Not all plain sailing at 2012 venue

WEYMOUTH, England (Reuters) - The English coastal resort of Weymouth, once popular with the British monarchy and Royal Navy, is struggling to embrace its new status as an Olympic town.

Selected with its neighbour Portland as the venue for the 2012 sailing regatta, it has received 250 million pounds of investment and been given the chance to showcase its dramatic Jurassic coastline.

More than 100 million pounds of that investment has gone on a new traffic system which Weymouth and Portland Borough Council says will draw in new businesses, holidaymakers and sailors.

Locals agree it will put their town, 214 kilometres southwest of London, on the map but are critical of the new system and say more basic facilities and attractions are needed to keep people interested.

"It (the Olympics) will leave Weymouth as a ghost town after building up false hopes," said Chrissy Johnson, 61, a retired hairdresser, sunning herself on the newly painted esplanade.

"Because of the traffic it will blow up in our faces, it will be embarrassing. We will be a laughing stock."

Officials said the London Olympic Games were expected to rejuvenate sleepy Weymouth after the Royal Navy pulled out of Portland in the 1990s. King George III's 18th-century summer dips have long been forgotten.

The council has devised a strategy to attract a younger, more adventurous visitor, taking advantage of the second-deepest man-made harbour in the world to bring in divers, and promoting its natural environment to kayakers and mountain bikers.

"We are a traditional, Georgian-fronted seaside destination, but we have got to keep moving with people's aspirations," said Jacqui Gisborne of the council's 2012 operations team.

GOLDEN SANDS

The bulk of the tourists currently are pensioners and families drawn to Weymouth's golden sands, or yachting enthusiasts lured by the old harbour with its pretty, pastel-coloured houses.

The former Royal Naval air station in Portland has been transformed into a sailing academy, a 580-berth marina and business park. Nearly 80 homes will be built for competing sailors and will be converted after the Games into homes.

"Inspirational money has come into the area because of the Games," Gisborne said.

However, plans for a major, 150-million-pound development in Weymouth, which would have included a five-star hotel, a new town marina, ferry terminal and revamped pavilion fell through.

Only one of the two former sailors' accommodation blocks at HMS Osprey earmarked for renovation has been developed.

House prices which initially received a 15 percent boost from the Olympics have since collapsed.

Public support for the Games has dropped by 13 percent to 76 percent since 2007, a survey by Bournemouth University showed.

The local population of 64,000 is expected to be boosted during the Olympics by 60,000 visitors a day.

However, guest houses which received enquiries within minutes of Weymouth being chosen, still have vacant rooms as some regular holidaymakers have decided to keep away next year.

COE UPBEAT

Members of the Royal Dorset sailing club, whose patron is Queen Elizabeth's husband the Duke of Edinburgh and whose previous commodores include a Prince of Wales, are not known to have applied for tickets, preferring to watch events on a big screen.

"This is one of those things experience has taught us over many years that yachting is not a spectator sport, at whichever level," Andy Alcock, secretary of the Weymouth and Portland Fishermen's and Licensed Boatmen's Association, told Reuters.

"You're talking about a race that is potentially 3.5 miles away from the nearest piece of land. So who's going to pay for a chair for 50 pounds and look at 50, 60 little boats going around in circles? Nobody is going to know what is going on."

Sailors on the south coast of England and France might want to sail in Olympic waters but they tended to eat and sleep onboard rather than go ashore and spend lots of money, Commodore Graham Castell said from his home overlooking Portland Harbour.

"It is not unusual mid-term to have people focussing on other things," said Seb Coe, London organising committee (LOCOG) chairman, before predicting an upturn in interest next year.

Robert Wilson, partner at local estate agent Wilson Tominey, warned: "I am sure it will be terrific and brilliant, and I am sure it will help the economy for entrepreneur businessmen looking to come down here and settle here or perhaps for second homes but not as much as was first hyped, and I think that is realised."

(Editing by Clare Fallon)