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The Friday Five: reasons Olympomania will be great for Britain
Ahead of the long-awaited Olympic opening ceremony tonight we look at how London 2012 will benefit Britain.
by Victoria Bischoff on Jul 27, 2012 at 14:08Follow @VBischoff
The excitement over the Olympics is growing so fast that the 'geiger counter of Olympomania' is about to go 'zoik off the scale', according to London mayor Boris Johnson.
Here's why this is a good thing...
1. The economy
Economists have been debating the impact of Olympics on the UK’s economy since we won the bid back in 2005, but most agree it will have a positive effect – if only modest and temporary.
Economist Howard Archer, of IHS Global Insight, said he expects the Olympics to lift GDP by around 0.3% in the third quarter thanks to ticket sales and the boost the Games will bring to retail sales, employment, tourism and consumer confidence. This will at least reverse some of the damage caused by the shock 0.7% drop seen in the second quarter of the year.
However, once the Games are over Archer warned that the problems facing the UK economy will still be there and the growth rate will therefore not be sustained. He added that the Olympics could also hit productivity levels as people work from home to avoid London during the Games and watch the events on TV when they should be working!
The government is spending some £3 million of the Olympic budget on tourism-boosting methods to get more visitors into the country, not just during the Games but in the years to follow.
Culture secretary Jeremy Hunt said he wanted ‘’Cultural Olympiad’ events like the torch relay to ‘showcase the whole nation’, but it’s London that Britain’s top tourism bods are relying on to bring in the big bucks.
Big attractions, like the London Eye and the Dungeons, are going to make a killing over the next couple of weeks. And then there are the new attractions built especially for the Olympics which will no doubt prove popular with visitors – such as the Olympic cable car costing £4.30 a go or £3.20 with an Oyster card and the Orbit Tower at the Olympic site in Stratford at £25 a pop, for example.
In fact, according to Visa, spending by international visitors in the UK on Visa cards increased 5.1% in the week before the Olympics. Tourist attractions and exhibitions boasted a 13.2% rise in spending compared to last year, while theatres reported a 53% increase.
Economists worry, however, that much of boost achieved by tourists will be undone by people going away from the UK to avoid the Games. Others will postpone visits, Archer said, while many Londoners may be scared away by all the travel warnings and hide at home.
3. Pubs and restaurants
There is nothing like a bit of sun and an international sporting event to drive hoards of Britons into the arms of their nearest pub. In fact, many of us don’t even really need the sunshine – which is fortunate given the weather forecast.
According to Archer, pubs, restaurants and hotels near all the Olympic venues should see a significant boost in the coming weeks, while supermarkets should also do well as people are likely to buy extra food and drink to enjoy while watching the Games.
However, the British Beer and Pub Association reported earlier this month that beer sales were down over 5%, largely as a result of poor weather, so let’s hope the weather improves again soon. Reports in the FT, meanwhile, suggest that some companies believe that any boost will be too localised to impact performance nationally.
There should be a real boost to retail sales through sales of Olympic souvenirs and merchandise, according to Archer. He also pointed out that a significant number of people may upgrade their televisions to enjoy the Olympics in all its glory.
Voucher website VoucherCodesPro.co.uk, meanwhile, claims that it has seen a 67% decrease in the number of voucher and discount codes issued by UK high street and internet retailers as retailers look to cash in on the expected surge in sales. The government has also suspended Sunday trading laws – which usually prevent shops from opening for longer than six hours between the hours of 10am and 6pm on a Sunday – in England and Wales for the duration of the Games.
Some luxury brands, such as Mulberry, however, are concerned that the crowds of sports fans will deter the international shopper.
Then there is also the issue of the super-strict Olympic branding rules, which are preventing non-official sponsors of the Games from using the event to attract customers. Shops can't use the word 'Olympics' or the logos such as the rings. By now everyone has probably heard about the 81-year-old lady who was banned from selling second-hand dolls in charity shops which she'd knitted some Olympic themed clothing for... sad times.
(Any shops looking for tips on how to get around the branding rules meanwhile should maybe check out the picture which was posted on Shortlist's Facebook page below.)
It's been quite a year for us Brits – the Queen's Diamond Jubilee, Euro 2012, Murray becoming the first Brit to make it into a Wimbledon final in 74 years... and now we have the Olympics!
It's a good job too given the sorry state of our economy – anything that gives Britons something to cheer about can only be a good thing.
And I must say, having just chased the Olympic Torch down the river as it drifted past our offices in Vauxhall, there is a great atmosphere brewing in the capital ahead of the opening ceremony tonight. And if you're not into sports at least you've got something different to moan about ey?
Let's just hope we Londoners can find it within our busy, important selves to refrain from screaming at confused tourists stumbling up and down tube escalators to STAND ON THE RIGHT.
More about this:
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- The Olympic Orbit tower: yay or nay?
- Construction decline drags UK economy to shock 0.7% contraction
What others are saying
- BBC weather forecast
- Retailers fear Olympics might ring hollow
- Retailers fear Olympics might ring hollow
- London 2012 souvenirs
- London 2012 shop
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