The 2012 London Olympics could generate as much as £3bn for the UK economy, a report by budget hotel group Travelodge says.

The study found the games could generate up to £1bn more than the £2bn projected by the UK Government.

Approximately 6.6 million more travellers are expected to visit the UK between 2007 and 2016.

London is set for a sustained period of growth in new hotel development, with 50,000 new rooms needed by 2026, UK newspaper The Independent reports.

Visit London chief executive James Bidwell says London is booming.

“We are the number one city destination for international travel, with 2006 a record year for overseas visitors to the capital,” Bidwell says.

“Retail sales in central London were up 11.6% on the previous year and London hotels are now experiencing their strongest performance levels since the late 1990s.”

Reported by staff writer