Simon Calder: Eurostar to reap gold, but hotels face a hard sell

TRAVEL

Whether the French or British capital won, it was sure to reap an Olympic dividend. In 2012, Eurostar trains will bring athletes and spectators in their thousands to London, capitalising on the new high-speed rail link through Essex to the new terminus at St Pancras.

Upscale hoteliers are also looking forward to cashing in on the Olympics. Compared with most other capitals, London is chronically under-supplied with beds, particularly among four- and five-star properties. Leading hotels began negotiations with prospective sponsors and broadcasters within minutes of yesterday's announcement. They are expecting to be able to charge large premiums, even on the existing high rates.

Yet few other travel providers will make significant profits during the event itself. Some proprietors of lower-grade hotels recalled the debacle of the millennium celebrations, when rates were set at very high levels, but the expected bonanza did not materialise.

All the evidence from recent Olympiads points to a sharp decline in the number of "real" tourists during the Games. Prospective visitors are deterred by inflated accommodation costs, the likelihood of disruption and fears about a possible terrorist attack.

Since London is the main international gateway for the rest of Britain, the travel industry elsewhere in the UK can expect a lean summer in 2012. Greece saw a sharp decline in tourism before, during and after the 2004 Games, suffering an 18 per cent drop in package holidaymakers from Britain alone and locations hundreds of miles away from Athens badly affected. The same pattern was identified in Australia during the 2000 Sydney Olympiad.

Airlines, too, can expect the event itself to be a mixed blessing. Air fares to Sydney and Athens "spiked" to historic highs before and after the Games, but slumped in the following months. The travelling public seems collectively to shun Olympic nations in the aftermath of the event, perhaps fearing a general anticlimactic gloom.

London is the world's leading hub for aviation, but its airports are already seriously congested at peak times - and will experience heightened security and consequent delays during the Olympics. Even so, within an hour of yesterday's announcement Gatwick was unofficially claiming to be "London's Olympic Gateway": it has direct flights to more destinations than any other UK airport.

"The Olympics gives us a focus for improvements that will allow us to increase capacity and customer service", said Paul Griffiths, the managing director. He said the deadline would concentrate the minds of transport regulators, and he warned: "As far as infrastructure is concerned, the public will have no truck with bureaucracy."

The long-term benefits or costs to tourism will depend on how well London manages to capture the world's imagination. The seven previous host cities have experienced mixed fortunes. The main visible legacy of the 1980 Olympic Games in Moscow is Sheremetyevo airport, widely regarded as one of the worst in the world. Seoul, Los Angeles and Atlanta experienced no significant tourism dividend.

But the Olympiads in Barcelona and Sydney transformed the fortunes of both the host city and the host nation, and they are still reaping the benefits in terms of awareness and visitor numbers.