UK to benefit from an £804m consumer spending boost during London 2012

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UK to benefit from an £804m consumer spending boost during London 2012

By: Jeff James

Listed Under: Top Story

Published: Thursday, June 21, 2012

The London 2012 Olympic and Paralympic Games will deliver an £804 million consumer spending injection for the UK this summer and an economic legacy worth £5.33 billion by 2015, according to a new report.

Realising a Golden Opportunity: Visa Europe’s London 2012 Olympic and Paralympic Games Expenditure and Economic Impact Report estimates that international visitors will spend £749 million during the Games’ seven-week duration - an 18 per cent increase on the level of spend that would be expected if the Games were not taking place in 2012.

In addition, spending by domestic consumers will increase by £54 million during London 2012.

“The London 2012 Olympic and Paralympic Games represent a fantastic opportunity for the whole country,” says Dr Steve Perry, commercial director at Visa Europe.

“While the host city will be the centre of Olympic activity and the initial spending beneficiary, the Games are a showcase for the whole country.

“Visitor spending and associated economic output will rise on the back of the nation’s higher profile as a desirable destination in coming years.

“This economic legacy will be distributed across the country.

“From 2013 to 2015, 79 per cent of the £4.12 billion economic output will flow to areas outside of London and the biggest winners will be high street retailers and hotels.

“This spending and economic output will be driven by the raised international profile of the host city and country by concentrated international media exposure and the benefit of ‘word of mouth’ recommendations from Olympic visitors returning home.

“Areas such as the south west and Scotland, already popular with tourists, should experience a significant uplift in spending and economic output in the years following the Games.”

According to the study, the principal winners from the increase in spending by sector are expected to be:

• High street retailers: £210 million.
• The hotels sector: £138 million.
• Supermarkets: £88 million.
• The entertainment, food and drink industries: £46 million.
• The travel sector (airlines, car hire, etc): £46 million.

Dr Perry adds: “Businesses serving international visitors will capitalise on the presence of Olympics and Paralympics fans looking to make the most of their visit to the UK.

“Retailers will also feel the impact as UK residents celebrate their nation’s time in the spotlight with Games parties and gatherings to support the British team as they aim for gold on home turf.”

Visa’s report is based on an econometric model that projects the effect London 2012 will have on consumer spending using Visa cardholder data, which accounts for £1 in £3 spent in the UK.

This information has been used to predict spending in the UK were the Games not taking place and has been supplemented with Visa cardholder data from previous Olympic Games and the FIFA World Cup to determine the likely uplift in spending and economic output.

Pic credit: London 2012