Will the London 2012 Olympics affect the Welsh economy?

The London 2012 Olympics are finally upon us. But what impact will the London Olympics have on Wales, or in particular Cardiff? I’ve looked into a number of different resources in attempt to establish if the Welsh economy will benefit from the 11 football games being hosted in the Welsh capital.

Almost every article I came across had mixed opinions on whether or not the Olympics will benefit the Welsh economy. If we look at the temporary levy on Sunday trading hours, Chancellor George Osborne makes a valid point about not wanting to hang up a ‘closed for business’ sign when some of the biggest events will be on a Sunday. However shop workers Union USDAW oppose the temporary rule change, and say there is no evidence to suggest it will boost the economy or tourism. USDAW also go on to explain that the extended shopping hours won’t put more money in consumers’ pockets and the last thing retailers need is increased overheads with little or no return. Retailers are asking staff to volunteer to work the extended shift not forcing them. I imagine the additional income from the overtime will be welcomed by many retail workers.

From a consumer perspective the biggest obstacle I foresee with the extended Sunday trading hours is the travelling and parking situation. On days where there is only one football match, roads around Cardiff will be closed for just over five hours and if there are two matches then they will be shut for up to 8 hours. Arriva Trains Wales will run extra trains into Cardiff, there will also be park and ride facilities. Unfortunately as a shopper it seems like getting into town will be too much hassle. I’m not a football fan, but I thought before a game you go to the pub and that’s where you would end up after, not in John Lewis!

Retailers can’t even advertise within 500m of the Millennium Stadium for almost a fortnight. There will be an increase in footfall throughout the city and local businesses are being denied the opportunity to promote their business, in order to protect the rights of official sponsors like McDonalds and Coca Cola. I understand that the advertising ‘no go zone’ was a condition Cardiff had to accept in order to host the events, as did all of the Olympic venues. The Millennium Stadium is in the heart of Cardiff, so it’s likely to impact a higher proportion of local businesses than some of the other venues throughout the UK.

There is no doubt that the hospitality and tourism industry have already benefited and will continue to do so throughout the next few weeks. Before the Olympics kicked off, Wales was a training base for almost 1000 athletes and support workers. A number of hotels have already reported that occupancy is up.

Hundreds of thousands of visitors are expected to visit the capital; a global television audience of 4bn is also expected. I keep reading about this being the perfect opportunity to showcase Wales to the rest of the world. However hosting the 11 matches, torch relay and preparing the city has cost Cardiff Council tax payers over £300,000. With so many in the city feeling financial hardship is it an appropriate use of funds? It’s not even as if the events are a sell out yet, so far 250,000 tickets have been sold but they are struggling to sell the remaining 300,000.

Wales won the lowest amount of Olympic contracts than anywhere else in the UK (according to new figures released from the DCSM). In total, Wales was awarded £4.5 million of contracts from the £7 billion worth of contracts that were up for grabs. At this stage in it unknown whether there was any bias towards companies based outside of Wales or if Welsh firms simply didn’t ‘cut the mustard’.

Wales has paid to host the London Olympics and it remains to be seen what we as a country will see in return. The evidence so far suggests that many decisions aren’t going in the favour of helping local businesses and the economy. The Olympics may actually affect ‘normal’ tourism trade with visits being avoided whilst the games are on. The 2010 Ryder Cup hosted at The Celtic Manor has continued to boost golf tourism in Wales, but this is a specific demographic with a golfing agenda. I don’t think we will see the same surge in tourism after the Olympics simply because Wales hosted 11 football games.

So will the London 2012 Olympics affect the Welsh economy? Some industries will benefit hugely over the next few weeks, but I don’t think the impact will be to the extent that some are anticipating.

Please leave a comment below or email me at jodi.stuart@realradio.co.uk or through Twitter @realradiojodi

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4 Comments

  1. K Smith

     /  July 26, 2012

    The whole thing is a total and utter waste of money. Yesterday was horrendous for anyone who uses public transport and I’m so glad I don’t live in Cardiff where my council tax would be spent on this pointless exercise.

    But then I don’t like sport and don’t like things that cause inconvenience to my day!

    Reply
    • Each to their own I suppose. I think the exposure will be good for Wales, whether there will be any financial gain for those not directly involved with the Olympics remains to be seen.

      Reply
  2. Tim Masters

     /  July 27, 2012

    Good post which makes interesting reading. It’s disappointing to see the small percentage of contracts awarded to Welsh businesses. Of the overall £7bn budget roughly £3bn has been spent on site preparation, infrasture and the olympic and paralympic village. Assuming there has not been a bias against Wales, could it may be that we just lack construction businesses large enough to tackle these big projects?

    It will also be interesting to see what, if any, benefit Wales gains afterwards.

    Reply
    • Hi Tim, thank you for your comment. When I started researching for this post I have to agree I was surprised that Wales won the smallest proportion of contracts througout the UK. I think the post Olympic analysis will make an interesting read to see if it has boosted the economy!

      Reply

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