London hotel occupancy expected to drop during first post-Olympic summer
LONDON, England - Hotel industry experts anticipate a potential slump in London this post-Olympic summer.
LONDON, England – Hotel industry experts anticipate a potential slump in London this post-Olympic summer. Although the British government predicted that an additional 4.5m visitors to the city in the four years after the Games, analysts and industry experts are starting to sense that this may be an overly optimistic view. Historically, post-Olympic years have been quite challenging for hoteliers in host cities as many built new properties for the Games, but were unable to fill them the years after. This leads to more competition and lowered prices. For example, in 2011, one year after the Vancouver’s Games, the city’s average hotel prices fell by 29 per cent as occupancy numbers dropped. The same was seen in Beijing where revenue per available room fell by 43 per cent following the Games.
In London, many are predicting similar trends will ensue following last year’s weaker than expected Olympic hotel demand. Industry experts point out that even amidst the projected tourism boom of last year, the number of tourists to London actually dropped from 3.36m to 3.18m. So, hoteliers assuming a strong and quick rebound during the traditionally slow post-Olympic years could be left with many empty rooms needing to be filled.
“It’s no secret that hotel construction, and therefore quantity of rooms, surged in London leading up to the summer games. But, what is still unknown is how many of those rooms will be filled the years coming. It’s even harder to predict when we take into consideration the weakened European economic climate and declining US tourism rates,” said Tara Stangel, director of Hotwire.com’s hotel team. “However, the good thing is we have plenty of internal data, expert analysis, and prior Olympic cities to assist us in our expectations, and most signs point to the fact that London hoteliers will have to be more creative when it comes to sustaining occupancy during these post-Olympic years. Many seem to sense this already as we’ve seen an uptick in hotels utilizing sites like Hotwire as new channels to maximize revenue.”