Normally, when a city is lucky enough to host the Olympic Games, they see a huge boom in hotel bookings. However, because hotels in the UK have started to jack up their rates, this is not the case for London. In fact, due to the weak economy, people have paid more attention to how they will travel. People are no longer willing to pay crazy amounts of money to stay in a hotel, regardless of the event. This is why bookings in London are down by a third on last summer despite the Olympic games taking place this summer.
These same reports go on to show that consumers are being put off by the extremely high prices. This is putting a huge damper on hopes that the Games this summer will revive Britain’s sinking economy. British travel agents have been saying, if hotels do not lower their prices and stop trying their hardest to cash in on the Olympic Games, this could be one of the worst turnouts in history.
Moody’s, which is a credit rating company, said just last month that the Olympic games would provide only a temporary boost to corporate earnings. Hotels should be the ones that benefit the most.
This is not the first time in history that such a bad turnout rate has been expected. In fact, the travel industry calls this the “displacement effect.” People who typically travel to the UK regardless of the event are turned off by the Olympic Games. High prices and overcrowding cause them not to come. Thus, Olympic tourists are just displacing the typical tourists.