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London Olympics 2012: will Games bring boom time or financial bloodbath?

The cancellation of the Big Chill festival reflects wider concern about the impact on British businesses this summer

The culture secretary sees them as “a once-in-a-generation opportunity to promote the UK”. Andrew Lloyd Webber fears they will bring a “bloodbath” for London theatre.

But ask the people with the most to win or lose what they think of the 2012 Olympics and Paralympics, and the recurring phrase is not “licence to print money” or “financial apocalypse” but a wary “business as usual”.

The mood is partially explained by figures at the end of last month from the UK’s government-funded tourism agency. According to VisitBritain, the £9.3bn Games are unlikely to trigger a surge in foreign visitors, with 2012 visitors expected to number 30.7 million, matching last year’s total.

But already the impact on some traditional summer highlights is being felt. Thursday brought bad news for festival-goers and traders planning a trip to Herefordshire: the Big Chill festival, due to take place over the first weekend in August – right in the middle of the Olympics – will not go ahead as an outdoor event, though organisers say they may yet stage a smaller, indoor festival.

“I looked long and hard at moving the date so it didn’t clash with the Olympics,” said festival boss Melvin Benn, “but [because of] our fans’ desire to keep the date and an inability to find an alternative that worked, I plumped for maintaining the existing weekend. Sadly, the artist availability and confirmations we were achieving led me to conclude that I couldn’t risk going ahead.”

VisitBritain – which has received an extra £27m in funding from the Department for Culture, Media and Sport (DCMS) to help drive up numbers – admits the Games will put off some visitors to London, too. “For some people, a busy and vibrant environment with a global spotlight on it is not where they want to go on holiday, which is fair enough,” said a spokesman. “It’s displacement – people who would usually come here go somewhere else.”

The D-word is also cropping up at the British Hospitality Association.

“There will clearly be some displacement,” said aBHA spokesman, Miles Quest. “How big this is, no one yet knows. There are some who believe it will be ‘significant’ – I’m not sure how they define significant – but the hotel industry believes the capital will be as busy as usual with the number of new visitors making up for those who stay away.”

The prospects for restaurants, said Quest, were equally tricky to forecast, as they depend on both international and domestic demand.

“Many of the visitors will be eating in the Games area so restaurants in the West End may suffer,” he said.

“And if Britons stay at home to watch the Games on TV – rather than going out to eat as they might normally do – that will impact on restaurants far beyond London.”

Such fears, he said, had understandably left some restaurateurs feeling “quite gloomy” about the games.

Mark Rubinstein, president of the Society of London Theatre, is happy to shrug off Lloyd Webber’s dark prognostications, pointing out that overall advance bookings across the West End are up this year compared with last year.

But he admits the next few months will be challenging. “It’s going to be different and it’s harder work, but it’s a challenge that we’re all up for,” he said.

“There’s no question that there’s going to be a lot of visitors in London. I don’t think it’s going to be a bloodbath. I think we are going to see different audiences from the summer audience we would normally see in those weeks.”

Ensnaring those new audiences, he added, would be vital. “There will be an awful lot of visitors whose primary reason for coming is the Games and we need to work harder as an industry to reach out to those people, to run promotions, to run initiatives that will make sure they get the information about what shows are on and how to book,” he said.

The organisers of the Womad festival, one of many big cultural events during the Olympic period, are laid back about clashing with the Games.

“Despite concerns that the Olympics might affect ticket sales, at this point, [they] are 30% up on where they were last year,” said the festival’s director, Chris Smith.

“For us it’s very much business as usual, and the ‘rest’ that Glastonbury has taken is likely to be a much more significant factor than any Olympian extravaganza.”

Oddly, given VisitBritain’s plateauing visitor predictions, the DCMS remains defiantly upbeat, insisting that the Games will also yield cultural dividends.

“Museums and galleries will benefit greatly from the London 2012 Olympic and Paralympic Games,” said a spokesman. “Not only will there be a huge boost to tourism, but many are taking part in the Cultural Olympiad, a UK wide celebration of arts, culture and heritage.”

But what about other sports? You may think it would have been best to call a halt while all eyes are on the Olympics but cricket, for one, will carry on regardless, with the second Test match against South Africa right in the middle of Olympic fortnight. “Geographically, we’ve scheduled our matches to cater for the impact of the Olympics,” said a spokesman for the England and Wales Cricket Board. “We’re very supportive of them coming to London.”

Pragmatism is the order of the day at the Licensed Taxi Drivers Association, which represents about 8,000 black-cab drivers.

Its general secretary, Bob Oddy, said “quite a proportion” plan to take a holiday during the Games to avoid the predicted traffic problems.

“What we’re really concerned about is there’s going to be a lot of road closures, a lot of road restrictions, a lot of banned right turns that we would normally make,” he said. “Our real concern is getting around, to be honest.”

Oddy is also keen to dismiss speculation that the Olympics will prove a get-rich-quick fortnight for cabbies.

Yes, the Games will obviously generate work around the venues, but that, he argues, will be offset by the number of regular cab users put off coming into the town centre.

“Personally, I think it’ll be pretty much business as usual,” he said, “but there won’t be the same spread of work.”

The mood in London’s retail sector is more positive: a report commissioned on behalf of 600 shops on Bond Street, Oxford Street and Regent Street predicts they will take an extra £16.6m this year as a direct result of the Games, with the Olympic year as a whole driving sales growth of 3.5% in the West End.

But some reject the business-as-usual view. Tom Jenkins of the European Tour Operators Association, says talk of a booming Olympic summer for hotels has led them to raise their prices and put off more visitors than they will attract.

“There’s a misperception in the marketplace that the Olympic Games brings in hundreds of thousands of extra visitors,” he said. “But London has been largely dropped, certainly during the Games, from tour programmes for the American and Japanese market. What we’re looking at during the Games period itself is a major drop in forward bookings, [which] are at least 50% down.”

Jenkins says the tourist sector must act now if it wants to salvage 2012. “We urgently need to ensure that London is open for business because London will not fill up with Olympic visitors,” he said.

“London needs to be full – principally of Londoners, who provide its lifeblood commercially – and it then needs to be full of as many normal tourists as we can get in. And these people will not turn up if they perceive normal London to be unavailable.”

VisitBritain, meanwhile, is keeping its fingers crossed, its eyes on the future, and hoping that 2012 will yet yield a golden Olympic legacy.

“We saw it with the royal wedding last year; we saw figures for April that were normal, but then over the next couple of months – especially June and July – we saw record figures for inbound tourism,” said a spokesman.

“It’s that global showcasing – it may not drive visitors exactly at that time, but it inspires them to visit at a later date.” © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds