Olympic Games Hotels: Profiteering Concerns
Are London hoteliers profiteering from the London 2012 Olympic Games and Paralympic Games? That’s the accusation that has left many hoteliers furious at the news that some Olympic packages were being sold for high prices by Thomas Cook, among others.
At the end of last week, key figures come together to discuss the situation, including the British Hospitality Association (BHA), the London Organising Committee of the Olympic and Paralympic Games (LOCOG) and Thomas Cook.
“Recent press comment concerning the prices that agents appointed by LOCOG – in particular Thomas Cook – are charging for Olympic ticket and hotel packages has suggested that London hotels are profiteering,” said BHA chief executive, Ufi Ibrahim. “This is certainly not the case. London hoteliers have no control over the prices that agents are charging.”
LOCOG went further to protect the reputation of London hoteliers and confirmed that they had fully conformed to its fair pricing agreement, offering room allocation to LOCOG at below market rates for the Olympic Games.
Olympic Games: Fair Rates for Hotels
London’s major hospitality companies have signed agreements to provide a total of 56,000 rooms to LOCOG.
“These agreements stipulate that all participating hotels will charge room rates calculated on an agreed formula, which restricts hotel operators from increasing prices beyond CPI increases and ensures fair pricing,” added Ibrahim. “That rate broadly represents the average of a hotel’s room rates between 2007 and 2010.”
“Without exception, the prices charged by the hotels that are part of the LOCOG agreement are at a rate which is fair and reasonable. There is no question that hotels are profiteering – indeed the opposite. London hotels have agreed to let these rooms at below the current market rate in order to support the Games. Accusations that they are profiteering are totally unfounded.”
Despite the swift damage limitation efforts by the hotel industry, concerns over profiteering are likely to continue into the Spring.