15 Oct Did media and greed kill hospitality during the Olympics?
I saw an interesting article earlier today on BigHospitality which reported that visitor numbers were down during the Olympics 2012 – the Office of National Statistics reported that there were 5% less international visitors than the same time last year, with International Visitors numbering just 590,000…. WTF? *sorry*
I just do not understand several things:
C) What the hell happened?
So, I am going to rant my way through them, disseminating and dissecting as I go (because this usually works)….
Let’s start with the ‘how’ which is fairly obvious – we attracted fewer visitors. Looking at it, there should be no reason for not attracting at least as many, if not more, international visitors. Well the situation of the world has everyone in a squeeze – I think only the United Arab Emirates and Germany have managed to remain away from the verge of bankruptcy (I still don’t understand how a country can go bankrupt – does that mean bailiffs can confiscate the country???) – but the point is that even though the countries are in a poor financial situation, it does not mean all it’s citizens are.
But this is something that a lot of people have not understood. Take for example the findings by Which? in early 2012, where a room at Holiday Inn Express, Stratford, for a double room during the olympics was £410; book a week later when there were no Olympics, the same room was £79. There was also the Best Western Ilford, selling rooms at £345, the following week would be just £64! Trivago even noted that in June to July 2012, prices across Europe fell for hotel rooms – except London, where they rose by 15% with an average rate of £210 a night – again the most expensive in Europe!
Unsurprisingly, when the rooms did not fill, hotels dropped room rates in order to get people booking rooms. As The Telegraph reported, rooms were being sold at slashed rates in order to fill empty beds, that quite cleverly were blamed on allocation release from media etc (like that has never been given as an excuse by a sales manager or revenue manager before!?).
So there we seem to have a how – greed from hotels trying to capitalise as much as possible on tourists and visitors – I wonder what rate they would have offered me if I had walked in off the street? The revenue management strategy was all wrong anyway to be holding so many rooms on allocation that upon release the average room rate and occupancy rate takes such a dive that you have no option but to start cutting prices – another example to me of where revenue management falls foul of traditional models or poor guesswork. I understand rate parity and fluctuations – the whole attitude of supply vs demand, but there comes a point where you have to actually take a step back and ask ‘would I pay that much?’
Now we get to the ‘why’ – well if you were conscious at any point during 2012 prior to the Olympics you will have heard all the reports of traffic disruption, strikes, bottlenecked roads, insufficient transport systems, and general alarms of ‘avoid the area at all costs’ – the whole Olympic Park and surrounding transport system was portrayed as this impassable fortress of driverless tube trains, back to back cars and general chaos of apocalyptic proportions! Guardian-Series reported that Transport for London were advising people to expect major disruptions and either stay at home or leave much earlier than normal. The Daily Mail (bleeuuggh) reported that airlines were anticipating major chaos and were calling on the government to take action (well they had concerns and wrote a letter to the government and the Daily Mail then made a drama out of it!). The endless television streams of news reports contained almost nothing but dramas about things like a car crash on the M4 leaving people waiting for 10 minutes in a queue whilst the car was moved, and suchlike dramas from petty incidents. Looking at USA Today you can see several reports about the riots, fake bomb smuggled in to the park and various other things that do little more than scaremonger people.
So now the ‘what the hell happened’ – simple – people either could not afford it, or were driven away by all the coverage of riots, lapses in security, transport worries and general non-forward-thinking and sensationalisation of the smallest things that went wrong or were even threatened (how long did we hear about the potential strikes for…? By the end of it I was on the verge of moving down and driving the sodding trains and buses myself!).
It is apparent that hospitality did not do well during this prime opportunity to get british service back on the map – the fact that hotel prices rocketed and then nose-dived nearer the event is a sure sign that things have gone wrong – again this is blamed on organisers etc who not only left thousands of empty seats but also hundreds of empty rooms – I think this is a lesson to be learnt by all – stop being so greedy and stop believing all the hype – carry on as normal and do what you normally do; greed achieves little and buying into media hype only gives you a stomach ulcer!
As the old saying goes: