THE PARTICIPANTS The Debate
arrangements for employees to work from other non-affected offices, changing usual business practices to avoid the flow of traffic, advanced block booking of hotel rooms, negotiations with hotels away from the key locations but with accessible transport links – for example, looking at hotels in Brighton, Basingstoke or Milton Keynes – are all areas which are currently under analysis and are key areas that buyingTeam is looking to understand in more detail. The prospect of an organisation asking its employees to commute between London and Brighton would, under normal circumstances, seem unacceptable. However, this situation is rare and flexibility and negotiations between the organisation and employee will be the key to its success or failure. Such extreme change, however, may not
be needed in all cases. We have had recent experience with some hotels and serviced apartments who are remaining loyal to their corporate clients and have stated that their rates will not significantly rise over the proposed key dates, and they are not booking out large sections of their inventory for the event. We are sensing that some of the smaller hotel chains wish to remain loyal to their clients. In times of economic difficulty, we are seeing a trend in hoteliers trying to maintain long- term relationships as opposed to quick wins. One has even described this as key to their long-term success. The recent demands put on
THE RESEARCH GROUP Andy Storey, Managing Director, Rubicon Europe Rubicon was recently commissioned to do a study for a major hotel chain on the Vancouver Olympics to help them create their strategy for London 2012. We believe that the Vancouver experience will be replicated for London 2012, in terms of changes in hotel demand and prices. The key elements of what happened in
our clients during the economic downturn has heightened the need for successful and efficient supplier relationship management. Hotel and serviced apartments have relied heavily on client loyalty during this period and it is maybe slightly optimistic to assume this loyalty will be repaid. However, maintaining an effective SRM programme can only enhance the potential opportunities available. Following recent large events such as London Fashion Week and the visit of the Pope, we are acutely aware that capacity will be tight and availability is a major concern. Indications suggest that approximately 17,000 athletes, 20,000 journalists, 63,000 Olympic workers and 500,000 spectators will be attending the event at some stage during the competition. With figures like these in mind, it is imperative our clients act now. To combat these potential challenges, our
" Hotels have relied on client loyalty during this difficult economic period, but it is maybe slightly optimistic to assume this loyalty will be repaid"
Vancouver was that the average daily rate for the two-week period of the Olympics increased by as much as 100 per cent year on year and there was also anecdotal evidence that some hotels, particularly those in Whistler, tried for increases above 100 per cent and ended up empty, so there’s a lesson for hoteliers there. There was also a significant drop-off in corporate demand, which started staying away a week before the event and up to a week afterwards into the shoulder period. ADR for contracted business was up by 60 per cent. Of the 120,000 rooms in the capital, the London Organising Committee of the Olympic Games has a commitment of 50,000 so there will still be a lot of rooms out there and there will be availability for the corporate buyer. Vancouver ran at 95 per cent occupancy so there was limited availability of stock but London is a much bigger city. Availability in London will be
taken by people like the foreign media and the Olympic Committee as there is very little accommodation in East London and what there is has been booked by LOCOG – the organisation is expecting 22,500 members of the media to set up in 2012 and they’ve all got to stay somewhere.
Getting contracted rates early is going to be
key. Buyers should consider booking their travellers into the outer suburbs of the city and locations outside London, in places like Reading and St Albans, as those areas will be keen to attract business during the Games. Whether hotels will be loyal to their customers
is a key issue. I think larger hotels will look after their customers rather than make a quick buck in the short term. Bookings aren’t being made just yet and prices haven’t been set but it’s all beginning to move now. Buyers should also be aware that the build-up
key message is that of continuous awareness and early contingency planning. Failing to act now will, more than likely, lead to serious availability issues. We believe a strong supplier management strategy, good relationships with your service providers, coupled with contingency planning is an excellent way to mitigate the potential impact of the event.
to the Olympics will begin soon and constraints on hotel accommodation will occur way before the Games begin, even from early 2011. LOCOG is getting international meetings to test out the facilities as the scale of the event is impressive. Listening to what LOCOG predicts blew me
away – they're expecting to raise $2.3billion in revenues from things like ticket sales and merchandising and their 1,300 employees currently will swell to 3,500 by 2012, assisted by over 70,000 volunteers.
ANNETTE FORBES-MARSDEN DIRECTOR OF SALES, HOTELSCENE
Annette joined Hotelscene in February this year as director of sales. Her career in the travel sector spans over 25 years. Having started in the airline sector, she has since held positions at GetThere and Galileo International in various senior sales and account management roles.
CLAIRE ROWLEY CATEGORY SPECIALIST, TRAVEL, BUYINGTEAM
Claire is a travel category specialist for buyingTeam, a leading European procurement service provider. She has worked for buyingTeam since 2005 and has managed a number of major travel projects, including global TMC reviews, hotel and airline RFPs, travel policy design and implementation, contract management of TMCs/HBAs and implementation of online booking tools.
ANDY STOREY MANAGING DIRECTOR, RUBICON EUROPE
Andy is responsible for Rubicon's European operation. In that capacity, he directs the European account management team and drives the sales and marketing strategy for Europe. He has served as a member of Rubicon's board of directors since its inception in 1999. Prior to co-founding Rubicon in 1999, Storey was a revenue management consultant at Aeronomics Incorporated, a revenue management consulting and software development company. He consulted on revenue management projects in many industries including airline, hotel, car rental, cruise line and broadcasting.
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