LONDON—While there is talk of disgruntled business owners in London unhappy with the number of tourists visiting for the Olympic Games, two hoteliers with properties located in high-profile areas of the city said the event has provided them with plenty of visibility.
“For us, it’s been a very positive story,” said Patrick O’Connell, GM of the 583-room DoubleTree by Hilton Hotel London-Tower Bridge. “We’re pretty much full. It didn’t probably come in the way we thought it would. Demand was slower leading up to it, but it has picked up.”
The DoubleTree property is less than two years old and is located in Central London near many of the major tourist attractions.
Meanwhile, a 188-room Holiday Inn property and a 162-suite Staybridge Suites hotel located in a complex that is a little farther than a javelin throw to Olympic Park, is at capacity throughout the games in large part because of an agreement with the London Organising Committee of the Olympic and Paralympic Games. It is the closest hotel to all of the main Olympic venues, including Olympic Stadium.
“What has taken some effort is to manage the demand,” said John C. Wagner, director for Cycas Hospitality, which owns the hotel in a joint venture with Patron Capital Limited, a London-based real-estate investment firm. “For months and months everybody and their dog wanted a room here during the Olympics. We didn’t have them because 95% of the room inventory was given to LOCOG per our contract. We gave the rest to people who would become corporate accounts after the games were over.”
The entire East End of London, where the Olympics are headquartered, has had a successful run thus far during the games, Wagner said.
“This neighborhood and these hotels—the hotels that I’m aware of—are living up to expectations created by LOCOG,” he said. “They did drop a few of the rooms at our hotel (at the last minute), but they were immediately scooped up.
“From everything that I’m hearing, we believe that this is in line with a typical busy summer season.”
O’Connell said he agreed with that assessment, but there was a surprise for hoteliers early on: “There wasn’t that frenetic level of demand people were expecting to see.”
O’Connell said he has heard from his colleagues that all 31 hotels that fly a Hilton Worldwide flag are having success during the Olympics. Wagner said that’s also the case with the 51 hotels in the city under the InterContinental Hotels Group umbrella.
The DoubleTree’s business mix is different than usual, according to the GM. With a large number of guests who work in the broadcasting industry, early morning and late evening tend to have a lot of hustle and bustle, while days are quiet because most guests are at the games.
|Patrick O’Connell, the GM at the DoubleTree by Hilton-London Tower Bridge, said the property’s rooftop terrace and living wall (in the background), combined with its meeting space and Central London location, have been well received by tourists and locals.
“Where the mix has come from has been pretty much from where I expected it to be,” said O’Connell, who served as a revenue manager before becoming a GM. “The number of marginal transient rooms we’re selling is not that big of a number. We did not go out with crazy prices. We went with a consistent pricing model that was pretty much close to normal corporate pricing for us.”
O’Connell said he has seen some heavy discounting from hotels during the games, but his booking pattern for after the world’s largest event is robust.
“Our bookings for the second half of August are strong, and there is anecdotal evidence the West End is starting to see an uptick during that period as well,” O’Connell said. “There’s evidence of more transient business coming into the city then.”
IHG in the zone
The Holiday Inn/Staybridge Suites complex is part of the massive Westfield Stratford City Shopping Centre, which has more than 250 retail outlets. The hotels opened seven weeks ahead of schedule on 30 April, and Wagner said Cycas didn’t factor the Olympics into the business plan because it’s such a unique, once-in-a-lifetime event.
“The original plan was a 250-room Holiday Inn, but to make the numbers work we had to split it,” he said. “We did all the financial modeling based on an October opening. Anything we got from the Olympics was a bonus.”
Wagner realizes it will be a completely different environment once the Paralympics are over by mid-September.
“Most everything has been Olympics related,” Wagner said. “We’re a couple of Olympic hotels now, but come mid-September we’ll have our second opening, when we become real hotels again.”
Lessons to be learned
There are lessons to be learned for hoteliers located in future Olympics cities, according to the executives.
Wagner said his team and just about every hotelier he knows of in London understands the importance of the Olympics to their careers. He said it’s important to provide the best experience for guests while also enjoying the Olympics experience.
“It’s a once-in-a-lifetime experience,” he said. “I’ve opened a lot of hotels, but I never opened a hotel leading up to the Olympics. All of us recognize in our lifetimes we’ll never do any of this again.”
O’Connell said dealing with frustrated demand generators such as tour operators is an important part of the equation for a city’s hotel community, as is building in a cushion for expectations to guard against the Olympic organization committee releasing rooms back into the market in the later stages leading up to the games.
“Be reasonable in your expectations,” O’Connell said. “It takes proper planning.”