Be wary of Olympics ‘displacement effect’, warns Minister

By Lorraine Heller

- Last updated on GMT

Related tags: United kingdom

John Penrose: "We have lots of opportunities if we get it right"
John Penrose: "We have lots of opportunities if we get it right"
The Minister of Tourism John Penrose has warned the hospitality sector to be wary of a ‘displacement effect’ that could be caused by the Olympics, saying it is crucial to treat the event as the hors d’oeuvre rather than the main course if the UK is to see any long-term benefit.

Addressing industry at the recent Getting into Shape for 2012 conference, held by M&C Report, Morning Advertiser and BigHospitality, the Minister stressed that the Olympics were one event in a series of others that the country must position itself for, including the Royal Wedding, the Diamond Jubilee, the Olympics Torch Relay, the Cultural Olympiad, the Commonwealth Games, and the Ryder Cup.

“We have lots of opportunities over the next five years to make Britain the party capital of the world if we get it right,” he said.

“But it isn’t straight forward because there is the danger of a displacement effect – a danger that large chunks of the rest of the world will look at the UK in 2012 and because we have a couple of weeks of athletics going on in London in July, they will assume that the entire country is either full or closed for the entire year.”

“It could be pretty bad news if we allow that to persist, particularly for anybody outside London.”

Multiplier effect

Penrose stressed the importance of projecting the right image abroad in order to encourage visitors to continue coming to the UK.

“We’re going to have probably the biggest TV audience the planet has ever seen, watching what’s going on in this country in July in 2012. And that’s great, but they aren’t all going to be able to come in those four weeks.

“If people like what they see of the UK, they will plan to visit the country too, he said. “That’s our big opportunity, that’s where we get the multiplier effect.”

Public – private partnerships

The way to achieve this, he said, was through public-private partnerships between industry and government.

The UK government recently launched a four-year £100m marketing campaign​ devised to create 50,000 tourism jobs and boost visitor spending in the UK by £2bn. Half of the marketing funds are to be provided by government, while the other half will come from private organisations.

“We can’t afford to get this wrong,” said Penrose. “If we get the public and the private sector working together, then we stand a much better chance in making sure that the money is spent in the most commercially savvy, sharp-edged and ultimately effective way to drive heads in beds and bums on seats.

“Together we can be stronger and together we can make it work. But if we get it wrong then you will know that the displacement effect is something to be feared.

“And if we get it right in 2012 then I am devoutly hoping and expecting that that is a concept and an approach, a method and a process, which we can apply to all those other events that are coming up in future.”

Facilitate travel

However, speaking in a later session, Ufi Ibrahim, chief executive of the British Hospitality Association (BHA), said the marketing fund would not have the desired effect unless other measures were also taken to enable tourism.

Factors still deterring tourists include high VAT, high visa costs, complicated visa application processes, and high air passenger duties, she said.

“On the one hand we may be gathering £100m to go out to the world and market the UK, but on the other hand we’re making it difficult, more expensive and less attractive for them to actually get here.

“I really fail to see why we should not be looking at this in a much more realistic marketing fashion and making sure that we facilitate travel at the same time as promoting it.”

BHA has put forward its own proposal for partnership between government and industry, which it says can help generate economic growth and create a further 236,000 jobs over the next five years.

BigHospitality has put some of industry’s concerns to John Penrose and will publish his video response on Wednesday. Keep your eye on our Videos​ category for more.

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