Olympic Games rate hype underway in London

While there was some rioting and looting in the streets of London this past weekend, hoteliers are seemingly very optimistic about the windfall rates they will garner during the 2012 Summer Olympic Games, which are now less than a year away.

According to a report in Friday’s edition of The Daily Telegraph, prices being quoted for the July 27 to August 12 Olympics are well in excess of this year’s summer numbers. For example, it sites a double room at the Sheraton Park Tower in Knightsbridge quoted at US$988 (£605) for the Games, compared to its price this month at US$341 (£209) a night. A night at the W London, in Leicester Square, costs around US$473 (£290) this August. The same room during the Games will cost just under US$882 (£540). Even bigger increases can be found at the Berjaya Hotel in Kensington, which usually sells between US$145 (£89) and US$325 (£199). During the Olympics, it is reportedly posting rates at US$1,632 (£999) a night.

The question is, will these rates hold up and is it good business?

“In Athens [host city of the 2004 Olympics] around 15,000 hotel rooms were sold. London has 125,000 rooms to sell. Such optimistic pricing in the face of such disparity is extremely brave,” the Telegraph quoted Tom Jenkins, chief executive of the European Tour Operators Association (ETOA). Jenkins also told the Telegraph that overpricing rooms for next summer would hurt London’s status as the gateway to Europe and force long-haul visitors to holiday on the Continent.

London Mayor Boris Johnson started the London Visitor Charter last month to identify businesses trading fairly during the Games. The Telegraph also reported that so far more 40 companies and venues had signed up – none of which were hotels.

The Telegraph quoted a spokesperson for Starwood Hotels, which operates the Sheraton Park Tower and W London, as saying, “Our prices over the Olympic period are based on the rates we charge during other high-demand periods in London. We take a long-term view and we certainly will not alienate future customers by overpricing rooms during the Olympic period.”

Starwood added that it had withdrawn its allocation of rooms to Thomas Cook, the official holiday provider for the Games, in protest of its highly priced packages. Starwood also has signed an agreement with the London’s Olympic organizing committee to provide up to 50,000 rooms at a “subsidized” rate to be used by sponsors, media and Olympic committee members.