The latest in the economic rollercoaster that is Welcome to Yorkshire’s ambitious Grand Depart is that they might have under-estimated an important tender resulting in a £2.3m shortfall.
I don’t think this is the first or last time the project will find that their hopes are matched by the expectations of reality.
A while back, I did some scribbling of numbers of rooms given accommodation was the biggest ticket in the London Grand Depart 2007 numbers (£47m across 2 stages). It’s quite dry on paper, but bear with me.
A rough estimate says Yorkshire has 180,000 bed spaces per night in total. [http://www.yorkshire.com/mediacentre/yorkshire-facts (pop. France = 65.5m/365)]
That’s hotels, guesthouses & B&Bs: ” Yorkshire provides a choice of over 4,868 hotels, guesthouses, self-catering units and campsites with enough bed space to accommodate the entire population of France over the course of a single year.”
So given historic average occupancy of around 50% without the Tour, that leaves 90,000 existing beds available.
[these are handy reports for that sort of info http://www.visitengland.org/Images/July%20EOS%20Newsletter_tcm30-38738.pdf]
The average Leeds hotel is £70 per night. So that’s around £6.3m that it can take per night with every existing bed in Yorkshire taken. [http://www.bighospitality.co.uk/In-the-Spotlight/Hotel-Trends/UK-hotel-rates-slip-as-London-capitalises-on-Olympic-boost ]
At a very generous estimation that everyone stays for a week and you count that as direct economic benefit, then you’d get £44.1m or so.
The London figures of £47m are focused on spending over about 4 days from what I can see in the documents available.
But it’s possible that some did indeed stay for longer, with the Tour forming one component of their time in London. However, there’s nothing to suggest everyone coming to London took an entire week of holiday.
EDIT 03/06/2014 – TfL’s report does actually give a breakdown of stay duration for overseas visitors: “For attendees from outside the UK, numbers of nights away from home were typically higher: One third expected to be away for 4 – 6 nights, a quarter for 5 – 7 nights, 16% for 8 – 10 nights and almost a quarter for more than ten nights.”
In fact, London average daily room rate is almost double Yorkshire at £120 according to the survey mentioned earlier. PWC pushes that figure even higher to around £140 a night: http://www.pwc.co.uk/hospitality-leisure/uk-hotels-forecast/overview-november-2013.jhtml
Figures for campsites & popups would obviously bring in more, but say you hard count the nights the race is in Yorkshire to include the presentations and so on, you’re still way short of the basic number London claimed with more available rooms and a much higher average daily rate per room. I think (but haven’t double checked) that the London figures didn’t include campsite accommodation.
London and Kent generated that £70m or so in total economic impact for a capital city and its surrounding area in a boom economy, with a possibly generous spectator count over two days.
How likely is it that Yorkshire will be able to generate its claimed £100m over two days with a more limited accommodation portfolio in a – relatively speaking – remote region, faced with a global economy still creeping around the fringes of austerity post-2008?
UPDATE 24/03/2014 – attempting to compare like for like date
I mulled over these figures at the weekend, trying to see if there’s a more obvious way to illustrate the challenge Yorkshire faces. So, purely as indicative…
In 2007 London room rates were, as far as I can see, still considerably ahead of the rest of the UK. I’ve looked at Greater London Authority figures which put it at over £100, possibly closer to £115-£120 in 2009 [http://www.london.gov.uk/sites/default/files/wp53.pdf]
Caterer & Hotelkeeper gives the average hotel room rate (which excludes cheaper B&B, self-catering and other beds) as £128.78 in June 2007 [http://www.catererandhotelkeeper.co.uk/articles/6/6/2007/314240/the-bench-london-weekly-hotel-performance-to-3-june-2007.htm]
So pitch where you like between these figures, including that after 2007 you have a massive financial derailment that will need to be priced in somewhere.
A draft document from Rotherham council in Yorkshire [https://moderngov.rotherham.gov.uk/documents/s19893/Business%20Plan%202007-8%20v2.doc%20app%20A.pdf] gives the baseline room rate as £55 in 2007/08.
So if London was over £100 (conservatively) average room rate in 2007 and Yorkshire is now £70:
£100 – £70 = £30 difference between the average room rate at the time of the event.
30/70 x 100 = 42.86% is the percentage increase in potential revenue per room that Yorkshire would need to match London.
So for Yorkshire to do similar like-for-like revenue there would need to be a 42% hike in its average room rate.
Or, Yorkshire needs to find 42% more accommodation revenue to match London’s in 2007.
Does that mean it needs 42% more people coming and staying to match London? I’m not sure how these things are calculated and would welcome anyone who can tell me if this is entirely the wrong track.
Transport for London research claims that over the Grand Depart in 2007 “estimated attendance was around three million or more in London and Kent” [http://www.tfl.gov.uk/assets/downloads/businessandpartners/tour-de-france-research-summary.pdf]
So does this mean Yorkshire needs to attract 4.29m over two days to match London?
To put that in context: “The Tour de France attracts 12 million spectators along the route in a typical year’s race” according to Welcome to Yorkshire’s own materials [http://letour.yorkshire.com/news/tour-de-france-the-facts]