in their own country. Lessons can always be learnt from this recent example. The Beijing Olympics that took place in 2008 left the economy with severe side effects. Lee (2008) says that in order to meet the IOC’s demands after winning the bid for hosting the Olympics in Beijing, the Chinese government dis its utmost effort that it could to make it the most astonishing and remembered event of the millennium. This investment continued from 2001 to 2008, the time period China took after bidding the place for hosting Olympics; 7 years. In order to improve transportation, the government significantly increased its spending that could be witnessed from the fact that over $1.1 billion had been spent on improving the transportation alone for the country. In order for England to have more positive impacts of hosting London Olympics than negative ones, it is better that the government plays a key role in balancing its spending on improving public facilities including transportation, communication and at the same time on its own economy benefiting the residents. One key element to understand the after effects of London Olympics on its tourism and hospitality industry is very important; time factor. Most of the previous studies on Olympics were conducted after winning the bid and before hosting the event. Little had been done on the national and international level to get accurate data to realize the most authentic and true effects of Olympics, after this event had been taken place. Either the lack of political will was present due to which this study could never take place, or the infrastructure especially designed for hosting Olympics had not been in use after hosting the event. A big threat to the London Olympics can be drawn from the fact that there is no reliable set of data to study the after effects of Olympics. Olympics is an international event that is held only once in four years. Brown & Masey (2001) strongly argue that Olympics do not bring with itself any financial benefits. The 1972 Munich Olympics and 1976 Montreal Olympics witnessed financial losses of more than 850 GBP in total. However the Los Angeles Olympics and Barcelona Olympics of 1984 and 1992 respectively resulted in net benefit of roughly over 215 million in total. It is clearly evident that the benefits are not as promising as the side effects are. An input-output model has been used in order to describe in details the effects of London Olympics on the UK economy. An input output model is in the form of a matrix where major inputs and outputs of the economy get listed down along with varying levels of changes to note the different aspects of changes in production and consumption and anticipate a demand and supply theory. The IOC does absorb all debt to itself for hosting this event. Although IOC has stake in the shares of revenues for hosting Olympic Games, yet it is the responsibility of the host
  • 5. country to bear all debt and financial expenses. Considering the fact that many companies including Flyglobespan and XL airlines have gone bankrupt leaving thousands of passengers and crew members stranded as they wait to get bailed out, the UK government is confronted with many challenges in order to boost up their economy. The British government is already in the process to manage its increasing public debt by raising tax rates and cutting public expenditure. The situation is not very promising in the country but since it has won the bid for hosting Olympics, it is on the brink of getting it organized with not more than 2 years remaining to witness a mega event. George Osborne has come up with the recommendation of cutting public expenditure severely affecting the police, welfare and councils of the British economy. The Chancellor of England says to cut the welfare spending by as much as 7.1% by April. It is not clear whether these efforts are part of agreement to finance Olympic Games or just another measure to curb recession. Historical 81 billion dollars would have been cut over 4 years had been witnessed this time. It is anticipated that more than 500,000 jobs could be lost in effect of these precautionary measures to heal the rising debt of the British government, according to BBC UK (2010).
  • 6. Conclusion The paper concludes with providing mixed reviews of the London Olympics effects upon the hospitality and tourism industry of the United Kingdom. While it is not uneasy to generate roughly 2 to 3 billion GBP in revenues due to increased tourism, it also should be realized that this positive effect would never be easy to accomplish without solving the challenges with British government is confronted of. Andrew, (2007) states that the British tourism industry is anticipating bad impacts of London Olympics due to the fact that the government is doing its best in order to drastically cut its public spending. The target of a 2 billion GBP revenues could be hampered if the government keeps making and following these policies. The government is already in efforts of cutting the public expenditure on foreign marketing that does not promise any god results to the tourism industry of the UK. The benefits of hosting London Olympics by the ministers are inflated and not in real aspect anyway at all, as stated from the above mentioned article reference. The UK government has to increase its public spending or bring soft changes to its public spending cuts if it wants to boost its economic growth via tourism industry. More studies should be conducted to analyze the after effects of hosting Olympics in London. This would ensure a more transparent policy planning structure that could be adapted in order to improve the economic performance of UK. Analysis of past studies conducted upon the after effects of staging Olympics in other countries should be understood in details to devise policies that could target economic growth of the tourism industry and the economy at whole in the long run, after London Olympics gets over. Olympics have always been held debated in the light of various tourism and social theories. However the biggest drawback of theories is that they rely on pure assumptions that cannot be ignored in today’s highly complex practical business environment theories are deigned to elaborate our understanding of different concepts regarding any industry or economy, but limit our knowledge in all practical terms. Practicality needs to be taken into account at all times whenever any policy needs to be crafted. The British government now needs to spend more attention in developing its tourism industry and should spend good amount of allocated budget on this sector to make it more prominent at international level in front of the entire world. This is a massive opportunity for UK to showcase itself positively to the entire world in all aspects. However, without sound strategy and investment in tourism industry, the promising results are far from being visible down the road. Urgent attention needs to be paid to the tourism industry so that it flourishes as more and more jobs get created giving people opportunities to earn decent income.
  • 7. References 1. James, 2006. London Olympics 2010. [online] Available at http://www.caterersearch.com/Articles/2008/08/22/310164/London-Olympics- 2012.htm [Accessed 22 April, 2011] 2. Eric, 1995. Contemporary Tourism – trends and challenges: sustainable authenticity or Contrived Post-Modernity? 3. Adam, 2005. The economic impact of the London 2010 Olympics. [online] Available at http://utsescholarship.lib.uts.edu.au/dspace/bitstream/handle/2100/994/Impact%2020 05_5.pdf?sequence=1 [Accessed 22 April, 2011]. 4. Adrian & Mike, 2001. The trouble with tourism and travel theory? [online] Sage Publications: London. Available at http://webspace.ulbsibiu.ro/ilie.rotariu/html/the%20trouble%20with%20tourism%20t heory.pdf [Accessed 24 April, 2011]. 5. Lee, Choong-Ki, & Tracy Taylor, 2004. Critical Reflections on the Economic impact Assessment of a Mega-event: the case of the 2002 Fifa World Cup” 6. Tourism Alliance, 2011. London 2012: Tourism Boom or Bust? [online] Available at http://tourismalliance.com/downloads/London%202012%20(Nov%202007).pdf [Accessed 24 April, 2011] 7. BBC UK, 2010. Spending Review 2010: George Osborne wields the axe. [online] Available at http://www.bbc.co.uk/news/uk-politics-11579979 [Accessed 25 April, 2011] 8. Andrew, 2007. Tourist industry gives stark warning over London Olympics. [online] Available at http://www.guardian.co.uk/uk/2007/jan/03/olympics2012.olympicgames [Accessed 25 April, 2011]

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