THE BLOG

London 2012: The Medal Table of Commerce

10/08/2012 14:55 BST | Updated 09/10/2012 10:12 BST

Were there a medal table for making money at London 2012, there'd be few surprises at its summit. Just as China and the U.S. were a shoo-in for the top spots in the official standings, the International Olympic Committee's ascendancy would be assured alongside McDonald's and Coca-Cola in the commercial Games.

The British taxpayer, meanwhile, would be a dark horse. Spending £9.3bn to organise the Games, we've certainly mirrored Team GB in starting slowly. But, in a damascene conversion to Keynesian economics, David Cameron claims that UK Plc can replicate our athletes' subsequent success and harvest £13bn worth of tourism income, trade deals and inward investment over four years.

A highly speculative figure - as anyone who buys businesses will tell you, projected income is rather less reassuring than historic profit - but London 2012 has already boosted the bottom line for shoe designer Justin Deakin. "We've already done sales to people in for the Olympics and feel it will open up more over the coming weeks," says the eponymous founder of footwear brand Justin Deakin. "It's fantastic for Brand Britain and will attract people from around the world over the next few years."

The construction trade occupied a lofty position in the business medal table long before the torch was lit, with 987 British firms winning contracts for London 2012.

And pubs, cafes and restaurants in close proximity to the Olympic Park and other Olympic venues are, unsurprisingly, prospering. Tom Martin, co-owner of the ETM Group, which owns several London pubs, says The Gun in Docklands has enjoyed a surge in bookings and a doubling of walk-in trade. "Many drinkers are stopping by on the way back from the games," he says. "We've also seen many events booked in by agencies for overseas groups."

Beyond Stratford's benign orbit, however, many retailers and eateries feel they've been misled. Sunday trading restrictions were relaxed and shopkeepers hired extra staff in anticipation of a promised stampede, while Boris Johnson urged Londoners to abandon their city to Olympic hordes that never materialised.

Ghost town

Reports that footfall in central London soared last week will bemuse the city's cabbies describing London as a "ghost town", as well as the West End theatres and tourist attractions where custom has plunged by around a third.

It's no better outside of zone one if the South London Picture Gallery is any barometer. "Having the torch procession pass our restaurant was fantastic," says Hamish Pritchard, co-owner of No67, a cafe inside the Peckham gallery. "There was quite a buzz with a mass of people gathered on the street to cheer it on. But Olympic fever was short-lived. Last week takings were around 30% down on last year."

Pritchard blames media scaremongering. "The emphasis from the press on how bad public transport, etcetera, was going to be made a lot of Londoners want to escape the city. It's quite sad as I don't think first-time visitors are getting a true portrayal of London. It's almost like the heart has been ripped out of the city."

Nearly two thirds of hotels in the capital had rooms available with the Games about to start, according to hotel booking app JustBook. Developers behind the surge in capacity at London hotels since the Games were won in 2005 - a 33% rise in the luxury market and 60% at the budget end - ignored the lessons of Beijing 2008 and Athens 2004, during which tourist numbers actually fell.

"In people's perceptions, availability is tight, rates are inflated and flights are in short supply, hence it's a real turn-off for anyone without tickets for the Games," says Andrew Stembridge, managing director of the Chewton Glen Relais & Chateaux in Hampshire. However, the five-star country-house hotel, which is about 45 miles from sailing events in Weymouth, was compensated with "some very significant exclusive bookings from corporate sponsors."

According to Deborah Clark, a Devon-based hotelier, "the Olympics has had a negative effect on spend in the UK leisure sector which any amount of 'feel-good' can't overcome." Her island-based art deco hotel, Burgh Island, has escaped largely unscathed as a "'destination holiday' with major forward bookings". But restaurant and bar takings at Southernhay House, her boutique Exeter hotel, "have fallen dramatically. A temporary blip perhaps, but it's during prime income weeks in the seasonal-sensitive West Country."

Dan Yates, CEO and founder of PitchUp.com, a camping and caravanning resource, says "many campers are watching the Games at home instead. Owners tell me that they're losing the spontaneous part of the market. Whereas 20 years ago people would plan caravan and camping trips in January, our average for advance bookings is about 15 days."

British cycling success in the Tour De France and now the Olympics can only bolster an already booming industry. "The growing cycling fever has been worth at least 25% more business," says Philip Jenks, a partner in Vulpine, a cycle-clothing brand which had a pop-up shop on the road-race route in Richmond. "When Cavendish rode our shop probably had its best day online and offline."

If opinion is divided over the impact on trade, there's something approaching consensus over the widely-anticipated transport chaos: it simply hasn't materialised. "It's been pretty much business as usual for us," says Daniel Levine-Harris, MD of London courier company Mango Logistics Group. "We haven't witnessed anything like the problems predicted. London hasn't come to a standstill. We've adapted to the different road layouts and found other routes around the City."

London 2012 has been hailed in some quarters as a remedy for the very economic woes which, had we seen them coming, would have deterred us from bidding for the Games in the first place. It's wishful thinking when you consider Citigroup's finding that modest upturns in host countries' GDP during the Olympic build-up tend to be followed swiftly by a commensurate dip.

The macroeconomic benefits are unknowable. Who's to say that, without the Games, spectators from overseas wouldn't have visited the UK anyway, whether this year or next? And if someone buys a Team GB t-shirt, is that a net gain for GDP - or simply a t-shirt not sold elsewhere?

The only meaningful economic debate is about winners and losers. For most small businesses, benefiting from the Games was a matter of serendipity, of being in in the right sector or the right location.

"Whether it's worth the £9bn outlay is an impossible question," says Paul Vincent of menswear brand S.E.H Kelly. "Some of our cloth suppliers are busier than usual, which some attribute to the Games. But perhaps that is a short-term thing - I think the Games' full legacy is long-term and largely unquantifiable."