Impact of The Cultural Olympiad to British Tourism

by liverpoollaw (student)

University Degree Business and Administrative studies

This essay will critically examine the economic impact of the Cultural Olympiad Festival upon tourism in the United Kingdom. For the purposes of the analysis, the Torch Relay will not be individually considered. Instead, the study will primarily focus on the Festival which ran in the summer of 2012, but it will still observe the Cultural Olympiad from a wider perspective.

The main objective of the essay is to evaluate the efficacy of hosting the Olympics 2012 and the cultural events around them, and to determine whether these have been detrimental or beneficial to the British economy and its tourism sector. It will start by explaining what the Cultural Olympiad Festival is, what were its key aims and what results have been achieved so far. Then, before examining the general positive and negative economic impacts, the paper will briefly look at some of the past experiences of hosting the Cultural Olympiads and the implications stemming from these. Then, it will go into detail about the advantages and the disadvantages that the tourism industry was (and is still) faced with from an economic point of view.

Additionally, it will demonstrate how different reports could lead to different conclusions and how these dissimilarities are likely to occur when assessing the economic benefits and the opportunity costs involved (Baade and Matheson, 2003). By the end of this essay, it will be concluded whether the tourism sector has benefitted and whether it will benefit the industry in the future as well.

The Cultural Olympiad (officially introduced as a term by Barcelona Olympic Games Programme in 1988) is a four-year cultural programme that began in 2008, and which linked to the London Summer Olympic and Paralympic Games (Miah and Garcia, 2005). The most significant part of the Cultural Olympiad (hence the focus of this essay) was the Grand Finale – the Cultural Olympiad Festival, which was funded by the Legacy Trust UK and ran between 21st of June and 9th of September (Department of Culture, Media and Sport, 2012; Legacy Trust UK, 2012). It included events like the David Hockney exhibition, a Live Doctor Who show, the Opening and Closing Ceremonies, the Olympics and Paralympic Games and many more.

The main aim of that Festival was to use the power of the Games and encourage people across the UK (especially the young) to become involved in arts and culture, and to also challenge perceptions of what art can do to advance economic agendas (Hall, 2011; Garcia, 2010). The overall results have revealed that 18 million people took part in cultural projects to celebrate London 2012 and people from all over the UK enjoyed 12,000 events and performances. In addition, over half a million people signed up to London 2012 to receive information on cultural events linked to the Games, and polling showed that 10 million people have been personally inspired to take part in more cultural activities in the future (London 2012 News, 2012; London 2012 Join In, 2012).

Before looking into London 2012 Festival and its economic influence on British tourism, it is necessary to examine and analyse findings and reports on previous Cultural Olympiads. Once all the pros and cons are explored, it would be a lot clearer what the overall economic impact of the 2012 Cultural Olympiad was, and what it would bring to the tourism industry in the future.

It has been argued that economic impact is very difficult to measure (Miah and Garcia, 2005). There have been numerous economic reports on previous Cultural Olympiads and their impact on the host country, some of which proclaimed fantastical benefits; others have condemned the whole affair as a waste of taxpayer money. For example, Barcelona Games 1992 was seen as a success story with tourism now a significant sector in the city economy and despite its bad press, Atlanta seemed to have received a tourism boost as well (French and Disher, 1997).

This is a preview of the whole essay

Conversely, looking back at the Sydney Games and cultural events in 2000, some academic research suggests that in terms of purely measurable economic variables and tourism impact, they had a negative effect on Australia (Giesecke and Madden, 2007). In fact, Sydney had seen a 25% drop in visitor numbers in the two years after the Games (Mean and Tims, 2004). In addition, other concerns like the public transport system, airport congestion, city traffic, security threats and the cost of running all the facilities needed have also had a damaging impact of the tourism industry in Australia (Haynes, 2001). In contrast to these findings, the ATC Olympic Games strategy results have found that the Sydney Olympics have contributed to additional US$3.5 billion spending from tourist visitors and accelerated development of Brand Australia by 10 years (Haynes, 2001). Therefore, it is difficult to determine what the overall impact on the continent’s tourism sector was.

Another controversial case was the Athens Olympics and Cultural Olympiad which were considered to have contributed to tourism in the city by making it cleaner, brighter and catalyst for investment. However, Perryman has criticised that side of the story because of the unexpected devastating crash of the Greek economy, which followed three years after the Olympic Games and launched the Eurocrisis (Perryman, 2012).

Therefore, it must be questioned how past experiences have shaped perceptions about hosting large events like the Olympic Games, and to what extent can they predict and match the reality for future British tourism after London 2012. This is why the essay will address both positive and negative influences before it reaches to a clear conclusion about the overall impact.

Numerous studies have claimed that the Cultural Olympiad Festival had an overall positive economic influence on the British tourism industry. These results confirm and support the view that hosting the Olympics is good for the UK nation. First of all, the culture secretary Jeremy Hunt announced record-breaking figures for visits to the UK and spending by tourists this year (Jowitt, 2012). Moreover, Visa says that London spend in restaurants is up by a fifth on a year ago and spending on theatre and other tickets has doubled (Department for Culture, Media and Sport, 2012). These figures demonstrate that the Cultural Olympiad is significantly important from tourism’s perspective.

Secondly, the Minister for Sport and Tourism, Hugh Robertson, announced that the overall cost of the London 2012 Olympic and Paralympic Games was £8.921 billion, a saving of £377 million from the budget. Hence, he considers London 2012 as a ‘tremendous success and a significant achievement’ (Department for Culture, Media and Sport, 2012). Additionally, the creative industries generating nearly £1.3 billion verifies the large contribution which cultural events made to the national economy (Maritime Mix, 2012).

Finally, Britain invested £6 million in a national TV and cinema advertising campaign, promoting holidays at home, which proves that the focus is not only on the present but also on the future legacy of British tourism (Department for Culture, Media and Sport, 2012).The implications of these results are not only significant to the tourism industry, but also to the nation, businesses, and the labour market.

Arguably, businesses have benefitted to a big extent from the Cultural Olympiad through 75,000 awarded Olympic contracts (Department for Culture, Media and Sport, 2011) and through the supply chain. For example, Golden Bear (company supplying the official mascots) has gone on to win a world-wide contract to produce toy Minis for BMW (Foley, 2012). Additionally, sales of Team GB replica kit have helped to boost retailers during the second week of the Olympics (Ruddick, 2012). Of course, there are inevitably some businesses that suffered short-term consequences, but the long-term impact points at promoting London as one of the most exciting cities on the planet (Department for Culture, Media and Sport, 2012).

Not only did businesses gain, but the Cultural Olympiad has contributed to the labour market in the UK as well. The Olympic Development Authority provided support for 4000 training interventions. These benefitted not only the society as a whole, but individuals as well, because being more qualified would increase their likelihood of being employed and receiving higher wages in the future (Garret et al, 2010).

Another positive outcome was that the Festival enabled community-led projects to take place that would not have happened otherwise. For example, the Lake Alive spectacular on Windermere brought £3m into the local community (Hall, 2011). Furthermore, London’s new-found status as an Olympic city draws in new visitors from overseas who go on to visit other parts of the UK (Foley, 2012). Another implications are people’s happiness and sense of pride stemming from experience of certain events (i.e. the Opening Ceremony) and big sporting achievements, which in turn boosts the economy by encouraging consumer spending (Foley, 2012). Overall, the London Games and the Cultural Olympiad are expected to have substantial contribution to UK GDP of £16.5 billion over extended time period.

Unfortunately, hosting the Cultural Olympiad has its downfalls as well. The economy and the tourism suffered some significant disadvantages; these need to be analysed in detail. Firstly, a big problem for the industry was the displacement of international arrivals and avoidance of the city, both before the London 2012 Festival due to perceptions about construction activity, and during the Games due to fears of over-pricing, overcrowding and unwelcoming atmosphere (Wells, 2012; Lloyds Banking Group Report, 2012). This had negative implications on the overall tourist visits and expenditure in the UK. Moreover, a survey from employers group has shown that the Olympics failed to boost Britain’s high streets as it was originally expected; in reality, retail sales in August fell to their lowest level in four months (Aldrick, 2012).

Mark Perryman suggests that the Cultural Festival was designed to serve the interests of the International Olympic Committee and not the needs of the host city and nation (Perryman, 2012). This could explain why does scepticism occur and how perceptions influence people’s behaviour in relation to the Cultural Olympiad.

In contrast to the abovementioned benefits for businesses, some of them reject claims that hosting the Olympic Festival had a positive impact on the economy and tourism sector. Tour firms, hotels and restaurants said they had found the Festival and the Games to be one of their quietest periods (London Olympics Business, Telegraph, 2012). This could be explained with the fear of over-pricing and overpopulation as already mentioned.

Likewise, because of fears of congestions, 1.5 million workers stayed at home during the London 2012 to avoid the overcrowding. Economists say that employees were less productive while working from home and this could prove a damaging blow to the capital’s economy (Chapman et al., 2012).

Finally, there were repeatedly warnings about the strain London’s transport system would experience with the expected arrival of 11 million visitors to the Games; this led to Londoners vanishing from the underground train system, the shopping districts, theatres, hotels, who would usually benefit from tourism (Casciato and Davey, 2012).

As already stated, the main objective of this study was to evaluate the effectiveness of hosting the Cultural Olympiad Festival in the UK. After thoroughly considering some of the past Olympic Games and the impact on their host’s tourism sector, and also after a detailed observation of the advantages and disadvantages of London 2012, it could be concluded that the British tourism benefitted from being involved with the Olympics and the cultural events linked to them. Of course, the country has suffered some detriment (mainly associated with displacement of international visits). However the expected contribution to the UK GDP of £16.5 billion, evidences that the advantages have outweighed the disadvantages to an extent where the British tourism is likely to expand in the future. In addition, the media attention which London secured, would attract leisure and business tourism and inward investment so as to improve local infrastructure, therefore positively contributing to the nation and the economy. Also, the creative industries generating £1.3 billion, resulting from people having been personally inspired to get involved in cultural events, could develop Britain’s world cultural reputation.

In reality, it is very difficult and still early to predict how big the economic impact will be in two or three years’ time from now, and whether this economic legacy will last longer or shorter than what has previously been experienced from hosting Cultural Olympiads, Summer Olympic and Paralympic Games. I believe that the tourism influence is likely to stretch into the future, which will have a general positive effect on the labour market, businesses and the nation as a whole.

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