Published on Tuesday, July 31, 2012
Many UK hotels say the promised influx of Games visitors is not bringing the benefits they were hoping for, with some being forced to slash prices as the Olympics deter their usual visitors from coming this summer.
The event is believed to have drawn an extra 100,000 foreign visitors to London, but hotels and tourist attractions fear a large percentage of the 300,000 tourists who would come in a normal year are staying away.
Of the 2,500 hotels who responded to TripAdvisor's half-year survey, the majority claim the Olympics won't have any effect on their business, although a little over a third believe they will see a positive gain in either the long or short-term.
One disillusioned hotelier cited the "negative impact of the Olympic games" as this year's worst surprise for business.
"The Olympics has made summer trading difficult - overseas custom is down significantly on last year" said another frustrated respondent, while a third owner said: "Olympics has been a non-event for occupancy!"
Hotels that inflated prices in the run up to the Olympics have been forced to slash them in recent weeks; research by Hotels.com showed last minute prices had dropped by a quarter.
Tourist attractions including museums, art galleries and theatres say their business is down by as much as a third year-on-year as visitors are staying away from the centre of London.
However, 79% of the 2,500 UK accommodation owners who responded to TripAdvisor's half-yearly Industry Index described their businesses as profitable or very profitable in the past six months, making UK accommodation the third most profitable in Europe, behind Turkey and Germany.
One in four said they had increased room rates in July and August and 23% plan to increase their rates ahead of the autumn.
Owners became more optimistic during the first half of 2012, with 27% of respondents saying they believed the economy would improve during the last six months of the year. In December, only 19% expected the economy to get better in 2012, but only 7% of UK hotels said they expected to hire staff within the next six months compared with 29% in Turkey, 19% in Germany and 16% in Spain.
The report, which claims to be the world's largest hotel survey, attracted 25,000 responses worldwide. It revealed that 29% of UK hotels believe the eurozone debt crisis will have a major negative impact on their businesses over the next six months.
"The TripAdvisor Industry Index underscores the current global economic climate, as hoteliers in North America, Asia-Pacific and Latin America are all approximately twice as likely to report being profitable in the last six months than hoteliers in the EMEA region," said Christine Petersen, president, TripAdvisor for Business.
"This trend is also reflected in the global economic outlook; over one quarter of respondents from the EMEA region think that the economy will deteriorate, making them less optimistic than any other region."
Greece is the country where hoteliers are most likely to discount their rates in the next six months, followed by Spain and Italy. In Greece, 58% of hotels said they were likely to discount, followed by 43% in Spain and 36% in Italy.
By Linsey McNeill
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The recent insolvency of Low Cost Travel Group, one of the large players in the travel industry had a big impact on the travelers, hotels and all related players from both wholesale & retail arms. There were about 27,000 people on a holiday who had booked through the company comprised of a €200 million wholesale arm and €500 million OTA / retail arm.