London may have false expectations, says association, pointing to anticlimax in Beijing, Sydney and Athens

Owen Gibson, sports news correspondent

The trade body representing tour operators has warned that expectations of a boost in tourism from the London Olympics may not be met, after unveiling research that suggested previous games had a “toxic” effect on visitor numbers.

The European Tour Operators Association, which held a seminar on the subject today, released research that showed previous hosts had invariably overestimated the number of foreign visitors and the duration of their stay.

The Sydney games in 2000 anticipated 132,000 visitors and received 97,000 for the games period, while Athens hoped for 105,000 per night in 2004 and received fewer than 14,000. In 2008, Beijing anticipated more than 400,000 foreign guests and received 235,000 for the whole month of August.

The average number of hotel beds occupied in Beijing during the Olympics was 39% down on the previous year, the ETOA report showed. It said that while the Beijing Games may have been a “triumph of planning and showmanship”, for the tourism industry they were a “toxic event that crushed normal demand, both business and leisure”. The report said that while tourism chiefs and organisers had recognised that the Olympics would create some displacement, with visitors arriving for the games replacing those put off by the fact it was taking place, they still tended to talk in terms of a large overall boost.

“For London many in the industry are anticipating a boom, with up to 350,000 foreign visitors predicted per day during the Olympics,” it said. “This expectation of bounty creates its own problems. In London, hoteliers expect to be full with premium business, and some anticipate a displacement of demand that fills up the surrounding months.”

Lord Coe, chairman of the London Organising Committee of the Olympic Games, has talked of 1 million “extra” visitors coming to the UK for the games.

But the ETOA report claimed that the perception that the host city would be crowded and prices expensive was likely to tarnish the view of the country as a whole.

It said its members were already dealing with the perception that the UK would be crowded and so best avoided in 2012.

“The problem is not restricted to the host city. London is the gateway to the UK and its biggest draw. If you remove London from a visit to the British Isles, everywhere else becomes far more difficult to sell,” it said. “Athens has nothing like the central importance that London occupies, yet when its visitor arrivals dropped by 6% in the Olympic year, regional Greece fell by 11%.”

Olympic organisers and the mayor of London, Boris Johnson, face an ongoing battle to convince overseas travellers that visiting London for the games will remain cost-efficient and have appealed to hotels not to try and cash in by increasing their prices.

They would also argue that a narrow analysis of the number of people visiting during Games-time ignores its longer term benefits in terms of acting as a giant global marketing event for London and the UK and changing the perceptions of those who might not otherwise visit the country.

“Precisely because London is one of the top international destinations, it has more to lose. At the moment a false expectation of bookings is in danger of destroying an export industry,” said the ETOA executive director, Tom Jenkins. “For August 2012, ETOA members – who alone regularly deliver over 15,000 hotel rooms per day – cannot reserve space. Without any reservations to sell, nothing can be sold.”

A spokesman for the Department of Culture, Media and Sport said: “This is a weary old story. No one seriously believes that any tourist accommodation will remain unfilled during the Games themselves. The important point is that the 2012 Olympic and Paralympic Games are a long-term investment in the future of Britain’s visitor economy and a once-in-a-lifetime opportunity to enhance the image of the UK as a visitor destination.”

He added: “VisitBritain’s marketing strategy and the creation of the new £1bn marketing and PR fund will be used to reassure the world that Britain is open for business throughout 2012. And showing the best that Britain has to offer while the spotlight of the world is upon us will create a tourism legacy for years to come.”

Jenkins said that if politicians and tourism chiefs recognised the issues, they could plan to overcome them.

“Even during the peak moments the numbers attending the games themselves are unlikely to exceed those who attend games across the city during the football season. And these numbers are dwarfed by the millions of commuters that regularly use its infrastructure,” he added “If this applies to the 17 days of an Olympics, then the message for the remaining 50 weeks is that London will be open, like no other city, for normal business. It is with this message that London must welcome the world.”

Eddie Stobart group’s performance ahead of last year

Trucking group Stobart, whose Eddie Stobart lorries are a common site on Britain’s motorways, said its business had made a strong start to the year thanks to new multi-million pound contracts with Irn Bru maker AG Barr and Tesco.

The haulier, which is recasting itself as a transport group by offering rail, air and sea freight as well as warehousing services, said its performance in the first six months of the year was in line with management expectations and “significantly ahead” of the same period last year. “We expect continued growth in the second half as new contracts start to deliver, whilst we recognise the economic environment remains challenging,” said its chief executive Andrew Tinkler.

Stobart said volumes at trucks division Eddie Stobart were “strong” thanks to a recent deal – worth about £7m a year – to provide transport and warehousing for Scottish drinks group AG Barr which also makes Tizer. Other notable wins include a £25m-a-year distribution contract with Britain’s biggest supermarket chain Tesco.

The company said volatility in load volumes had been a problem during the period and it was working with its customers to overcome them. Despite this issue Tinkler said overall trading at the division, which operates over 1,850 trucks, was in line with targets and significantly ahead of last year.

Stobart said trading at its rail arm had fallen short of management expectations as a good performance on freight was undermined by weakness at its engineering services business which supplies Network Rail. Uncertainty over future government spending meant orders from the state-owned rail infrastructure company were unchanged from a year ago. Tinkler said the rail division remained an important part of the picture with its expertise relevant to other projects such as an ambitious plan to transform Southend Airport into a hub for cheap passenger flights to take on London City Airport for the Olympic Games in 2012. He said he expected the new railway station and control tower at Southend to be finished this year.

Analysts expect Stobart, which has a market value of £380m, to make a pre-tax profit of £35.2m this year, up from £29.3m last year. Jonathan Jackson, head of equities at Killik & Co, says the company’s decision to use the strong cash flow generated by its core road haulage business to diversify had set it up for future growth. “Stobart is now able to provide an integrated service which addresses a number of clients concerns regarding traffic congestion, pollution and cost,” said Jackson. “Although the economic environment remains challenging, strong growth is expected in the second half as new contracts come through.”