Hoteliers that have provided rooms for the London 2012 Olympics at preferential rates have ripped up their agreements with organisers after their inclusion in dramatically marked up packages.
Whitbread has already withdrawn its Premier Inn rooms from use by third parties approved by London Organising Committee of the Olympic Games (LOCOG), and other hotel firms are expected to follow suit.
The move follows last month's news that Thomas Cook was selling rooms in packages at up to ten times the rates provided by hotels.
LOCOG secured almost 56,000 of the 114,000 rooms in London hotels at rates calculated at the average room rate achieved during 2007, topped up by inflation. Some of these have been passed on two third parties who are adding vast mark ups as part of hospitality packages.
Concerned that it appeared to be profiteering, Whitbread has withdrawn its permission to include hotel rooms in packages.
In a statement it said: "We have been disappointed to learn that some of the rooms we allocated to LOCOG have now been passed on to a third party who have significantly marked them up for onward sale.
"As the UK's biggest budget hotel chain we have a clear pricing policy which offers our customers great value for money. We do not intend to allow anyone to exploit our customers during the Olympics or any other major event, and we have asked LOCOG to honour our agreement and withdraw the rooms given to the third party."
The British Hospitality Association said it was now investigating and will meet with LOCOG to highlight the anger felt among hoteliers and attempt to find an agreement.
By James Stagg
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