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Olympic Visitors Shun London Hotels After Congestion Warning

London hotels, shops, restaurants and major attractions are losing sales as visitors heed warnings of overcrowding in the capital from Mayor Boris Johnson.

“The main problem is that domestic visitors are not coming,” said Tom Jenkins, executive director of the European Tour Operators Association, in a phone interview yesterday. “We usually expect around 800,000 U.K. visitors on day trips to London around this time and that is simply not happening. They’ve listened to the warnings and they are staying away.”

Millennium & Copthorne Hotels Plc (MLC) posted a 12.5 percent drop in revenue yesterday from its six London hotels in the first 24 days of July reflecting a slowdown in visitors. Some west London theaters have closed while cinemas are showing the games for free in an effort to entice people away from their televisions. Clothing retailer Next Plc (NXT) said two days ago that the games have had a negative effect on its sales.

While inner city hotels, restaurants and shops are suffering, supermarkets and cycle retailers, such as Halfords Group Plc, as well as airlines are benefiting. Shares in Halfords rose yesterday by the most since the games began on July 27. Transport for London, which stressed in a June 2012 report the need to avoid the transport chaos seen at the 1996 Atlanta games, said recorded messages from the mayor played on the subway warning of congestion have now been dropped.

London Eye, Tussauds

“The people who are coming to the Olympic Games are not your normal tourists,” Miles Quest, spokesman for the British Hospitality Association, said yesterday in a phone interview. “They don’t appear to be eating, shopping, or staying in hotels.”

Merlin Entertainments Group Holdings Ltd., operators of the London Eye and Madame Tussauds, has seen attendances “significantly” affected by government warnings to stay away from the capital, said Chief Executive Officer Nick Varney yesterday in a statement.

The number of visitors to stores in West London fell 10.4 percent from a year earlier on July 27, the day of the Olympics opening ceremony, and 11.6 percent on July 28, according to Experian. In East London, where the Olympic stadium is located, store visits declined 7.2 percent on July 27.

“It’s not that busy at all,” said Jen Spence, a 21 year- old London resident, as she was leaving Oxford Circus two days ago, one of the city’s busiest shopping districts. “I think Londoners want to stay away. But it’s worth taking the risk.”

London Taxis

As many as 1 million extra visitors are expected each day during the games, making 3 million journeys on public transport in addition to the usual 12 million, according to TfL, the city’s transportation authority.

TfL said July 31 that roads in central London are carrying 20 percent fewer vehicles. Access to streets is limited during the Olympics, with 30 miles of Games Lanes restricted to athletes, officials and the media from 6 a.m. to midnight.

“Drivers are down 70 percent on their earnings,” Dave Davies, spokesman of Cabbies Against Boris, said in a telephone interview yesterday. “Summer is usually the best time of the year but the Olympics is not letting us do business as normal. This means five weeks of losses.”

While taxi drivers are protesting about lost earnings, airlines and ticket brokers are benefitting as many Britons leave the capital. Lastminute.com Ltd., which sells about 750,000 airline tickets a year, has seen a 207 percent increase in holiday bookings during the Olympic period compared with a year earlier, while bookings for the rest of the summer are up 66 percent, said Cheryl Jooron, a spokeswoman for the company.

Wiggins, Cavendish

The creation of five outdoor venues where people can watch the games for free on large screen televisions is also helping drive food and drink sales at supermarket chains.

Sales at Marks & Spencer Plc’s Stratford store, the closest M&S outlet to the east London stadiums, rose 280 percent in the past week in its “grab and go” lunch time range while sales of burgers and sausages increased 60 percent, said Hazel Macrae, a spokeswoman for the supermarket chain, in an e-mailed statement yesterday.

Sales of bicycles have soared following the success of Bradley Wiggins, Mark Cavendish and other British riders in the Tour de France and the gold medal won by Wiggins in the men’s 43-kilometer time trial course yesterday.

Halfords Group, a U.K. retailer of bicycles and car parts, said yesterday that sales of Boardman road bikes named after 1992 gold medallist Chris Boardman, are up 12 percent on last month and demand for its own brand Carrera TdF has risen 18 percent in the past week.

“No doubt many of these consumers have been inspired by the success of Wiggins and all other racers,” said Paul McClenaghan, Halfords Commercial Director, in a statement yesterday. “There has definitely been a TdF bounce and we expect there to be even more interest as a result of the Olympics.”

-- Editors: Tim Farrand, Mark Gilbert

To contact the reporters on this story: Sofia Horta e Costa in London at shortaecosta@bloomberg.net; Maria Tadeo in London at mtadeo@bloomberg.net

To contact the editor responsible for this story: Douglas Lytle at dlytle@bloomberg.net

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