Hotel rates in London will more than double during the 2012
Olympics, the hospitality industry competitive intelligence analyst Rubicon
warned on Wednesday. But although the dates of the event, July 27-Aug. 12,
2012, fall during one of the quietest periods in the business travel calendar,
Rubicon warned that hotels may be tempted to hike rates for several weeks
before and after the games.Rubicon managing director for Europe Andy Storey warned that
overcharging would be a mistake for London hotels.
Rubicon expects corporate
business to fall 80 percent during summer 2012 as business travelers assume
that the city will be prohibitively expensive to visit. Leisure tour operators
are likely to be deterred for similar reasons.
"Hotels should be mindful of losing the revenue they
make during the Olympics," said Storey. "Generally hotel owners fail
to put enough attention on the shoulder seasons either side of sporting events,
and this is what causes them to do worse than in 'normal' years. It is no
surprise that hotels will be busy during the event itself, but London
properties should heed warnings and set pricing and market accordingly.
Business traffic often drops off significantly either side of these landmark
events and hotels must be wary of overpricing in these periods."
Last month, PricewaterhouseCoopers said the opening of up to
4,300 new rooms in the London area in time for the Olympics could apply
downward pressure to price in London from 2011. Earlier this week, Deloitte
cited this as one reason why it expects average daily rate in the United
Kingdom capital to fall 2 percent next year, in spite of ADR shooting up 15.5
percent in the third quarter of 2010.