When the greatest show on earth heads to one of the world’s most expensive cities, it goes without saying that more than a few credit cards will be working overtime. But for the brave souls who are heading to London this summer, a pioneering scheme from its mayor may well mean that at least one of their kids still gets to go to college.
The London Visitor Charter (LVC) might sound like an agreement not to chew gum in Trafalgar Square, but in fact it’s the very first instance of an Olympic host city pledging to provide “reasonable and fair pricing” for the duration of the Games. So far 63 companies responsible for hundreds of outlets — including hotels, restaurants, bars, tourist attractions and transport firms – have signed the voluntary pledge, promising their Olympic prices will be no more than 15% above normal rates.
As Britain faces up to a faltering economy and an Olympic bill estimated to be as high as £24 billion, many would expect Londoners to be licking their lips at the prospect of fleecing wealthy tourists, but surprisingly this doesn’t seem to be the case. “In recent times, host cities have treated the Olympics as a cash cow with businesses tripling their prices for short-term gain,” says Safdar Hussain, who works at a convenience store a mere javelin’s throw from the Olympic stadium in London’s Mile End neighborhood. He is one of many Londoners eager to ensure tourists don’t leave the city feeling short changed. “This is a very poor area and we know we can only truly profit [from the Olympics] if we look at the long-term opportunities and persuade people to come back again.”
Safdar’s sense of duty is one shared by a number of LVC signatories. Lucy Hillyard, international sales manager for HistoricRoyal Palaces (HRP) — the independent charity that looks after landmarks including Hampton Court Palace, the Tower of London and Kensington Palace – says it’s a core responsibility to educate and share Britain’s history with its visitors.
“We were very happy to sign up to the charter as lots of people are going to want to see our attractions. So it’s only fair that we play our part,” Hillyard says. Nearly 13 million people are expected to visit the capital by the end of 2012, and HRP is already experiencing a record-breaking year in terms of visitors. The charity is of the opinion that the sheer volume of tourists in town this summer – for both the Olympics and the Queen’s Diamond Jubilee – means that price hikes are unnecessary. “It’s a great year for London and hopefully we can all benefit,” she says.
But not all businesses are sanguine toward the charter. Many struggling traders are depending on the Olympics to stay afloat and feel that the LVC is unfairly skewed in favor of large organizations. As the U.K. experiences its first double-dip recession since the 1970s, independent black-cab driver Chris Tyson told TIME Moneyland that the LVC will simply make it more difficult to keep his business alive.
“Every other host city has cashed in on the Olympic boon so why shouldn’t we?,” Tyson says. “It’s alright for the big businesses to sign up for this charter as the PR benefits more than offset the loss of margin, but it’s the little man that will ultimately lose out.” Tyson cites Addison Lee – one of London’s largest taxi firms and an LVC signatory – as a prime beneficiary of the charter, saying he believes it will unfairly hamper the chances of smaller businesses to reap the much-needed rewards that others have in previous Games. Other critics charge that big companies are better placed to spread the margin loss across their business and benefit from the PR-induced increase in volume.
Certainly the global reach of social media will make it difficult to justify major price hikes during the Olympics. Price comparison apps and user reviews more readily reveal to tourists where the best deals can be found, and this seems certain to have an impact on how companies set their prices in future Olympics.
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“Businesses are certainly more accountable thanks to social media and this can only be a good thing,” says celebrity chef and LVC signatory Tom Aikens. His restaurant in up-market Chelsea has pledged to keep prices stationary throughout the Olympics, and Aikens thinks the reassurance that tourists are getting a fair deal will play a big part in where they choose to spend cash. “It’s scandalous that businesses hike their prices whenever there’s a major event on and, thinking long-term, it’s our job to ensure visitors leave London with a positive impression and a will to return. The city’s generally quieter in the summer, so business owners should simply be grateful for the extra footfall and take care to avoid alienating their regular customers.”
Merchants may be in some disagreement about the scheme, but one man who certainly backs the LVC is its creator — London Mayor Boris Johnson. BoJo, as he’s affectionately known to Londoners, is currently in full battle mode ahead of this week’s mayoral elections, when he’ll face off against the man who initially masterminded London’s Olympics bid – former Mayor Ken Livingston. It “demonstrates our determination to offer all our visitors both a great deal as well as a great time” was the message from BoJo at the LVC launch last summer, but some have called into question whether the incumbent’s motives are entirely altruistic or an attempt to court big business ahead of the elections.
“Clearly it was a politically motivated decision, but it was a move to ensure a good attendance at the Games and I think it’s a step that any London mayor would have taken,” says Tony Travers, director of the Greater London group at the London School of Economics. “A successful Games will be a wonderful thing for any London mayor to take credit for, but I think the Olympic ‘feel good factor’ is too far away to play a significant role in the voting at next week’s election.”
As in the race for mayor, and the Games overall, there will no doubt be winners and losers in the battle for business at this Summer’s Olympics. But whatever the outcome, London’s visitors look set to be in a rare position of power.
All LVC signatories will have a sticker in their window display verifying their membership to the scheme; here’s a full list.