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30 Jul, 2013

London’s Recovery: Post-Olympic Legacy or Promotion?

Issued by Tarsh Consulting

London, 30 July 2013 (JacTravel Media Release) – One year on from the Olympic Games, much ballyhoo has been made about the legacy of the Olympics and a resurgence of tourists to London this summer is cited as a positive impact of staging the Games.

However, research by online travel wholesaler JacTravel suggests that the recovery may have at least as much to do with promotional deals as with any post-Olympic legacy.

JacTravel has analysed wholesale prices for London hotels in the 4* and 5* categories during the ‘Games period’, 27th July to 12th August, and has concluded that the average prices are not just substantially down on the inflated rates seen during the 2012 Olympics but are, in real terms, less than they were in 2011.

In the 5* category, the average room rate this year is £124.80 per person per night, less than half the rate during the Games, which was £ £250.65 pp/pn. However in 2011 the average rate was 6% higher at £132.50 pp/pn.

In the 4* category, the average for the same period, 27th July – 12th August, is £62.13 per person per night, less than 60% of the 2012 rate, which was £ £107.84 pp/pn. In 2011 the average rate was £57.77 pp/pn, which was lower than this year’s but when one takes inflation in to account (4.8% in 2011 and 3.1% in 2012) this year’s average price represents a slight reduction in real terms.

Year Avg 5* Rates (£) Avg 4* Rates (£) Terms & Conditions
2011 132.50 57.77 24 hours cancellation; no min nights
2012 250.65 107.84 Cancellation 60 days; Min 3 nights
2013 124.80 62.13 24 hours cancellation; no min nights

Kasia Marciniak, JacTravel’s chief buyer for London says: “Headline rates are not down; they’re up but the promotional deals in the wholesale market are so substantial that they are having an impact on the average prices we are seeing. Many hotels are offering 10-20% discounts over a whole stay, particularly where it includes traditionally quieter days, or they are bundling in additional bonus nights. What I’m hearing is that many hotels lost out on regular business due to the Olympics and they feel they need to do something special to attract major clients back. Nobody is saying there has been a boost in demand from staging the Games.”

Nevertheless, London bookings during the ‘Olympic period’ this summer are massively up on 2012 and very substantially up on 2011. In JacTravel’s case, bookings by number are around double what they were in 2011 and more than six times 2012.

JacTravel’s President and Chief Commercial Officer, Mario Bodini, said: “The rebound is beyond expectation. In my view, the key factor is that many hoteliers are showing great commercial nous. Travel is an incredibly price sensitive business and cleverly constructed promotions that offer great value to the consumer stand out and win business. Of course, offering deals through wholesalers like us enables hotels to preserve the appearance of high rates but make no mistake; the imaginative promotions are making a big impact.”