LONDON—Hoteliers in London maintain a favorable outlook for the Olympic Games despite the London Organising Committee of the Olympic Games and Paralympic Games returning approximately 20% of roomnights it had reserved in the city.
From luxury to budget, this amounts to more than 120,000 roomnights at more than 200 hotels now back on the market to be sold in time for the July Games.
The terms of the deal with LOCOG, made when the bid was won in 2005, would have hotels provide approximately 40,000 rooms, representing more than 600,000 roomnights, to accommodate the Olympic entourage, which includes the Olympic Committee, media, International Sport Federations, games sponsors and workers.
“We always promised that we would not hold on to hotel rooms we didn’t need but return them to the individual hotels at the beginning of 2012,” LOCOG CEO Paul Deighton said in a news release. “We are now doing this, and I hope that this enables the hotels to continue with their planning for this summer as we all work together to stage a spectacular Games.”
While hoteliers now are tasked with selling the returned rooms, the British Hospitality Association sees the development as an opportunity for hotels.
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Chris Hale
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“The amount released will bring on stream an additional 8,000 rooms for sale, which will give more people the opportunity to find accommodation in central London. We’ve got 110,000 rooms in Greater London and a further 75,000 in the south east, all within easy travelling distance of the Olympics—more than any other Olympic host city,” said BHA spokesman Miles Quest.
Executives from InterContinental Hotels Group, whose Holiday Inn brand is an official hotel provider to the Games, were confident that organizers are adhering to the initial agreement, said Chris Hale, Head of London 2012 for IHG.
“One of the reasons London was successful in winning the bid to host the Olympic and Paralympic Games was because the U.K. hospitality industry agreed to subsidize rooms as part of the bid. Along with all other branded hotels in London, IHG committed two-thirds of its rooms to LOCOG at the time of the bid (2005) at agreed rates,” he said.
“We have a number of sponsors and families of athletes that will be staying with us during Games time via our allocation agreement with LOCOG,” Hale added. “… During the Games we’ll be providing a team of over 90 residential managers, receptionists and concierges to work in the Athletes’ Village.”
In London, IHG has 32 hotels, totaling 5,630 rooms. Two new hotels also are opening to coincide with the Olympics: Holiday Inn London Stratford and Staybridge Suites London Stratford.
Guy Parsons, CEO of Travelodge, shared a similar sentiment.
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Travelodge ramped up its development of properties in the U.K. (such as the Travelodge Edmonton, pictured) in anticipation of the Olympic Games.
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“The agreement clearly stated the Olympic organizers would return any hotel rooms that they did not need at the beginning of 2012 … The 2012 Olympics is a once-in-a-lifetime opportunity to promote British tourism and act as a catalyst for U.K. tourism growth. Our aim over the last seven years has been to become the biggest hotel brand in London before the 2012 Games start, and I am delighted to say we have achieved our goal. Today, we are the largest hotelier in London, and we are on schedule to open a further 11 Travelodges across the capital this year. By the end of July, we will have 54 hotels and over 7,000 rooms across London.”
No fears of oversupply
Parsons stressed there was no concern about a potential oversupply now that the rooms are back on the market—especially given the estimated 11 million visitors expected to travel to London this summer.
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Guy Parsons
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“We have already seen encouraging levels of bookings for this summer, and we are confident the demand for hotel rooms across London will continue to steadily grow as the momentum for the Games develops,” he said.
Travelodge already has announced plans to open 26 new hotels in London at a rate of one a month. This includes the 188-room Travelodge hotel in Stratford, which is minutes away from the Olympic Park, and a 131-room property at London ExCel, which also is very close to the main park and where the boxing, fencing, weightlifting and wrestling events will take place. Rooms will be offered from £19 (US$30) per night.
Overreacting to over-charging
In response to concerns about overcharging in the hotel market for the Olympic period, which potentially could create a negative perception of the hotel market, the BHA is optimistic this will not be the case. Quest said the industry, overall, feels confident about room sales for the games period.
“Yes, there is a danger that people will be put off by scare stories of high prices, but people are sufficiently knowledgeable these days to shop around to find good rates—and they are there,” he said.
“You have to bear in mind that prices in the hotel industry are demand-led, so if demand is strong during the Olympics, as we believe it will be, then prices will strengthen. So when comparing rates, you need compare with those at the time of other major events, like Farnborough (air show) and Wimbledon, to which the Olympic Games are comparable.”
