London may suffer a 95 percent decline in its leisure tourism bookings during the 2012 Olympics, a new survey has found.
The member survey, conducted by the European Tour Operators Association (ETOA), has discovered that a major slump in leisure tourism bookings is already underway. The decline will be extremely severe in July and August, where operators are currently seeing a 60 percent shortfall in bookings, rising to 95 percent during the time the Olympics are actually taking place. Bookings for the rest of the year are running at 20 percent below this time last year.
“This is still very early in the booking cycle and only reflects what our normal leisure customers are doing,” said ETOA’s executive director, Tom Jenkins. “We always see a decline in demand for a destination during an Olympic year. Clients tend to think that a city has priorities other than being a place to visit for a normal holiday, so some of this was to be expected. But this tendency is becoming absolute as the hotel rates climb in July and August. During the Olympic period itself, there is currently almost no demand from regular tourists. For foreign visitors there is near total displacement by the Games.”
“One of the main reasons for the drop is that the hotels believe that they are going to be full. London appears to have priced itself out of the market in July and August,” said John Boulding, president of Insight Vacations. “We have had no choice but to remove London from our best-selling European ‘Panorama’ tours in July and August. Each one will start and finish on the Continent. They are selling well, but they are selling without the UK.”
ETOA stressed that these figures only represent current trends in leisure tourism, and that they may change. Crucially, they do not account for those people who are coming for the Olympics. But the ETOA warned that bookings for London will have to “strengthen enormously” to make up for this shortfall.
London has 125,000 hotel rooms to fill. Foreign Olympic visitors averaged no more than 25,000 people per night during the 2004 Athens Olympics, and July and August are normally the two busiest months for inbound tourists, accounting for 22% of foreign visitor arrivals.
The ETOA also warned of a major knock-on effect for London’s non-sporting attractions during the Games.
“We anticipate a significant decline in business in July and August 2012 for London theatres and attractions,” said John Wales, Managing Director of Encore Tickets. “At present I anticipate sales from tourists to be at least 40 percent down on last year, so we are looking urgently at alternative customers to the traditional inbound visitor that has been displaced.”
“We know that there will be a large drop in demand next summer and this is having a major impact on our capital investment plans. Furthermore, such is the projected disruption on the roads; there is a major concern whether any tours in London can be operated at all during the Olympic period,” added Nick Palan, owner of Golden Tours, a major sightseeing operator in London.
“The long-term trend implications are huge,” said Boulding, “The UK has traditionally been part of a visit to ‘Europe’ for long-haul visitors. But they can then save time, avoid high visa costs, and benefit from Schiphol’s or Charles de Gaulle’s freedom from APD if they avoid the UK. The Olympics is now making them do so. The legacy of this example is not a happy picture for the UK.”