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Hotels warned not to block-book rooms in Olympics

21 May 2009 by
Hotels warned not to block-book rooms in Olympics

Hotel operators have been warned not to block-book the majority of their rooms for large organisations during the 2012 Olympics.

In a report ahead of next year's football World Cup in South Africa, consultancy firm Ideas analysed the strategy of 40 hotels of different sizes and star ratings in Germany during the 2006 World Cup in order to gauge the common themes and behaviour patterns among hoteliers.

It found that hoteliers tended to block-book large quantities of their hotel rooms to corporate and official bodies in order to gain maximum occupancy.

But, according to Paul van Meerendonk, senior consultant at Ideas, this is not always the way to obtain the highest occupancy or room rate levels, as organisations often overbook and then do not use the rooms.

"Hoteliers tied themselves down with contracts too far in advance, sacrificing much of their inventory for organisations," he told Caterer. "And the problem with organisations is that they don't know exactly what will happen during the event either, so they tend to book huge amounts in advance but might not need all the rooms."

Van Meerendok advised hoteliers to balance their options and to try and keep a 50:50 balance between large corporate bookings and transient ones.

As part of the 2012 Olympic bid, London hoteliers had to commit to a price for 1,800 rooms over the duration of the Olympic Games for the IOC and its entourage. Room rates for the 2012 dates have been set at $290 (£158) for hotel rooms in and around the Park Lane area.

Booking tips for hotels in big events

  • During the 2006 World Cup, hoteliers charged up to 140% more on high-profile match days.  Operators should warn loyal customers beforehand that they may not be able to accommodate them on certain dates.
  • To achieve maximum occupancy, hoteliers should overbook by about 5%.
  • Try to get large groups to extend their stay before and/or after major events to boost occupancy.

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By Gemma Sharkey

E-mail your comments to Gemma Sharkey here.

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