Published on Tuesday, November 8, 2011

London 2012: Don't believe the hype

Amadeus head of hotel distribution Hug o Ehrnreich explains why London hoteliers could fail to find gold during London 2012.

"Anyone who watched this year’s Athletics World Championships in Daegu, eagerly anticipating the performance of the fleet-footed Jamaican phenomenon Usain Bolt in the 100 metres, will no doubt have been left a little down in the mouth. After days of build-up to the event, Bolt false-started, twitching a nanosecond too early, and was subsequently disqualified. The spectacle then became that of Bolt angrily leaving the arena like a stroppy teenager, before a 100-metre dash that most people had lost interest in.  Similar to Usain Bolt, hoteliers have been nervously waiting at the starting blocks, eager to be the first to exploit the predicted Olympic tourism boom. But could they also be set for disappointment?

There has been a similar level of hype when it comes to the impact that the Olympics will have on tourism in the capital. Numerous newspapers have reported that many London hotels have increased their room prices by as much as 400 percent for the two weeks of the Olympic games, and most Londoners are predicting transport Armageddon when vast numbers of tourists descend upon London’s already overstretched tube network.

But will these Olympic tourists materialise in the numbers that are currently anticipated? This was one of the areas discussed at a recent Amadeus roundtable that hosted leading figures from the hospitality industry.  It is important to bear in mind the impact that past Olympics have had on their host cities. It is predicted when the 2012 Olympics takes place next August, there will be 123,000 hotel rooms in the capital. This greatly outstrips the demand generated by any previous Olympic games. We should also factor in that many homeowners themselves will be looking to cash in by offering their flats and houses to visitors, while they themselves escape the mayhem. All in all, it would appear that supply will considerably outweigh demand and could leave those hoteliers that have increased their room rates, with conspicuously empty hotels.

We do not have to look too far back through the annals of history to find the last event that was tipped to bring vast swaths of money spending tourists to the capital. In fact, we only need to go back a few months, to the Royal Wedding. At the time, many were expecting an army of tourists, all hoping to get their share of the Windsor experience. While the streets were indeed lined with well-wishers, hotel occupancy across London that weekend stood at a slightly underwhelming 60 percent.

London is a major tourist destination already, with or without the additional draw of two newly-weds on the balcony of Buckingham Palace, or a Jamaican chap going hell for leather for all of 9.58 seconds. In short, London is well placed to deal with the number of tourists the Olympic games is likely to supply. Many hoteliers risk disqualifying themselves from the main event by focusing too heavily on the gold."

The full Amadeus Hotel Industry Rountable session can be viewed here:


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