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Olympic-sized Crowds at the Theater?

2011 November 21
by Victor Matheson

Apparently, London’s theaters (or shall I say, “theatres”) are expecting fewer patrons to follow the yellow brick road next summer when the Olympics are in town. According to the UK’s Guardian,

The Really Useful Group, Andrew Lloyd Webber’s production company, is reportedly considering closing West End shows including The Phantom of the Opera and The Wizard of Oz, with tourist bookings predicted to slide in July and August.

The European Tour Operations Association (ETOA) has announced that its members are facing a 95% decrease on London bookings for the period, while the managing director of Encore Tickets, John Wales, said the company was bracing itself for “sales from tourists to be at least 40 per cent down on last year”.

This comes as no surprise to sports economists. One reason we frequently cite when arguing that the economic impact of mega-events is lower than advertised is the “crowding out effect.” While London will no doubt be overrun with Olympics tourists next summer, normally London is overrun with all sorts of other tourists in the summer including musical patrons. Sports fans don’t add to the tourist base, but instead they simply displace other visitors leading to lower than expected increases in net tourism. Unfortunately, cities all too often fall for the song and dance routine of sports boosters claiming big economic benefits for host cities.

*Thanks to my colleague Melissa Boyle for pointing out the original article.

3 Responses
  1. Rob Macdonald permalink
    November 22, 2011

    Thanks Victor, good pickup.

    Unfortunately, that’s nothing compared to the fiscal and social cost of the other type of ‘crowding out’ around the time of the Olympics; that is, when the homeless and destitute get rounded up and packed off elsewhere when the tourists are in town.

    If I can find any data on that sad phenomenon prior to Sydney 2000, I’ll put up a fresh post.

  2. Dan permalink
    November 22, 2011

    In May of 1984 when my wife and I visited her sister in Manhattan Beach, everyone was moaning about what a traffic nightmare the Olympics were going to be and complaining that the congestion would be unbearable. Those that could were planning their vacations to miss the Olympics while others were doing what they could to cash in (one car wash boasted on their sign that they were “Not The Official Olympic Car Wash”). When the Pope came to St. Louis, businesses closed down to avoid the crowds that never materialized.

    The only sure winner with big events like the Olympics are the politicians that think spending other people’s money is their reason for living. Worked out well for Greece didn’t it?

  3. November 29, 2011

    I remember back in 2004 when NYC was mulling an Olympic bid and some friends and I (college freshmen at the time) started a half-joking New Yorkers Against the 2012 Olympic Bid facebook group, largely based on these same reasons. For cities like New York and London, the Olympics games offer very little in terms of economic benefits, either in the short or long term. These are cities that already enjoy healthy tourist flows and need little in the way of athletic theatrics to improve those flows.

    For smaller cities there exists the potential for economic benefits in the short term, especially since there will at least be a net gain of tourists for the duration of the games, but even they suffer in the long term as the incentives for repeat tourism are simply not established.

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