With disquiet among hoteliers about the pricing of ticket and room packages for the Olympics, all eyes are on how hotels will set room rates to be sold direct to guests. Chris Hale, head of London 2012 for InterContinental Hotels Group, speaks to Janet Harmer about the need for fair pricing
Hoteliers are being urged to price their rooms sensibly for the duration of the 2012 Olympic and Paralympic Games in a bid to avoid the controversy that has arisen as a result of the rates being charged for accommodation packages by Thomas Cook.
Á¢ÂÂIHG has an ethical pricing policy in place and we are hoping all the hotels will respect it,Á¢ÂÂ he explains.
Á¢ÂÂThere is something of an urban myth surrounding hotels charging Á£500 per night for a standard room during the Games, but I encourage people to look beyond the myth and be aware of the experience of previous Olympic Games.
Á¢ÂÂThe most recent example is of the Vancouver Olympic Games, when hotels in Whistler were charging $1,000 for rooms that normally sold at $200. But hoteliers were unable to sell their rooms and two days before the Games had to slash prices. They got greedy and came unstuck.Á¢ÂÂ
Hotels in London and other Olympic venues are currently in the process of setting their rates for summer 2012 so that they can be published this July and August Á¢ÂÂ" one year in advance of the Games.
Out of the 121,000 bedrooms expected to be operational in the capital by the start of London 2012, 56,000 have been secured by the London Organising Committee of the Olympic and Paralympic Games (LOCOG).
In recent months the focus has been on the small number of LOCOGÁ¢ÂÂs allocation Á¢ÂÂ" around 8% Á¢ÂÂ" that have gone to Thomas Cook and are being sold with tickets to the sporting events as packages. All the other rooms allocated to LOCOG are for use by sponsors, Olympic officials and the media.
Hoteliers have been outraged that the rooms they have provided to LOCOG at a price calculated on the average rate achieved between 2007 and 2009, topped up by inflation increases, are being sold by Thomas Cook at vastly inflated prices.
Hale believes there has been much confusion about the Thomas Cook rates. Á¢ÂÂIÁ¢ÂÂm not so concerned about the higher priced full-hospitality packages, costing around Á£10,000 for a four-night stay in a five-star hotel, as these are most likely to be bought by companies and are priced at the kind of corporate hospitality rates charged for major sporting events such as Wimbledon,Á¢ÂÂ he says.
Á¢ÂÂHowever, for the lower price packages, we know exactly what the costs are for the sporting events and the bedrooms, and there is an enormous difference with what is actually being charged. We would like to know what justifies this.Á¢ÂÂ
IHG, along with other hotel groups and the British Hospitality Association, continues to wait for clarification from LOCOG on the issue.
consider your pricing carefully
When it comes to pricing rooms that have not been allocated to LOCOG, Hale says hotels should consider that the big spenders, particularly the corporate bookers, are likely to already be catered for. Á¢ÂÂThe majority of people they need to appeal to will be individual guests coming to the Games from Edinburgh, Manchester or Birmingham and they are unlikely to pay Á£500 for a room.Á¢ÂÂ
Hale admits it may be tempting for hotels, who have already had 65% of their rooms taken by LOCOG at a very competitive rate, to publish premium prices for their rooms.
Á¢ÂÂHowever, look at the length of the proposed stay of guests Á¢ÂÂ" you are better at filling your hotels for a longer period at a sensible rate rather than only getting the occasional booking at a very high rate,Á¢ÂÂ he advises.
Á¢ÂÂConsider your location Á¢ÂÂ" you canÁ¢ÂÂt charge premium prices if you are unable to offer good access to the Games.
Á¢ÂÂAnd ultimately, think about the Olympics as an investment for the long term. The Games are an opportunity to showcase London. If you are guilty of price gouging, people will not feel inclined to come back.Á¢ÂÂ
VisitBritainÁ¢ÂÂs tips for fair pricing
Á¢Â-Â Consider pricing for the next 10 years; protect the long-term reputation and brand of your destination. You have everything to gain, but everything to lose if visitors take home negative experiences.
Á¢Â-Â Sign the Fair Pricing & Practice Charter Á¢ÂÂ" play your part in demonstrating the UK industryÁ¢ÂÂs commitment to fair pricing during 2012 to visitors, travel trade and media by signing the charter today and displaying your Committed To Fair Pricing logo.
HOLIDAY INN OFFICIAL HOTEL PROVIDER FOR LONDON 2012
Holiday Inn was appointed as the official hotel provider of the London Olympic and Paralympic Games in June 2009. Chris Hale, head of London 2012 for IHG, outlines the four key benefits of the brand being named the first Olympic hotel sponsor:
Á¢Â-Â An ideal opportunity to promote the Holiday Inn brand which has just completed a three-year, Á£650m refresh in more than 100 countries. Á¢ÂÂThere is an unquantifiable magic about the Olympic brand that explains why companies like Coca-Cola have been involved as a sponsor for so many years.Á¢ÂÂ There are 1,241 Holiday Inn and 2,975 Holiday Inn Express hotels worldwide.
Á¢Â-Â A means of motivating and engaging 20,000 staff in the UK and 330,000 worldwide.
Á¢Â-Â Through working with LOCOG to provide a sustainable legacy for the Olympics, IHG is sponsoring hospitality courses at Newham College of Further Education. Á¢ÂÂThis will help provide us with a pipeline of talent for a number of our new hotels such as the Staybridge Suites London Stratford and Holiday Inn London Stratford Á¢ÂÂ" both which are in the heart of the Olympic action.Á¢ÂÂ
Á¢Â-Â Long-term business opportunities as a result of having an open door to Olympic committees and the national sporting bodies.
IHG HOTELS SET TO OPEN IN THE CAPITAL BEFORE LONDON 2012
Staybridge Suites London Stratford 162 rooms
Holiday Inn London Stratford 188 rooms
Holiday Inn London Commercial Road 137 rooms
Holiday Inn London West India Docks 252 rooms
InterContinental London Westminster 258 rooms
Your guide to the perfect welcome JAPAN To ensure you are equipped to offer the best possible welcome to every international visitor, each month Caterer will feature key phrases in a selection of languages that youÁ¢ÂÂre likely to encounter. This month we look at Japan.
(pronounced as konnichiwa)
Good morning ohayou gozaimasu (formal) ohayou (informal, but mostly used)
Tip: A smiling Japanese person is not necessarily happy. They tend to smile when angry, embarrassed, sad or disappointed.
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