JacTravel Forecasts a 30 percent Olympic Hotel Slump
Tuesday 5, June 2012
JacTravel, the UK-based wholesaler, best known for its extensive range of hotels online and inbound travel services, is forecasting a dramatic slump in hotel bookings during the Olympic Games in London, with occupancy down by around 30 percent on the previous year.
The forecasts are based on a comparison of its hotel bookings at this time last year for London and other leading European cities. Currently, July is more than 35% down on 2011 and August is almost 30% down. By comparison, major European cities are very substantially up, some by more than 100%.
JacTravel’s customer base comprises travel agents, tour operators and hotel booking web sites all over the world, with no exceptional emphasis on any one origin market so its booking pattern is likely to be a barometer for what is taking place generally. The numbers are based on a sample size of over 30,000 passengers.
Advertised hotel rates for London during the Games are very considerably higher than usual for the time of year. For example, Kasia Marciniak, JacTravel’s head of contracting for London says: “In a normal summer, I would expect a four star hotel room in central London to be priced between £80 - £120 per night but this year the range is £200 - £415. By comparison a similar room in the centre of Paris would be €85 - €150, Dublin would be €70 - €100 and Barcelona would be €60 - €110.”
High hotel prices and punitive booking conditions in London during the Olympics have certainly driven away the traditional long haul leisure tour operators. This was evidenced by a survey conducted by the European Tour Operators Association (ETOA), which showed a decline of up to 90% in their group bookings during the Olympic period.
Whilst the low numbers for London could be explained by a general trend of people waiting to see if London rates will fall before committing to booking and by JacTravel gaining market share in Continental Europe; it is more likely that this is evidence of a “Displacement Effect” due to the Olympics, with regular tourists deciding to avoid London in July and August owing to the presence of the Games.
JacTravel CEO, Mario Bodini, commented: “There is a tragic irony in the numbers we are seeing. London will be a fantastic place to visit in July and August, with lots of cultural activities taking place around the Olympics, in addition to all the city’s well-known, marvellous attractions. It is a time when the place should be heaving but instead it is likely to be comparatively empty.”
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