Profiting from 2012 – The hospitality games

07 September 2012 by
Profiting from 2012 – The hospitality games

The success of London 2012 took many people by surprise - everything worked, including the transport system. So has it been equally successful for the hotels and caterers that hosted athletes and VIPs? Rosalind Mullen finds that no one will admit defeat

Even the most cynical of us surely felt a flicker of joy as rowers Helen Glover and Heather Stanning scooped Britain's first gold medal at the Olympics. Imagine the excitement, then, for the staff at Oakley Court, near Windsor, who looked after Team GB's rowing and canoeing crews.

When Glover and Stanning arrived back at the hotel "the atmosphere was amazing", recalls general manager Richard Smith. "Twenty-seven medals came back to Oakley Court. It's been incredible for staff morale. They've felt involved, motivated and part of the team that helped get the medals."

It's the same story across the industry. While there was a lot of scepticism before the games, it's clear that London 2012 is now a legacy that everyone wants a slice of. Nevertheless, for the hotels that had enough luck or foresight to get involved in hosting the athletes and officials, it's meant years of hard work, both to win the contracts and to see them through.

The 118-bedroom Oakley Court, situated on the River Thames with a quarter-of-a-mile of mooring, was contacted by the London Organising Committee of the Olympic and Paralympic Games (Locog) four years ago. It won the contract not only on location, but because it "had the right approach", says Smith.

In short, it was prepared to invest time and money, be flexible, work closely with the organisers and maintain confidentiality throughout the four-week visit. Smith, who became general manager 18 months ago when Principal Hayley took over its management, spearheaded what was dubbed Project Torch. His remit was to provide food and accommodation for the 110 athletes and back-room team - which included Sir Steve Redgrave.

Effectively, Smith was asked to create a mini-village within the property to shield the Olympians from other guests. Bedrooms, lounge and dining areas had to be "lightly refurbished" and the hotel also took the opportunity to refurbish the kitchen and plant areas. One of the quirkier side effects was having to buy longer beds for the rowers.

Unsurprisingly, the build-up of excitement resulted in a decrease in staff turnover and an increase in motivation. All 122 employees had to be retrained, undertaking WorldHost's Principles of Hosting 2012 courses and even anti-terrorist training. A dry-run weekend in March eliminated last-minute hitches and allowed the athletes to test the rooms, the menus, which were devised with Team GB's chief nutritionist, and the mini-village experience.

"The dry run helped us. Everyone knew their roles and it fitted together," says Smith.

Security has proved to be one of the biggest issues for host hotels at London 2012. Extra support was given to Oakley Court, which had to ensure that all staff in the mini-village had security clearance and that they were checked into work in a "sterile area" every morning.

"It caused a minor headache, as we had to use the same staff throughout," Smith adds.

Needless to say, security caused more of a headache at the London Hilton on Park Lane, which was used exclusively as the headquarters for the International Olympic Committee (IOC). VIPs included all IOC members, their guests, royals, heads of state and senior politicians from the 204 participating countries.

From 18 July to 13 August the immediate area around the hotel was closed to traffic, accessed only by those with security clearance. This meant airport-style security with X-ray scanners and ID passes. The hotel had to partly finance the operation, which included processing 1,200 passes with Home Office security checks. In addition, its security team had to liaise with each country's protection officers.

Indeed, one of the reasons why Hilton's 509-bedroom flagship hotel was shortlisted by Locog and subsequently chosen by the IOC as its designated hotel was because it is situated on an island surrounded by roads that can be closed off securely.

But that's not the only reason. General manager Michael Shepherd made sure his team worked with the IOC and Locog representatives as soon as London was named Olympic host in 2005. This helped the hotel team to understand the requirements, plan ahead and assure the organisers they would be prepared. To avoid over-inflation, room rates, as for all hotels involved in the games, were based on a price calculated on the average rate achieved between 2007 and 2009.

Once the London Hilton on Park Lane had been confirmed as the host hotel, its event planning team set up a series of Olympic surgery sessions held on a weekly basis so that staff could understand the magnitude of the event, deliver guest expectations and have their questions answered. Like Oakley Court, it was temporarily remodelled - but on a much bigger scale. The organisers wanted to transform the hotel into the administration epicentre of the games, which included giving the property an Olympic look. In addition, the 14 private function rooms were made into offices for executives such as president Jacques Rogge and departments such as protocol, PR and media, international relations, legal and scientific.

It's been undeniably expensive, although the company is looking at it more as an opportunity to upgrade and showcase the five-star property. In the past year alone there have been multimillion-pound investments in room and suite refurbishments - on top of the £32.5m already spent over the past four years. In addition, £500,000 was spent on transforming the Galvin at Windows Bar on the 28th floor.

For both hotels it's been a successful PR exercise that has seen them improve standards, put them on a world stage and seen them operate at full occupancy.

At the London Hilton on Park Lane, Shepherd believes this high-profile opportunity - plus the feelgood factor in the capital - has reaffirmed his property as a world-class five-star hotel. Not only has it put itself in line to host other major events, but Shepherd believes many of the key delegates will return to the hotel on subsequent visits.

"The huge volume of compliments and notes of appreciation from IOC members have voiced praise for the warmth of hospitality, friendliness and outstanding service provided by the team," he says.

At Oakley Court, Smith is equally upbeat. Besides boosting staff morale, it has been viable, he says. The athletes arrived two weeks before the Olympic fortnight, so the hotel has had occupancy in the high 90s for the entire month, while the room rate averaged £160. Any spare rooms left over were sold to transient leisure guests, and while there were fewer local diners, he reckons they were put off mainly because of the disrupted road network.

Olympic regulations wouldn't allow Oakley Court to use its role as Team GB host for marketing purposes until the Olympics were over, but now they are, Smith plans to update the website and display photos and signatures from the historic visit around the hotel. "It will give us leverage," he says.

Top tips for attracting sports teams

â- Ideally, have a portfolio of high-profile events already under your belt as proof that you can handle it.
â- Show an awareness of security issues - and be prepared to work out a security strategy with the organisers.
â- Understand the needs of athletes - Holiday Inn provided bed extensions for taller athletes.
â- Ensure you have a flexible kitchen brigade who are prepared to work with nutritionists and to change their menus.
â- Make sure you have the right staff in place and a loyal team prepared to go the extra mile - perhaps draft in staff who can speak the team's native language.
â- Show that you and your staff can be discreet and trustworthy - unless you're a sponsor, the organiser will most likely insist on secrecy.
â- Assess your facilities and be prepared to make substantial investment and even considerable changes to accommodate the needs of the visiting team.
â- Make provision for regular guests.
â- When you win the contract, set up regular meetings with all of the departments and bodies involved.
â- Hold a dry run to ensure that the team and your staff are happy and everyone knows what they are doing.

Setting a new standard in hospitality

Angela Hartnett (rex)
Angela Hartnett (rex)
There were lots of firsts at London 2012. From the industry's point of view, one of the most notable was that the games were the first to offer high-end on-site hospitality to non-sponsors, including F&B and tickets to events.

Prestige Ticketing, a joint venture between Sodexo and Mike Burton, set up hospitality at six venues - the Olympic Park, Horseguards Parade, Eton Dorney, Greenwich Park, North Greenwich Arena and Wimbledon.

It was a major commercial partner of Locog, investing £13.5m in building temporary hospitality structures at four of the sites. Packages were priced at £295-£4,500 per person and some 80,000 covers were served by about 4,000 accredited staff.

"We set a new standard in hospitality. It was on a massive scale. I've had to take time off - I'm exhausted," says marketing director Tony Barnard, who adds that it took two years simply to source all the British artisanal suppliers.

Barnard is unable to disclose profits yet, but says sales amounted to £102m over the 17 days, slightly lower than projected.

"But it's not just about making money," says Barnard. "This was a trial to convince the IOC to do it again in Rio."

If it does, the contract would have to go to tender, although arguably Prestige will be at the head of the queue. Besides London 2012, it has provided hospitality at two international rugby events and Barnard says the joint venture has shown it can market internationally, handle logistics, design and build structures - and invest where necessary.

In yet another first, London 2012 is also thought to be the only time that a named chef has led the kitchen brigade at an Olympic Hospitality Centre (OHC), which provides hospitality primarily for marketing partners and their guests.

The OHC is located within the Olympic Park at Stratford and the chef in question was Gordon Ramsay protégée Angela Hartnett (pictured), creative director of Smart Hospitality, who led a brigade of 132 chefs, of whom 14 were from British Michelin-starred restaurants. They served more than 60,000 guests, preparing over 900 individual menu items.

â- For more on Smart Hospitality's Olympic challenge see the Caterer and Hotelkeeper Interview with chief executive Greg Lawson.

IHG showcases brands on the world stage

Chris Hale
Chris Hale
For Olympic sponsor InterContinental Hotels Group (IHG), London 2012 was a marketing opportunity made in heaven. "We were lucky to showcase our brands on a world stage," says Chris Hale (pictured), head of London 2012 for IHG.

The challenges it took on as a sponsor were, however, huge and included three areas of responsibility:

â- Providing food and accommodation across the UK over 45 nights for 300 of the Olympic Torch Relay entourage

â- Putting two-thirds of its Holiday Inn and Staybridge Suites portfolio in London at the disposal of Locog to house members of the Olympic family, including press, athletes' families and organisers

â- In an Olympic debut, Holiday Inn became the first hotel brand to manage the Olympic Village, providing 75 key staff from IHG properties around the world. General managers, deputies, front desk and concierges flew in to form hotel teams at the 11 blocks of accommodation, which housed 16,000 athletes.

The upside is that since being named as a sponsor in 2008, IHG has been able to benefit from several years of positive PR - particularly through its role at the Olympic Village, even though strict IOC rules meant it couldn't use the information on its website.

In the three years up to the games, IHG has seen an incremental growth in sports-related business, which previously had been under-represented.

"Sports guests have different needs from a hotel," says Hale. "We focused on those needs, and it's business we intend to keep."

Earlier this year, it stepped up the marketing and launched a £5m TV and radio campaign to raise awareness of its sponsorship status, featuring Olympic hopefuls who were to use Holiday Inn facilities, such as BMX world champion Shanaze Reade and windsurfer Nick Dempsey. The result was that the public reappraised the brand and the company saw an increase in preference for Holiday Inn and Holiday Inn Express.

The benefits are wide-ranging. Besides great occupancy during the games, Holiday Inn's involvement at the Olympic Village portrayed the brand as having a meaningful role. Another plus point was that its Olympic profile actively engaged staff. For instance, the company worked hard to connect employees to the games by launching the "Race Around the World" charity initiatives. Employees raised $1 for each kilometre they either ran, walked or cycled. Last year they totted up 70,000km and this year a whopping 350,000km.

The company also sponsored a substantial number of A-class British athletes and staged high-profile events to give the public the chance to train with Mo Farah and Mark Cavendish under the banners "Running Club with Mo" and "Ride with Cav" at Holiday Inn hotels in London.

"We gave our staff experiences - there was staff engagement in sports," says Hale.

The result is that, in a survey, 90% of staff said that involvement in the Olympics made them feel more proud about working for the company. This has led to staff retention, which in turn has led to better service.

"It's a powerful virtual circle," says Hale.

So was it financially viable? The London hotel industry had agreed to provide below-market rates for the Olympics, worked out on a hotel-by-hotel basis, but IHG obviously had to pay a sponsorship fee for the marketing rights.

"I can't give you details of the fee," says Hale, "but I will say that it was offset many times by revenues and future revenues."

And he points out that IHG still had to compete against other major hotel companies to become a sponsor.

As a business case, then, Hale is convinced of the long-term benefit. And, taking a holistic view, he says the Olympics helped people around the world to see London in a new light and that will translate to more inbound visitors - of which, he now reckons, IHG will attract a large number.

*Our Profiting from 2012* series is published in association with ACT Clean and People 1st

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