The Debate AT THE INN? NO ROOM
With the London Olympics set to swell hotel occupancy in the capital, will corporates be left fi ghting for the leftovers when summer 2012 arrives? Three experts have their say
THE HBA Annette Forbes-Marsden Director of Sales, Hotelscene Although the London Olympics are still some way off, information is trickling out all the time and we’re advising our corporate clients to think ahead about their accommodation needs during the Games. Many companies will be looking to avoid staying in the capital during this period, but there will always be some essential business travel. At least they’re taking place during what is traditionally a quiet period for corporate travel, the summer. This will lessen the overall effect on business travel and corporate programmes, though there will undoubtedly still be some impact – it’s inevitable that room rates will increase during the Olympics to some degree. That’s why we’re suggesting to our clients that
they change their travel plans, look to alternative cities for meetings and events, consider using serviced apartments instead of hotels, increase their use of videoconferencing and try and avoid non-essential travel. For those that must travel to London during
the Games, we’re working with hotels to honour the corporate rates they have with clients, or at least introduce a ceiling rate so that corporates will know the most they’ll have to pay and can therefore budget. Unfortunately we expect there will still be blackout dates as LOCOG – the London Organising Committee of the Olympic Games – has commissioned around 50,000 hotel rooms across 260 properties, representing on average 65 per cent of the available inventory in each hotel. The remaining 35 per cent of inventory at these properties is likely to be sold at whatever the hoteliers can achieve, and some will take advantage of this. Hopefully they will bear in mind the loyalty of their corporate customers. We have spoken to a number of suppliers who, although they have not fixed pricing yet, are stating that the ‘fair and reasonable’ approach for LOCOG accommodation should extend to pricing across all other accommodation. Those that have intimated that this event will
be exploited for optimum profit would do well to remember that their corporate clients will be around long after the event is over, and will
not look kindly to being ignored in favour of the highest bidder. Both hoteliers and corporates also need to
bear in mind the lessons learned from previous games. At the Athens Olympics there were massive rate hikes to ridiculous levels which priced people out of the market, while at the Beijing Games there were so many new-build hotels that the volumes weren’t sold. London should be more stable in that respect because there will be very few new-builds in the city, it’s a busy city anyway, and many of the Olympic events are spread around the country. Hoteliers won’t just be considering rates though, they’ll also be looking at which clients will be most lucrative overall. They will assess their business mix – transient corporate versus conference and meetings versus leisure – and decide which generates the most revenue. What changes a ‘good’ client into an ‘excellent’
client is their ancillary spend over and above the room rate they pay, on food and beverage, hospitality etc. The more ‘attractive’ you are, the more you’re likely to get first refusal on what inventory there is available. If you don’t already have an extended contract period for your negotiated corporate rate
programme, there is nothing to be gained by trying to put one in place solely to cover the London Olympics. There are many reasons why a two-year rate programme can benefit corporate and supplier but regardless of the contract period, the hotels will either blackout the period of the Games or create a high season and increase the rate.
THE BUYER Claire Rowley, Category Specialist, Travel, buyingTeam Our clients' visibility of this as a potential challenge or issue varies depending on, to some extent, if they are directly involved in the event, their proximity to the various locations, their accommodation needs and demands, and their planning processes. Early indications have been mixed and we
have experienced some properties – mainly serviced apartments – already blocking out inventory in anticipation of the key dates. buyingTeam is encouraging its clients to act early and we are seeing a steady rise in requests for contingency plans and alternative solutions. Longer term hotel contracts, improvements in videoconferencing facilities, making
20 I THE BUSINESS TRAVEL MAGAZINE
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84