The Olympics of Spending: Visa Stats from the Games’ First Week Reveal Surprising Trends
Ever wonder exactly how the Olympics benefit a host city? Well, Visa – which we all know by now is a proud sponsor of the Olympic Games – recently released spending statistics from the first week of the XXX Olympiad that can help shed some light on that.
International visitors to London spent $700 million on their Visa accounts July 23 – 29, according to the card network, with travelers from the US, Japan, France, Italy, and Australia accounting for 36% of this outlay.
What, you ask, are they spending all that green on while watching their countrymen compete for gold, silver, and bronze? As you might expect, airline and hotel costs are major contributors, with tourists spending $82.9 million and $69.3 million in these categories, respectively, during the first week. These numbers aren’t quite fully representative either, as it’s likely that a lot of people pre-paid for their flights and hotels or haven’t checked out yet. In addition, people spent $95.5 million on “Entertainment,” which includes theater tickets and other common attractions, and $71.8 million on purchases made at “Other Retailers,” such as bike shops and antique stores.
The biggest expense category for the first week of the Games may surprise you, however. Visitors spent $133.7 million solely on “Services,” which Visa says is comprised of things like jewelry and shoe repair and trips to the spa. That’s a heck of a lot of massages and mud baths!
The Olympics simply give people an excuse to travel abroad as well, and Visa reports show that people are taking advantage of it, especially those from Central and South America. Cardholders from Nicaragua, Honduras, Guatemala, and Bolivia all spent over 300% more in the United Kingdom during the first week of competition than they did during the same week in 2011. Travelers from Belize, El Salvador, Argentina, and Uruguay all spent over 100% more.
The real question, though, is whether the ultimate economic benefit of the Games to local businesses and the British economy will outweigh the cost of hosting it.
British Prime Minister David Cameron now projects England’s Olympic tab to run roughly $14.4 billion. We’d need at least 20 more weeks of tourist spending equal to that seen in the Games’ opening week in order to break even (the Olympics last a little over two weeks), but as we all know the economic benefits of a massive event the likes of the Olympics aren’t derived solely from the spending boost provided by visitors.
"The single massive positive impact of the Olympics is the clearing and redevelopment of a vast, unusable space," according to Tony Travers, a professor at the London School of Economics (LSE), as quoted by the Christian Science Monitor. "It is now all cleaned up and ready to use for a city with a fast-growing population."
That’s not the only benefit that Travers envisions either.
"What they see is a chance to get people from all over the world, particularly from countries with large capital, large amounts of capital to invest, they want to get them into London to show them what it’s like, to show them that Britain is a relatively secure place to put their money, that it’s a politically safe place where government and opposition agree on balance on inward investment and the way foreign companies are treated,” he told China News Daily.
Not all experts agree about the economic benefits of the London Games, though, contending that the value will be perhaps less tangible.
"It's not going to be a substantial change," Rodney Barker, a professor of government at LSE, told CBC News. "But it's going to become part of our memory, part of who we are. It's like the death of Princess Diana and how we responded to that, it adds to our sense of national distinctiveness.”
That better be worth a lot to the British people, as the last few Olympics have left host cities mired in debt that has taken years to pay off.
Finally, it’s important to note how US travelers who are either reading this from the Games or prepping for a trip across the pond can avoid having their experiences marred by unnecessary fees. Using a no foreign transaction fee credit card for all purchases as well as declining any merchant’s offer to convert purchase totals into US dollars will go a long way in enabling consumers to get the lowest exchange rate possible and save up to 16%.
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