Thursday, August 02, 2012

Don't come to London - it will be too busy

They didn't, so it isn't.

The economic story of the Olympics is increasingly damning as it has become abundantly clear to many businesses in London that the net effect has been to scare off tourists from the city and to scare away the locals. The first thing that is noticed is that the public transport system and the roads are quieter than usual. The expected huge delays and overcrowding haven’t happened, in fact it is the other way round. On Monday I retimed my own commute to deal with the expected chaos, but on Tuesday found it quiet. It’s busy around Olympic venues yes, and there was awful weekend traffic in no small order because of the cycling road race both closing a whole series of roads and encouraging hundreds of thousands to head that way to watch.  Otherwise it’s grim for businesses (but a delight to walk around).

 Look at these figures

- 50% reduction in foreign visitors to London in July 2012 compared to July 2011 (European Tour Operators’ Association) 
- 4.5% reduction in retail footfall in the West End in July 2012 compared to July 2011
 - 2.6% reduction in retail footfall in the East End (where the games are) in the first few days of the Olympics compared to last year 
- 25% reduction in visitors to the British Museum in July 2012 compared to July 2011 
- Traffic counts in central London are down 17% on previous weeks 
- Major retailer NeXT estimates sales are down 10% in its central London shops.
-  The Licensed Taxi Drivers' Association estimates business is down 20-40%.

In short, it has been pretty much what I and others predicted. The Olympics deters as many as it attracts, as many presume prices will be inflated (and they were) and everything will be too busy. However, given that government agencies such as Transport for London have been constantly telling Londoners to make different plans and businesses were told to encourage people to work from home, take leave or avoid unnecessary travel, it shouldn’t be a surprise. People have done what they were told. 

However, politicians are in denial. Culture Secretary Jeremy Hunt said that such figures were nonsense saying that “restaurants, theatres and even cabbies who are out of pocket today will reap benefits for years to come.” according to the Evening Standard.  Yet how come the media can't find businesses outside the mall adjacent to the site that are doing well?  He's touting the obvious manufactured claim of his bureaucrats that "businesses who marketed well are doing well", yet how does he realistically think this can make up for the reduced visitor numbers?  Having taken taxes from all of these businesses to pay for these games and told many businesses to effectively cut travel to London or staff commuting in London, how dare he tell off the people who are paying for the games without the credit for it.

In a parallel story, traders at Greenwich market reported a 60% decline in trading, even though the market is located between the nearest Docklands Light Railway station and the Olympics venue, because of a huge barrier placed on the road to shepherd people from public transport to the venue. It has since been removed.
Of course a small business that takes risks based on a government funded project is always going to be taking a gamble, it doesn't help that Transport for London is still telling motorists to avoid Greenwich altogether and warning people of overcrowding stations in the area.

This follows rude prick and Sports Minister Hugh Robertson saying that businesses had “years” to plan, as if a restaurant in the West End can somehow woo hundreds of thousands of people that have been put off by constant taxpayer funded warnings to stay away. The Prime Minister continues to spout the empty delusion that the Games will generate £13 billion of benefits for the economy. 

Of course not one politician will come out and say the obvious. Hosting the Olympics never made economic sense. The Blair Government had advice at the time that said this. However Tony Blair, Gordon Brown, Ken Livingstone and their minions, and since then David Cameron, Nick Clegg, George Osborne and Boris Johnson, have all gone along with this delusion. The money for the games came from taxpayers. The majority of whom don’t live in London so will have seen no net benefit at all. If the businesses that were meant to benefit, by and large don’t, then you’ve been wrong. You’ve all gambled away £9 billion of other people’s money on a fun party. 

Yes the Olympic Games are a great time, and offer fantastic spectacles of people truly achieving their best through effort and training. Yes it’s nice for Team GB athletes to compete on home soil, but if you asked them if it was worth £9 billion of other people’s money for just that, I doubt they would agree. 

However, don’t bother pretending they are an “investment”. Don’t pretend that there are real economic benefits for anyone, beyond the construction companies for the facilities you paid for with other people’s money. London is already one of the world’s most popular tourist destination, it has no shortage of visitors. It was inevitable that a city as crowded and congested as London would need to chase some people away to allow others to come in.   The same thing happened in Sydney.   A study by James Giesecke and John Madden of Monash University indicated that the Sydney games generated a net loss of A$2.1 billion in economic activity.

Well done. 

Now first prize for the UK politician who stands up, after the OIympics I expect, and says “it wasn’t worth it”. 

and no, unlike the grumpy failed politician Gore Vidal, I don't get that much pleasure from "I told you so" when so much money has been wasted.

Second prize if someone simply pointed out that if London wants more visitors, allowing its busiest airport and only hub airport to build a third runway, a project the airport's Spanish owner is able to fully finance itself, would have been a far more effective and enduring way of attracting visitors that building a stadium that still doesn’t have a long term user. 

However, Olympics are a bigger spectacle and far more exciting than a permanent piece of infrastructure, especially when the latter is opposed by hoards of angry environmentalists (the ones who can't and wont protest the extra runway a month being built in China for new airports) and NIMBYs (who wish that 60 year old airport would go away so their property values would go up).

Which is why the government shouldn't be involved with either!

Meanwhile, DO come to London.  There are massive discounts at hotels, flights are cheap and it's easy to get around, and there are sales on if you avoid the crowded Stratford Westfield Mall (and why would you come to London to go to a mall full of eastenders on school holidays?).

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