IJC H2 ECONS Case1 SuggestedSolutions

Answer all questions. Question 1 London Olympics 2012 Table 1: Visitors to London 2008 2009 2010 2011 2012 Total Visits (000s) 14,753 14,211 14,706 15,289 15,461 Total Nights (000s) 90,815 85,686 90,318 91,498 94,300 Total Expenditure ( £) 8,126 8,238 8,741 9,411 10,075 Source: Office for National Statistics Table 2: Price of Tennis Olympics Tickets All values in £ Category 1 Category 2 Category 3 Category 4 Preliminary 85 65 55 40 Quarter-Final 115 75 65 45 Semi-Final 115 75 65 45 Final 225 150 110 95 Source: www.ticketslondon2012.com Extract 1: The battle of the Sportswear market It is not only the athletes that will be competing for first place at next summer's Olympic Games. Adidas, the German sportswear brand, plans to use the games as a springboard to overtake its arch rival Nike as the biggest sportswear company in the UK. Nike is currently market leader in the UK with an 18 percent share of the ultra-competitive £4.3bn sportswear market. Adidas is in second place with a 15 percent share, but hopes that its status as official sportswear partner of the Games will help it achieve its goal of overtaking Nike by 2015 at the latest. As well as kitting out the athletes in 25 of the 26 Olympic sports – equestrianism requires very specialised equipment – Adidas will dress the 70,000 Olympic volunteers, provide the outfits for the pre-games torch relay and create clothing for the athletes to wear in the Olympic Village. Adidas is also the Games' official clothing licensee, and will sell Olympic-themed and branded clothes through its own stores and third-party retailers, such as Tesco and Asda. On top of this, it has appointed Stella McCartney, the designer and daughter of Sir Paul, as the creative director of Team GB. She will prov ide the team with garments such as their signature tracksuits and has also designed more fashionable "capsule" ranges that will be available on the high street. There will be a big sustainable and environmentally-friendly

element to the clothing, Adidas said. It is not in conceivable that some of the athletes' kit will be at least partially made from recycled plastic drinks bottles. Adidas has invested around £100m in the 2012 Olympics. This figure is split between the cost of becoming an official partner, the cost of manufacturing the clothes for the athletes, the volunteers and the retailers and the cost of marketing the ranges and the company. Even if the company achieves its desired top line sales of £100m, it will only go some way to paying off the £100m bottom-line investment. Mr Hainer admitted that if looked at purely on a profit and loss basis, the investment is a "big loss". However, he said that the positive benefits to Adidas's brand and standing in the UK are manifold. Source: The Telegraph, 29 May 2011 Extract 2: Olympic Tickets The International Olympic Committee has launched an inquiry into allegations that Olympic officials and agents have been caught selling tickets for the London 2012 Games on the black market. The IOC has held an emergency meeting of its ruling executive following an undercover newspaper investigation. It has referred the allegations to its independent ethics commission, which could lead to a review of how Olympic tickets are distributed among member countries in the future. Sunday Times reporters posing as envoys of a Middle Eastern ticket tout claim to have found 27 officials and agents representing 54 countries who were willing to breach the rules on selling tickets. One, from Serbia, offered 1,500 tickets for £80,000, while China's official ticket agency agreed to sell the best seats in the stadiums for up to £6,000 each, according to the newspaper. Adapted from: The Observer, 17 June 2012 Extract 3: Olympic athletes could be impaired by London Pollution Olympic runners, cyclists, swimmers and even sailors arriving in London on Monday could be taken ill or see their performances impaired by air pollution, health experts have warned. According to Keith Prowse, respiratory consultant and medical adviser to the British Lung Foundation, a summer smog like any of the five already experienced this year in the capital could lead to some athletes needing medication and experiencing chest pains, sore throats and shortness of breath. The effect of air pollution on athletes came to the fore during the 1984 Los Angeles Olympics, where British middle-distance runner Steve Ovett collapsed with respiratory problems after the 800-metres final, citing air pollution as a ma jor trigger for his "exercise-induced" asthma. At the Beijing Olympics in 2008, China banned half the cars in the city and closed down hundreds of polluting factories to avoid medical pr oblems from air pollution. Official advice to the public during smog incidents is to reduce physical exertion, and stay indoors. Air pollution experts say levels of Nitrogen Dioxide (NO 2) in London are comparable to those in Beijing before it banned 50% of the cars. But rather than ban traffic for the duration of the games, Mayor Boris Johnson has opted to try to keep people and cars out of the city with a campaign to encourage them to work from home. A recording of Johnson warning of long delays and congestion is now being played over public address systems at many commuter stations and on the London Tube. Transport for London has said it will wash the busiest streets with a machine similar to a road dust sweeper and then spray a solution of calcium magnesium acetate that literally

sticks the particulate matter to the carriageway and prevents it recirculating in the air. Fears that the 600 miles of Olympic lanes will increase pollution by shifting traffic to other roads have been largely dismissed by Transport for London, which predicts that some areas may see "a slight and temporary increase" in PM10 and NO2 emissions. "Changes to road management during the Games are likely to have "broadly neutral impact on air quality," said a spokesman. Adapted from: The Guardian, 16 July 2012 Extract 4: Post-Olympics Surge in Tourism The Britians have had some good economic news to celebrate over the past few months. Unemployment is falling, house prices in England hit a record high in July and economic output appears to be growing at its fastest pace since 2010. At first glance Britain’s tourism industry appears to be contributing to the economic bounce. Data released this month by the Office for National Statistics suggest that there has been a big increase in foreign tourists visiting Britain since London hosted the Olympics last year. In the first seven months of 2013, foreign visitor numbers rose by 4%, compared with the same period in 2012, and spending was up 12%. In July 2013 foreign visitors spent 30% more than in July 2012, setting a new record. Hotels and attractions nationwide say they are benefiting from the unexpected boost in the tourist trade. According to data produced by STRGlobal, a consultancy, hotel-occupancy rates rose in nearly every English region in the first half of 2013. London, in particular, has seen a surge in foreign tourists since the Olympics ended: hotel-occupancy rates in the capital jumped by seven percentage points to 89% in June compared with a year earlier. The government has been quick to attribute the tourism boom to the Olympics, in an effort to justify some of the £8.9 billion ($14.3 billion) spent staging them. There may be some truth in this. Visits from countries keen on the Olympics increased the most: up by 24% from Latin America and 11% from China, compared with growth of 1% from Europe and a fall of 4% in visitors from North America, according to VisitBritain, a tourism quango. Adapted from: The Economist, 28 September 2013 Questions (a) Compare the trends between total visits and total expenditure of Visitors in London between 2