MOVING IN SOON…
HOTEL stock in London has grown rapidly in the run-up to this summer’s Olympic Games – by as much as ten per cent between 2010 and 2012, according to PwC’s Hospitality Directions Europe report. Not only that, but some of the city’s big name hotels have also enjoyed a refurb ahead of the summer. The budget end of the sector is expanding too. Premier
Inn will double its presence in London by 2016, including 20 new hotels with 3,245 rooms in the two years from September 2011. A recent addition was a 267-room hotel in Stratford with views over the Olympic Park. Budget rival Travelodge, meanwhile, has opened six
hotels in London since 2010 with eight more due to open before the Olympics, totalling 944 rooms. “With millions of tourists expected to visit our capital city next summer, the need for budget accommodation will be at its peak,” says Guy Parsons, Travelodge chief executive. “By July 2012 we will have 54 hotels and 7,705 rooms and will remain the biggest hotelier in London.” That’s all very well, but is the capital’s demand for
hotels now saturated in the long run? “The rules of supply and demand suggest that absorbing the new rooms may not be such an issue during the Olympics or in central London,” says the PwC report. “The real challenge will be to fill those rooms after the Olympics.” Notable hotel openings and refurbishments in the
there will be “significant pressure on inventory and pricing for at least four months” – ie, between June and September. It also believes hotels will offer availability first to their most lucrative clients that offer maximum revenue that have a high level of ancillary spend or want to book meeting space, for example. Robert Milburn, UK hospitality and leisure leader at PwC has modelled three scenarios for London hotel prices in the company’s latest report, ‘UK Hotels forecast 2011 and 2012’. In the ‘mid scenario’ for 2012,
the report shows 4.3 per cent RevPAR growth for the year as a whole, slight growth in Q1, dips in the shoulder quarters (Q2 andQ4) and 20 per cent growth in Q3. “With occupancy effectively capped at 92 per cent for Q3, we should see rates leap whichever scenario plays out,” says the report. The significant amount
“Rates at the moment are around 30 per cent higher than normal with prohibitive conditions attached, such as minimum five-night stays“
of new hotel supply (see panel right) is more of an issue post-Games, but as HBAA executive director Peter Ducker says, the investment in hotel stock in London is “the one thing we can already thank the Olympics for. So many new builds and refurbishments at this stage in a recession is unusual, to say the least.“ The best advice if you want to keep business
as usual is to act now. “Look at security and revise budgets as items like food and beverage
and hotel rates will go sky high,“ says Expotel’s Collier. Adds HRG's Windsor: “Don’t book flights until you have a hotel room, and vice versa, and make sure you have both parts of the trip booked before you commit any money to it.” Clearly, whatever preparations you make in terms of strategy, undertake them sooner rather than later but hold off booking hotel rooms to avoid being fleeced. “UK businesses are slowly waking up to the potential impact of London 2012 on their operations,” says Rick Cudworth, head of business continuity and resilience at Deloitte. “In our most recent Games Readiness report, Deloitte found that 95 per cent of companies will assess the impact of the Games on their operations, but over 50 per cent have yet to start this process, leaving much work still to be done.” If you want to ensure your
business runs smoothly throughout what will be an extraordinarily busy – and exciting – summer, you best begin now!
* Log on to
www.tfl.gov.uk/2012 to benefit from latest detailed, day-by-day, tube and DLR station information and travel advice on transport challenges at certain times and in certain locations from Transport for London (TFL). This month (January) it will be augmented by weekend and Paralympic data for stations and, in March, by data suitable for journey planning systems detailing the Games-time restrictions on London's road network. TFL also runs themed workshops to assist businesses operating in areas of London and the rest of the UK affected by the Games.
run-up to the Games include: the Four Seasons Park Lane re-opened in January 2011 after a £125million refurbishment • The Savoy re-opened after a £220million overhaul in autumn 2010 • The 192-room W Hotel in Leicester square opened in February last year • W’s sister brand, Aloft, moved into the capital last autumn with a 252-room hotel immediately next to the ExCel Centre • The St Pancras Renaissance hotel was restored at a cost of £150million and officially opened in May 2011 • The 300-room Corinthia London opened the same month, becoming the group’s new flagship hotel • Leicester Street’s St John Hotel opened last spring • The new 39-room Eccleston Square Hotel claims to be London’s most hi-tech hotel and is a member of Design Hotels • Part of the Dorchester Collection, the five-star 45 Park Lane hotel opened in September • The 137-room Mercer Street hotel, previously the Mountbattem, opened in Covent Garden last autumn after a £15million refurbishment • Z Hotels opened its first ever property in Soho in October, an 85-room ‘budget boutique’ hotel off Cambridge Circus • The four-star St Ermin’s Hotel in Westminster re-opened last April after a £30million renovation • The 46-room Indigo Hotel Tower Hill opened in summer 2010, the second of the IHG brand’s hotels in the capital • The 70-room Hotel Verta opened in Battersea in autumn 2010 • The Montcalm London City, a five-star boutique hotel opened adjacent to The Brewery events venue in the City • City Inn re-branded as Mint Hotels and opened a second hotel in the capital, the Mint Tower of London • Citizen M, Tune Hotels and the Bulgari Hotel & Residences are all due to open this spring in the capital • The Wellesley, which claims it will be London’s first six-star hotel, and Shangri-La at the Shard – located on floors 34-52 of the building that will be Europe’s tallest – have both missed the Olympic deadline and will open instead respectively in November and in 2013 • Further west, the Waldorf Astoria Syon Park opened for business with 137 rooms and is set amid 200 acres of Parkland between Knightsbridge and Heathrow • At Heathrow, Hilton and Holiday Inn Express have both opened hotels with over 300 rooms at T5, and Premier Inn completed a £2.5million refurbishment of its 590-room Bath Road hotel.
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