Hotels to benefit from decade of sports events

01 September 2009 by
Hotels to benefit from decade of sports events

The announcement in July that England had won the right to stage the 2015 Rugby World Cup was the latest development in what is being dubbed by spectators as the UK's "golden decade of sport".

The event stands to bring in an estimated £2.1b to the British economy, according to an independent Deloitte report and, of course, the hospitality industry, especially hotels, stands to take a slice of the pie.

James Berresford, chief executive of VisitEngland, said the announcement was a great boost for our "sports mad nation".

"Events are a big driver for tourism in England," he said. "With the 2012 London Olympic and Paralympic Games looming, followed by the 2015 Rugby World Cup and our hopes for a successful 2018 FIFA World Cup bid, England will be placed firmly on the sporting world stage for many years to come. The future is looking very bright indeed."

Previous international sporting events, such as the 2007 Rugby World Cup which was held in France, give an indication as to how much England stands to gain from hosting another world-class championship. Parisian hoteliers achieved more than 50% extra profit in October 2007 compared with the same month in the previous year, according to TRI Hospitality Consulting's HotStats database of hotel operating performance.

Deloitte, meanwhile, confirmed that revenue per available room (revpar) was up 5.8% during the month of June across South Africa as hoteliers benefited from an increase in tourism thanks to the FIFA Confederations Cup and the Lions rugby tour. In July 2006, Berlin managed to double its revpar with a staggering 101.6% rise, when Germany hosted the FIFA World Cup.

And, although the Rugby World Cup does not attract a following on the same scale as football, hospitality operators still stand to gain from the event. Jonathan Langston, managing director of TRI Hospitality Consulting, said: "As with any major sporting event, hosting the Rugby World Cup in 2015 will be good news for the hoteliers in match locations. But given that it is not as much of a draw as football, the anticipation of high levels of demand will not be the same as for the German hoteliers for the FIFA World Cup."

Langston added that it was unlikely that hotels would keep rooms free in the expectation of large crowds arriving into a destination. "We can expect them to apply sound yield management policies, but the allocation of rooms on a large volume scale by the clubs and associations, as happens with football, is unlikely to be a feature," he said.

Marvin Rust, hospitality managing partner at Deloitte, also warned hoteliers not to overcharge during the event. "The key thing to learn from previous events is for hoteliers not to overprice rooms," he said. "Hoteliers have got it wrong before where they were left with empty rooms which they then had to dump very cheaply at the last minute. Proper management of room stock will be key.

"But," Rust added, "as the event will be held across the whole of England, it looks to be a pretty good party all round."

The UK's golden decade of sport

2010 Ryder Cup, Celtic Manor
2011 Champions League final, Wembley
2012 Olympic and Paralympic Games, London
2013 Rugby League World Cup
2014 Ryder Cup, Gleneagles; Commonwealth Games, Glasgow
2015 Rugby World Cup
2019 Cricket World Cup

Hospitality support vital to bid for 2018 World Cup >>

Hotels at sports stadiums set for huge growth >>

Business in Sport and Leisure attacks claim Olympics won't benefit Britain >>

By Gemma Sharkey

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