News Analysis: Budget Cuts Will Hamper Olympics

Marketing, November 7, 2007 | Go to article overview
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News Analysis: Budget Cuts Will Hamper Olympics

VisitBritain will not be able to undertake any advertising in the run-up to London 2012. Jemima Bokaie reports.

Last month, the Department for Culture, Media and Sport (DCMS) announced it was cutting VisitBritain's funding by 18% over the next three years.

The tourism agency claims the decision will prevent it running any advertising in the years up to London 2012. This has caused widespread outrage in the tourism industry, as many believe that the estimated pounds 2.1bn net economic benefit of staging the Games will be impossible to achieve if the agency cannot market the country abroad.

VisitBritain has a budget of pounds 49.6m, which is split between its international operations (pounds 35.2m) and its domestic arm, Enjoy England (pounds 14.4m). VisitWales, VisitScotland and the Northern Ireland Tourist Board are funded separately and their budgets will not suffer.

Before the DCMS' announcement, VisitBritain had requested an extra pounds 20m in government funding in the years leading up to the Games, which would have been matched by the private sector. 'This would have been spent on a global TV campaign on the same scale as the activity run after 11 September 2001,' says VisitBritain's strategy and communications director, Sandie Dawe.

An extra pounds 20m from the government, matched by the tourism sector, funded the tourist board's last TV campaign. Using the strapline 'Only in Britain. Only in 2002', it aimed to market the country after the foot-and-mouth crisis and terrorist attacks in the US. The campaign, which included TV ads, targeted seven countries and generated pounds 500m in expenditure and 1m visitors.

As a consequence of the budget cut, VisitBritain says it will be able to invest only in PR and digital marketing leading up to the Olympics, which is unlikely to have the same impact.

VisitBritain has already relaunched its individual country websites with the aim of attracting more international visitors to Britain in the run-up to the Games. 'Twenty million people visit our websites annually, but there is a limit to how often we can reinvent ourselves online,' says Dawe, who is responsible for VisitBritain's Olympics strategy.

The cutbacks will have come as no surprise to the tourism board. In May, it was forced to consolidate its international and domestic arms, resulting in 20 redundancies, as part of a pounds 4m cost-cutting process in anticipation of the funding review. It will have to make further cuts in areas such as research to mitigate the reduction of its budget to pounds 40.6m by 2010/11.

'The allocation to overseas marketing hasn't risen since 1997,' says Dawe. 'This means we have not been getting our share of voice in key markets such as the US.

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