The Olympic Games for Hoteliers: “What Have the Olympics Ever Done For Us?”

One thing is certain: the Olympic Games will radically shake up the UK hotel industry in 2012. Despite some fears raised by research from the European Tour Operators Association, most assessments for 2012 are positive.

We look at what UK hoteliers can expect to achieve in 2012 and how they should position themselves to capitalise on the peak in demand.

Olympic Games: London-Centric

Although the Olympic Games will be hosted throughout the UK, London will be the main hub of activity. Therefore, London-based hoteliers are more likely to experience the full benefit of the Games, especially those located close to the Olympic Park.

The capital is anticipating 350,000 foreign visitors per day during the Olympic period, and the industry is well-equipped to absorb the extra demand with an extra 13,000 rooms in the London pipeline for 2012.

The extra demand should translate into solid RevPAR growth, as IDeaS Advantage senior consultant, Paul van Meerendonk confirmed in our revenue management Olympics roundtable:

“Hoteliers can expect at least double digit RevPAR growth year-on-year for the summer months. When we consider that the Olympics will coincide with the peak summer season and the Farnborough Air Show, significant RevPAR growth is highly achievable.”

Olympic Games: F&B

It is expected that many other sectors of the tourism industry will also reap dividends during the Olympics. Most notably, F&B operators are preparing themselves for a long, hard (but profitable) summer in 2012. It is estimated that caterers and restaurants will be providing over 18 million meals to athletes and visitors during the event.

The real challenge for hoteliers with strong F&B operations is to position their product appropriately to secure a market share of the F&B revenue.

Olympic Games: Public-Private Partnerships

The Olympics is likely to strengthen the UK hotel industry by fostering more public-private partnerships. It is hoped that this will create a more robust, government-backed business environment for operators.

British Hospitality Association’s chief executive, Ufi Ibrahim, is optimistic about the long-term affects of such partnerships:

“We would like to see far more meaningful partnerships between the private sector, other organisations and local and national government throughout the UK so that the whole country can reap the long-term legacy of the event.”

Already we’ve seen David Cameron pledge his support for the UK tourism industry during a landmark speech in August in which he placed the industry at the heart of the UK’s economic recovery. With support for public-private partnerships in tourism from the very top of government, the future looks hopeful – and the Olympic Games will act as a catalyst for this new business environment.

“At long last we have a Prime Minister who understands the important of tourism,” explained Stuart Harrison from The Profitable Hotel Company in his interview with hotel-industry.co.uk.

“The speech was a profound tipping point in the understanding of how important tourism is to the economy. That is not the same as pouring central government money in to a quango, but supporting the real free thinkers who can make this happen around the world.”

Olympic Games: “Brand Britain”

The greatest long-term benefit to every hotelier in every region of the UK is the strengthening of “Brand Britain”.

Although the UK has good visibility as an international destination, the Olympics will open new source markets for hoteliers to exploit in years to come.

“Brand Britain” will also be strengthened by the substantial investment into the country’s infrastructure and amenities. New and refurbished sporting venues and arenas will continue to attract visitors after the Olympics closing ceremony.

Also, the Games have regenerated parts of London that would not otherwise have been touched. For example, the Olympic Park is the transformation of 2.5sq km of industrial, contaminated land in east London and, after the Olympics, the park will create new revenue generating opportunities for nearby hoteliers.

“Brand Britain”: Hospitality and Fair Pricing

For “Brand Britain” to be successful in the long-term, hoteliers and other tourism operators must ensure that new visitors receive a consistent, high-quality experience. Only then can the industry experience repeat custom from the games.

Already, 300 venues and suppliers have signed up to the 2012 UK Event Industry Fair Pricing and Practice Charter (FPPC), designed to ensure that pricing for the period around the 2012 Games is both consistent and reasonable.

The voluntary code of practice reflects the emerging interplay between public and private bodies and is supported by 21 individual organisations including government and tourism bodies, marketing consortia and industry trade associations.

“The Games will give us the opportunity to showcase what British companies can achieve in providing top class facilities and they will leave a long-lasting legacy,” concluded BHA’s Ufi Ibrahim. “Competitors and visitors alike will leave knowing that the British welcome surpasses that of any other Olympic destination.”

“I’m sure that they will gain a highly favourable impression of Britain during their visit which will encourage them to return. This will be one of the most important parts of the Games’ legacy.”

By Lee Jamieson

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