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

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​

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."

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.