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Olympic Visitors Shun London Hotels After Congestion Warning

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Aug. 3 (Bloomberg) -- London hotels, shops, restaurants and attractions are losing sales as visitors heed warnings by Mayor Boris Johnson about overcrowding in the U.K. capital during the Olympic Games.

“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.”

Visitors may be avoiding London hotels as room prices during the games are 70 percent higher than a year ago, according to Stacey Stockwell, spokeswoman at TravelClick Inc., which manages hotel reservation systems.

Millennium & Copthorne Hotels Plc posted yesterday a 12.5 percent drop in revenue from its six London hotels in the first 24 days of July, reflecting the visitor slowdown.

Some west London theaters have closed and cinemas are showing the games free of charge in an effort to entice people away from their televisions. Clothing retailer Next Plc said two days ago that the games have had a negative effect on 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 of 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 transport chaos such as that seen at the 1996 Atlanta games, said recorded messages from the mayor that were played on the subway, warning of congestion, have 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, Chief Executive Officer Nick Varney said 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 dropped 7.2 percent on July 27.

Not ‘Busy at All’

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

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

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

‘Drivers are Down’

“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 lost earnings, airlines and ticket brokers are benefiting as many Britons leave the capital. Lastminute.com Ltd., which sells 750,000 airline tickets a year, has seen holiday bookings triple 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 company spokeswoman.

The creation of five outdoor venues where people can watch the games free of charge on large-screen televisions is also helping to drive food and drink sales at supermarkets.

Sales of Marks & Spencer Plc’s “grab and go” lunchtime range at the company’s Stratford store, the closest outlet to the stadiums, almost quadrupled in the past week, said Hazel Macrae, an M&S spokeswoman, in an e-mailed statement yesterday. Sales of burgers and sausages increased 60 percent.

Wiggins Effect

Sales of bicycles have soared following the success of Bradley Wiggins, Mark Cavendish and other British riders in the Tour de France and Wiggins’s victory in the men’s 43-kilometer Olympic time trial this week.

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 the company’s 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.”

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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