The Government's 2012 Olympics tourism strategy has once again been called into question after it emerged that Visit London is being forced to make redundancies because of a real-terms cut in its budget.
In the week that the capital's tourist board predicted that Team GB's outstanding performance in Beijing would boost domestic tourism during London 2012, Caterer has learnt that Visit London will receive a smaller-than-anticipated budget increase in 2008-09 of just under 2%. The current rate of inflation is 4.4%.
The announcement comes weeks after national tourism agency VisitBritain began talks with staff over plans to cut 40% of employees after its funding was slashed by 18%.
Visit London said that a number of positions will be made redundant, although it would not confirm a figure.
A spokesman said: "Due to the less-than-anticipated increase in Visit London's budget, some readjustments to planned programmes need to be made. However, these will not impact on marketing budgets. The reduced budget increase is not expected to have a major impact on London's tourism industry or our preparations for 2012."
Kurt Janson, policy director at the Tourism Alliance, said the timing of the announcement could not have been worse.
"Coming off the heels of the 18% reduction in funding for VisitBritain, the below-inflation increase of funding for Visit London is very disappointing," he said.
"The Beijing Games show just what Britain can achieve with proper investment in its athletes. In the same way, Visit London and VisitBritain need additional Olympics-specific resourcing if we are going to win the tourism gold medal in 2012."
Last week, VisitBritain and Visit London held a reception to present London and the UK as host city and host nation of the 2012 Olympic Games and Paralympic Games to the Chinese travel trade and media.
By Gemma Sharkey
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