30 Jan 2012

Are high hotel prices driving away London Olympics tourists?

As the organising committee for the London Olympics hands back 120,000 hotel reservations, one tourism industry boss tells Channel 4 News high hotel prices are putting people off coming to London.

Aerial view of the London 2012 Olympic Park (Reuters.)

The organising committee for the London 2012 Olympics has confirmed 120,000 hotel places it had reserved for workers, sponsors and the media are no longer needed.

The London Organising Committee of the Olympic Games and Paralympic Games (Locog) said around 20 per cent of spaces will be put back on the market. The rooms, at more than 200 hotels, range from five-star to budget accommodation.

Locog Chief Executive Paul Deighton said: “The hotel industry in London got behind the bid to stage the Games in the most extraordinary way and that support helped us across the line.

Many people have been put off coming to London this summer. They have been scared off because of the high hotel prices. Tom Jenkins

“We always promised that we would not hold onto hotel rooms we didn’t need but return them to the individual hotels at the beginning of 2012. We are now doing this and I hope that this enables the hotels to continue with their planning for this summer as we all work together to stage a spectacular Games.”

VisitBritain Chief Executive Sandie Dawe said: “The fact that such a wide spread of rooms in London will now be made available to the public is great news for overseas visitors wishing to come to the UK to experience the Olympics and all the other wonderful festivities that are taking place over the summer.”

‘Scared off’

Tourism industry bosses agree that hotel prices in London have been driven up over the period the Olympics is being staged. Channel 4 News tried to book a Premier Inn room at the Angel Islington hotel for Friday 27 July 2012 – the night of the Olympics Opening Ceremony – and it was priced at £199. The same room seven days earlier costs just £90, so an increase of around 120 per cent.

Miles Quest from the British Hospitality Association told Channel 4 News now that Locog has released more hotel rooms, tourists could see prices fall.

“One thinks that with a flood of rooms coming onto the market, people might be able to get a bargain. But if there’s a sudden wave of demand for those rooms, prices will go up. It’s simple economics,” he said.

But in a time of economic hardship, will people both in the UK and abroad be put off from by high prices?

Tom Jenkins from the European Tour Operators Association thinks rising costs may have a negative effect on visitor numbers.

He told Channel 4 News: “It’s fair to say many people have been put off coming to London this summer. They have been scared off because of the high hotel prices. There is probably going to be economic decline because of this, but we don’t know by how much.”

However, the British Hospitality Association says rising hotel prices during such a key sporting event are nothing new.

“The Olympic Games is the biggest sporting event in the world, so it is inevitable prices will rise. When demand is high, prices will rise accordingly. It is exactly the same story when Wimbledon is on in London. There is absolutely no evidence I can see that people have been put off coming to London”, said Quest.

VisitBritain projects that this year, the UK should attract 30.7 million visitors, spending a total of £17.6 billion. Spokesman Mark Di-Toro told Channel 4 News: “While these figures are in line with expected numbers in 2011, maintaining current visitor levels would be a good outcome in a year that is proving difficult to predict due to the current global economic climate.”

Referring to rising hotel prices, he said: “There remains good value for those people looking to book accommodation.

“Our advice to visitors is to shop around and keep in mind that if there is nothing that suits your needs in central London, there are many additional hotels within easy commuting distance of the capital, in places like Birmingham, Brighton and Oxford.”