London Olympics: And the winners are…

The debate on whether the 2012 Summer Olympic Games will bankrupt London’s travel and tourism industry may have long dissipated, but recent events confirm that neither UK tour operators nor London hoteliers will be declared as winners. Based on recent indicators, it has become abundantly clear who is emerging as winners during the London Olympic Games – the “lastminute.coms” of the world and last-minute travelers.

The European Tour Operators Association (ETOA) has long argued that room blocking and overpricing would result in hoteliers “shooting themselves in the foot.” For London hoteliers, the best-case scenario was to sell their rooms at a much higher rate than they would in a normal year. Chris Rodrigues, Chairman of VisitBritain, described the hotelier’s perspective best in my last interview with him. He then said: “I’m going to move my rates much closer to the event when I’ve got a better line on my sight of occupancy, and I will then distribute it through the ‘Expedias,’ through the ‘Travelocities,’ ‘the last-minute.coms.'”

This has not boded well for UK tour operators, as the rooms that they are allotted to in a normal year have not been made available for them to sell and/or the rooms were simply overpriced. Until, of course, recently.

JacTravel, a UK-based wholesaler, has noted “a substantial decline in hotel rates this summer, as the Olympic Games deter visitors.” The wholesalr said: “Rates during the Games have recently been falling from very inflated levels and are now around 40 percent higher than normal. Rates after the Games are currently 15-20 percent down on the same period last year.”

JacTravel, which claims to book over half a million bed nights a year in London, has confirmed that the majority of its hotel partners have opened up availability and reduced rates significantly in the past couple of weeks. “For example, four-star hotel quoting wholesale rates of £300-£400 have dropped them by around 50 percent to £160-£165 (US$248 to US$256). Declines in the lower categories have been even more substantial, with some two-star properties cutting trade prices 75 percent from £200 (US$310) to £50 (US$78).”

Angela Skelly, JacTravel Director, in response to the falling prices, said: “I welcome all efforts by hoteliers to attract visitors during the Games and would even encourage further action. Hotel prices during the Olympics are now at the kind of levels we expect during events such as Wimbledon or the Chelsea Flower Show. Leisure tourists who are not interested in watching sports, could wait until mid to late August, when there are some excellent bargains to be had.”

London-based travel and tourism consultant, David Tarsh, said: “The smart traveler will either come to London after the Games to take advantage of the amazing offers that are starting to become visible or will come to London during the Games at the last minute having found a really attractive deal to enjoy the many fabulous public events that will be happening then. During the Games, there is a lot of availability in the three-star market and below, away from the Olympic Park and the center of town.”

While empty rooms and falling prices may not lead to London’s travel and tourism industry going bankrupt, the situation begs the question: Will London reap the benefits of hosting the Olympics? For VisitBritain’s Chairman, Chris Rodrigues, the key is looking at long-term benefits. He told eTN: “The long-term benefit is that it showcases the country to people in a way that gives you immeasurable coverage. It’s immeasurable showcasing and a call to action for partnership with the industry to get people comparing value stories as to why they should come to Britain this year and in subsequent years. That’s the value of these events.”

Tarsh, in summing the current situation, said: “The people who are saying that the Games will be great for tourism by way of being a ‘showcase for London’ are just desperately trying to save face. The fact is that the Olympics stalls tourism growth – all ETOA’s work proves the point. If the UK were really serious about boosting tourism, it would rapidly overhaul its visa service to make it properly customer friendly; it would cut Air Passenger Duty (APD) substantially, and it would push for the reform of the Tour Operators Margin Scheme in order to enable UK-based tour operators to compete with those based outside the EU. If it were serious about showcasing; it would offer strong tax incentives to moviemakers to shoot in the UK and it would stage more royal pageants.”

Based on public record, the final tab for London Olympics will likely be close to $17 billion. This is according to a report by Margaret Hodge, Public Accounts Committee Chair, in March. Whether London will reap the economic benefits of hosting the Games remains to be seen, but VisitBritain is one entity that is making sure London’s travel and tourism ends up a winner. At least, from a marketing standpoint. For VisitBritain, “The real work begins at the closing ceremony.” That “real work” was described by its Chairman, Chris Rodrigues, as a “whole 4-year program” that is “anchored by a £100 million marketing campaign.”

VisitBritain told eTN: “Alongside the £100 million marketing program, we’re also running a £25 million image campaign in key markets to tap into that exposure of the Games. The GREAT ad campaign is now on hold while the Games are in town, but come the closing ceremony we’ll be ramping up our activity once again with reminders about why the UK is a GREAT place to visit and highlighting some enticing offers to make the desire a reality.”

Ultimately, VisitBritain is keen on sending a very clear message: “We’re very focused on getting people outside of the most-visited city on Earth to explore the countryside and coastline, which offer up such a diverse range of experiences for travelers.”

Between now and the Games, however, those looking to travel to London, whether it be for the Olympics or not, can put their game face on and wait for last-minute travel deals to start popping up soon. Simply put, London is up for grabs.