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London 2012 Olympics: Will the future for hotels match up to the golden sporting legacy?

1 commentBy Peter Ruddick , 05-Sep-2012

Related topics: Business, Venues, People, Trends & Reports, Olympics, Hotels

London hoteliers have questioned the assertion from the Government and tourism agencies that the hospitality industry will see a boost in trade from the Olympics in the next two years as hotels begin to assess the impact of the Games.

When the last of the symbols and infrastructure from the London 2012 Olympics have gone will a benefit remain for the hotel industry?

When the last of the symbols and infrastructure from the London 2012 Olympics have gone will a benefit remain for the hotel industry?

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With the Paralympic Games now drawing near to a close LOCOG and other interested parties are attempting to work out the success and impact of the games as attention turns to the much-talked about legacy - so too for the country's hoteliers.

BigHospitality has already heard from restaurants and pubs about the mixed impact any increased footfall in the capital had on trade, the supposed 'ghost town' effect in the west end and the impact operating in Stratford and near the Olympic Park had on business.

However hotels, with a direct reliance on tourists and any general increased positive sentiment about 'Destination Britain', arguably have more to gain, or lose, from any Olympics effect.

In a special audio podcast BigHospitality was invited to report from a Boutique Hotel Summit networking event and panel discussion at The Hempel hotel getting views from the upmarket venue's general manager Gareth Banner, Marie Baxter, the general manager of the Town Hall Hotel in Bethnal Green and Chris Foy, head of the 2012 games unit at VisitBritain.

Bottom dropped out

Marie Baxter, general manager of the Town Hall Hotel, said the Olympics had meant the 'bottom dropped out' of its event business

Marie Baxter, general manager of the Town Hall Hotel, said the Olympics had meant the 'bottom dropped out' of its event business

While Banner revealed The Hempel had secured a booking for exclusive use of the hotel for three weeks, other hoteliers suffered from the release of LOCOG hotel rooms , high initial room rates that could not be sustained, lower interest because of travel warnings and not being so close to the capital.

Baxter explained business had been good in terms of occupancy and average room rate, as was to be expected with the proximity to the Olympic Park, but the events and weddings bookings disappeared.

"The bottom just dropped out of it. We have a beautiful historic building - very popular with weddings, events and functions. None of that was happening - Boris did a very good job of scaring everyone away." 

Long game

Turning to the high hopes, Foy said VisitBritain had tried to manage what hoteliers had been expecting.

"This is our moment to shine but it is also our moment to secure long-term business. It is not just about the short-term. From listening to previous hosts we knew the dynamics of Olympics business, who would be coming in, the spend patterns - not so much F&B spend."

Gareth Banner, general manager of The Hempel hotel, warned hoteliers not to rely on a legacy boost from the Olympics with an increase in hotel supply and a possible drop in demand on the horizon

Gareth Banner, general manager of The Hempel hotel, warned hoteliers not to rely on a legacy boost from the Olympics with an increase in hotel supply and a possible drop in demand on the horizon

However Baxter questioned the impact the Olympics would have on the perception of Stratford and Banner was less optimistic about the legacy or benefits of the long game even though VisitBritain are tasked by Government of increasing visitors by 4.5m by 2014.

"I don't want to be a profit of doom here and I certainly hope I am wrong. There has been a 10 per cent increase in hotel supply over 18 months in London and there are a lot of immature businesses in the marketplace that don't have well-established relationships with a customer base."

"When there is a drop in demand and an increase in supply people start doing silly things with price and you either have to join them or stand your ground and live with the consequences. Only the smartest hoteliers and operators are going to be successful in 2013," he concluded.

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Going for gold – how hoteliers can make the Olympic Legacy work out

With more than 150million tweets about the 2012 Olympics Games and over 750million people worldwide tuning into the closing ceremony, there is no denying that London 2012 has captured people’s imaginations. Back in 2007 when the London Organising Committee of the Olympic and Paralympic Games (LOCOG) put in the bid to host make London the host city for the 2012 Olympics Games, the core aims were to increase sport participation across the UK and raise the country’s stakes as a key player in the global tourism market; these objectives were labelled the ‘Olympic Legacy’. But with the Olympic flame extinguished and Great Britain turning its thoughts back to business, it can be difficult for hoteliers to maximise the legacy and drive revenue into their facilitates.

I believe there are key steps hoteliers can take to ensure the legacy is maximised. Here are my thoughts:

1. Fit for purpose: Hoteliers need to ensure their facilities meet the mark. Poor facilities lead to poor revenues. A lick of paint can work wonders to refresh a tired gym or health suite.

2. Champion health and fitness: Don’t isolate health and fitness messages to within your gym facility. Look to promote your marketing messages across all areas of the business – this is more likely to encourage customers to buy into the wider hotels facilities and have a better, more rounded experience.

3. Golden opportunity: It’s hoped the Olympics will inspire individuals who would usually shy away from physical activity to become more active. To capitalise on this we recommend investing in more community outreach programmes that can appeal to a range of different people from children to over 60s. It’s a great opportunity to drive revenue and interest in your hotel facilities from right on your doorstep.

4. Work with what you’ve got: We often see Olympic athletes overcome adversity to get to where they are and it’s this fighting spirit that some hotels need to adopt to insure revenues are maximised. Make sure all empty space is utilised – perhaps you can rent a room to a freelance therapist or maybe you can turn a decent size space into a gym. All it takes is a little imagination….

5. Hub of activity: Hold regular events that appeal to both the community and your guests. Coaching and lectures on health and fitness are great examples of how you can drive new customers into your hotel and enhance the stay for your hotel guests.

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Posted by Kevin Yates
05 September 2012 | 12h19

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