Avoid getting burned by the Olympic flame

The countdown is well and truly under way. There are less than 50 weeks to go to the opening ceremony of the London 2012 Olympic Games, when hospitality businesses across the country can expect to be busier than ever.

Some 56,000 rooms in London have already been secured by the London Organising Committee of the Olympic and Paralympic Games (LOCOG) at highly competitive rates. Now we are beginning to see the prices hotels are charging for the 65,000 rooms outside the LOCOG agreement.

The rates released so far seem to be about double those which are usually advertised in the capital during July and August (page 7). The difference is greater in some cases and more restrained in others - Travelodge, for instance, has raised its prices by only £34, to £99, for rooms in central London.

It is only right that hotel owners and operators set rates with consideration for the expected demand for rooms and hence they have added a premium as they would for any other major sporting event.

After the furore earlier this years when some of the rooms allocated to LOCOG were marketed, alongside tickets to Olympic events, as packages by Thomas Cook at hugely inflated rates, it was vital that hotels were not seen to be price-gouging. Doing so could result in a damp squib of a summer with half-empty hotels and the potential alienation of travellers from both home and abroad in the long term.

There are still many hotels which have yet to announce their rates. They may be holding out for what they see as once-in-a-lifetime high returns, but they should consider that if they don't get it right they may be feeling the negative impact long after the Olympic flame has been extinguished.

Janet Harmer, Hotels editor, Caterer and Hotelkeeperjanet.harmer@rbi.co.uk