£804m consumer spending boost during London 2012 Olympic and
Paralympic Games
Between 2012 and 2015 The Games will generate economic
benefits worth £5.33bn
79% of post-Games economic benefits will be generated
outside London
22 June 2012 - The London 2012 Olympic and
Paralympic Games will deliver an £804m consumer spending injection
for the UK this summer and an economic legacy worth £5.33bn by
2015, according to the report, Realising a Golden Opportunity: Visa
Europe’s London 2012 Olympic and Paralympic Games Expenditure and
Economic Impact Report. The report looks at the consumer
expenditure and economic output related to The Games and its
distribution across the country. It is based on Visa’s unique
insight into consumer spending in the UK and spending data from
previous Games and major sporting events.
Key report findings:
Click the image to view the
infographic:
The Games open on the 27th July and in the seven weeks
following, international visitors will spend £749m, representing an
18% increase on the level of spend that would be expected if The
Games were not taking place in 2012. Spending by domestic consumers
will increase by £54m during The Games. The knock-on effect of this
increased consumer spending translates into widespread economic
impacts and an increase in output worth £1.21bn over the seven week
Games period.
Longer term economic impact findings:
The report considers the legacy impacts of The Games between
2013 and 2015 and looks at the predicted increase in visitor
spending and economic output attributable to the Olympic and
Paralympic Games and its distribution across the country.
Dr Steve Perry, Commercial Director at Visa Europe
commented: "The London 2012 Olympic and Paralympic Games
represent a fantastic opportunity for the whole country. While the
host city will be the centre of Olympic activity and the initial
spending beneficiary, The Games are a showcase for the whole
country. Visitor spending and associated economic output will rise
on the back of the nation’s higher profile as a desirable
destination in coming years. This economic legacy will be
distributed across the country: from 2013 to 2015, 79% of the
£4.12bn economic output will flow to areas outside of London and
the biggest winners will be high street retailers and hotels."
This spending and economic output will be driven by the raised
international profile of the host city and country, by concentrated
international media exposure and the benefit of ‘word of mouth’
recommendations from Olympic visitors returning home. Areas such as
the South West and Scotland, already popular with tourists, should
experience a significant uplift in spending and economic output in
the years following The Games.
Industry sectors benefiting during The
Games:
During the seven week Games period, industries most closely
associated with tourism such as retail, hotels and entertainment
will feel the benefit of The Games. The domestic consumer will
contribute a smaller proportion of the overall benefit but UK
residents are expected to switch from traditional patterns of
consumer spending and get into the Olympic spirit by stocking up on
supplies and entertaining at home. Supermarkets look set to be a
clear winner from this consumer behaviour.
Overall, the principal winners from the increase in spending by
sector are expected to be:
- High Street retailers: £210 million
- the Hotels sector: £138 million
- Supermarkets: £88 million
- the Entertainment, food and drink industries: £46 million
- the Travel sector (airlines, car hire, etc.): £46m
Dr Perry continued: "Businesses serving
international visitors will capitalise on the presence of Olympics
and Paralympics fans looking to make the most of their visit to the
UK. Retailers will also feel the impact as UK residents celebrate
their nation’s time in the spotlight with Games parties and
gatherings to support the British team as they aim for gold on home
turf."
About the report:
The report is based on an econometric model which projects the
effect the London 2012 Games will have on consumer spending using
Visa cardholder data which accounts for £1 in £3 spent in the UK.
This information has been used to predict spending in the UK were
The Games not taking place and has been supplemented with Visa
cardholder data from previous Games and the FIFA World CupTM to
determine the likely uplift in spending and economic output. This
report builds on the previous expenditure and economic impact
report published by Visa Europe in June 2011, using updated
spending figures and additionally examines the impacts of The Games
across the UK’s regions. It does not quantify additional benefits
to the economy such as stimulus to the construction sector and long
term benefits of improved infrastructure; therefore it provides
unique insight into how consumer spending alone will impact the
economy.
Using accepted econometric models, the report also considers how
this increase in consumer spending will go on to affect the wider
economy. The increase in economic output predicted in the report
includes the knock-on impacts to businesses from increased consumer
spending and the ripple effect this has on other businesses in the
supply chain. The knock on values vary by sector, but are typically
an additional 30-40% of the increase in initial consumer spend.
For the full report and the accompanying infographic,
please visit http://www.visaeurope.com/en/newsroom/olympics_impact_report.aspx
About Visa Europe
In Europe, there are 445 million Visa debit,
credit and commercial cards. In the 12 months ending September 2011
those cards were used to make purchases and cash withdrawals to the
value of €1.7 trillion. 14% of consumer spending at point of sale
in Europe is with a Visa card, and almost 80% of that is on Visa
debit cards.
Visa Europe is owned and operated by more
than 3,700 European member financial institutions and was
incorporated in July 2004. Visa Europe is independent of global
Visa Inc., with an exclusive, irrevocable and perpetual licence in
Europe, while both companies operate to ensure global
interoperability. As a dedicated European payment system Visa
Europe is able to respond quickly to the specific market needs of
European banks and their customers - cardholders and retailers -
and to meet the European Commission’s objective to create a true
internal market for payments.
Visa enjoys unsurpassed acceptance around
the world. In addition, Visa/PLUS is one of the world’s largest
global ATM networks, offering cash access in local currency in over
200 countries.
For more information, visit www.visaeurope.com