The final piece of turf has been laid in the Olympic Stadium, silencing many doubters who believed completion would be delayed. However, this welcome news is not the only reason the Olympics has hit the headlines recently. Many papers have been reporting that there may be massive hikes in the cost of accommodation in London during the Games. The UK last hosted the Olympics in 1948, in a post-war era very different from today’s mobile, international world. It’s therefore difficult to gauge the impact the games will have on demand for accommodation in 2012.
Other recent hosts of the Games have found their estimates of demand for accommodation wildly overambitious. When Sydney hosted the games in 2000, they had just a third of the hotel rooms that London has - 110,000. Over 25,000 more tickets were available for the Sydney Olympics, yet hotel rooms were not filled. This suggests that typical ticket holders either live locally or choose to travel in from further afield, particularly if transport improvements make travelling to the venues easy.
Even estimates of the number of visitors expected don’t answer the question on every accommodation provider’s lips: what price should we be charging?
While no one would like to think of themselves as taking advantage of international Olympics fans, these fans will accept that such an important event falls very firmly into the ‘high season’ category – a concept recognised around the world.
However, some companies appear to be taking it too far. There are reports of tour operator Thomas Cook having secured up to £12,990 for a three night stay in the capital. Although this price is inclusive of game tickets, surely this inflation of nightly rates is enough to deter even the most avid sports fan.
Chris Foy, a spokesman for the government's tourism agency Visit Britain, said: “We will get a much clearer idea of hotel prices once the tickets go on sale but we have heard from tour operators overseas that they are having trouble booking hotels during the Games”. This presents a perfect opportunity for serviced apartment operators to step up and fill the accommodation gap.
Whatever accommodation option visitors decide to use, Visit Britain hopes that hoteliers and other hospitality businesses will sign up to an industry-led 'fair pricing and practice charter' under which they would voluntarily agree to offer fair and reasonable prices between 1st June and 30th September next year. This method relies heavily on significant accommodation providers taking the lead: once they’ve signed up, hopefully others will follow.
So what does this mean for corporate travellers who find themselves caught in the capital on necessary business and need accommodation at sensible prices? Should these people really be penalised for demanding rooms during this period and not rewarded for their loyalty of returning to the capital and bringing with them new opportunities for growth?
At SilverDoor we are constantly being asked our viewpoint on rates during the Olympic period. We feel that wise property operators won’t neglect their regular client base and will show commitment and reliability by retaining a proportion of their apartments for this sector. That said, we’ve monitored forums discussing this hot topic and observed that corporate clients will be prepared to accept a modest increase in rates due to the anticipated higher demand for accommodation as a result of the Olympics.
Let us not forget that all this talk of inflated prices could also have an adverse effect on the market, causing frequent travellers to the capital, whether leisure or corporate, to avoid London and thus avoid paying over the odds.
Ultimately the market will also dictate rates. For some of SilverDoor’s property partners, such as those in other areas of London, the summer of 2012 will pass without any noticeable impact on bookings. For them, the benefits will be seen after the Olympics, when greater investment in transport and public facilities is predicted to have effects that reach much further than east London.
