It’s 2012 at last, which means that we’re finally in the year of the London Olympics. Ever since the announcement way back in June 2005, Britain has been gripped with anticipation as the biggest show on earth rolls in to town.
But it’s not just the organisers that stand to profit; there are hundreds of businesses up and down the country that will enjoy a massive boom thanks to the influx of tourists, athletes and media in the coming months. With events taking place throughout the British Isles, from Edinburgh down to Weymouth, it won’t just be the national coffers that benefit from added revenue.
Tourism is already integral to the British economy. Every year, visitors spend billions of pounds when they come to visit the various attractions that this country offers. However, the Olympics provides a unique draw, bringing thousands of overseas visitors, all of whom need food and accommodation as well as a few more frivolous items to remind them of their visit. All of this creates revenue for the country and individual businesses therein.
A total of £9.3 billion in public funds has been allocated to cover the overall costs of hosting the games; although this figure may be stretched as we get closer to the event, particularly where security concerns need to be met and dealt with. As such it is unlikely that the country as a whole will make an overall profit from hosting the Olympics, certainly not in the short-term. However, there are certain businesses that stand to benefit in their own right and the country will also enjoy a legacy that could last for years, even decades as a result of the new facilities and added interest.
As previously mentioned, everybody that comes to the country needs to eat and drink as well as having to travel around to the various locations and finding somewhere to sleep. Some people may even need to take out payday loans to meet these costs. All of this creates revenue. That means that hotels, B&Bs, supermarkets, cornershops and restaurants are all likely to see a surge in custom, particularly in and around London. Some will look to take further advantage by increasing prices or selling memorabilia, all of which generates further interest.
It is something of a simplistic view of economics, but effectively the country as a whole will make more from those visitors who come to Britain from around the world than from Britons. They bring in cash from their respective countries and spend it on these shores, which bolsters the Government coffers via local businesses. As there is likely to be a huge uptick in foreign visitors in one capacity or another, the economy should benefit as a consequence.
In the long-term, the exposure of having the Olympics in London is likely to improve global awareness and provoke many to choose to come and visit in the future. Whilst tourism is already a huge part of the economy and the various attractions that Britain has to offer ensures a steady stream of visitors, the games are likely to serve as a massive billboard to the world. This might make people bring forward planned trips or settle on it as a goal for the coming years. Again, this comes back to legacy and ongoing economic benefits as a direct consequence of hosting the Olympics.
Of course it is difficult to quantify exactly how much will be made, although the figure is likely to be in the billions of pounds. Whether this will cover the cost in full of hosting the games remains to be seen, but in terms of distributing opportunities amongst individual business and entrepreneurs, it presents a fantastic opportunity to make some much needed money in these tough economic times.