BTN Europe presents an overview of business travel and MICE predictions for this year
How best to manage your business travel during the Games this summer? Alex Blyth asks 10 experts in different fields
AS YOU ARE NO DOUBT acutely aware by now, between July 27 and September 9 this year, London is hosting the Olympic and Paralympic Games. More than 9 million tickets will be sold and around 250,000 visitors are expected to descend on London’s 100,000-plus hotel rooms and already-congested transport system. According to some estimates this will add around an hour to journeys around the capital. How will it affect your business, and what can you do to prepare?
1. the travel buyer
Mike Butcher is regional travel manager EMEA at Alcatel-Lucent. He expects next summer’s Games to cause significant disruption in and around the capital. “Already hotels are asking for very high prices during the Olympics,” he says. “Even though it’s low season for business travel, the airports will be busy, and to be frank, I expect ground travel to be extremely difficult.”
He adds: “I know Transport for London (TfL) is trying its best to plan ahead and put minds at ease. I was at the recent Carlson Wagonlit Travel forum where a TfL spokesperson outlined their plans. But I’m not optimistic it will work.” He is, though, confident that his company can avoid the worst of it. “We have two important advantages,” he explains.
“First, while we have a small London office, the majority of our staff are based in Maidenhead, Swindon or Newport. So, we’re already planning to ensure our meetings take place in those locations, and that any international visitors are kept away from London during and around the Games.”
“Second, we’re a telecommunications company. This means we’ve got all the technology we need to allow the staff in our London office to work from home. So, to summarise, we’re planning ahead and we’re glad we don’t need to operate in the heart of London during what will be an extremely busy time for the capital.”
2. the incentives consultant
Nigel Cooper, executive director at corporate incentive firm P&MM Events & Communications, does not believe business travel buyers have begun to turn their attention to the Olympics. “I think they’re more focused on 2012’s overall value processes,” he says.
However, he thinks it is time they started to plan ahead. “This will not be a good time to try and do business in London,” he says. “It will be difficult to secure last-minute flights and accommodation, and this will be especially severe during the two-week peak period of the athletics tournament. The government and the London Organising Committee of the Olympic and Paralympic Games (LOCOG) are already asking businesses to organise for staff to work from home or to change their hours to avoid the peak commuter times.”
He continues: “That said, this is the quietest time of the year for business travellers, with average corporate occupancy rates in hotels falling by over 50 per cent. So the demand is traditionally a lot lower. In terms of flights, securing last-minute fully flexible air seats will be challenging but potentially possible as these are always the last and most expensive seats to sell.”
On a more positive note, he thinks there may be some unexpectedly affordable corporate hospitality opportunities cropping up. “Reports suggest that official hospitality is only 60 per cent sold, when it should be almost sold out by now,” he says. “So, if you have visitors who are interested in the Games, then you might be able to take them along. But overall, my advice would be to stay at home and watch it on TV...”
3. the industry regulator
For Mark Tanzer, chief executive at ABTA, the Games are an opportunity for travel management companies (TMCs) to demonstrate their value. He explains: “Business travellers will clearly have to compete with visitors to the Games for hotel rooms and this may push rates up. However, this represents an ideal opportunity for TMCs to prove their worth to clients by accessing more reasonable deals.”
Tanzer believes travel disruption will be localised. “ TfL has estimated that 65 per cent of London tube stations will be unaffected by the Games,” he says. “The venues are largely confined to east London, and are not in the main business areas of the City and West End, so I doubt there will be much impact on business travellers within the capital.”
He continues: “In terms of the airports, the UK Border Agency has assured us it has robust contingency plans in place which will minimise any disruption caused by the Games, in particular the large number of competitors and their support teams.
Most of the visitors to the Games will be from the UK, and other visitors will avoid or delay trips to London, so we don’t foresee any significant issues with international visitor numbers.”
4. the travel agent
Kashan Ashwell is a business consultant at Travel Counsellors. She has been involved in business travel for 17 years and in recent years has sold annually more than £500,000-worth of business travel.
She believes the Games are a definite concern for her clients. “As much as the Games are going to be a fantastic injection to the UK economy, there is no doubt it is going to be a difficult time for business travellers and the industry as a whole,” she says.
“As it is so hard for corporate travellers to plan months in advance with concrete decisions and dates, we can definitely expect to see problems around a lack of availability of air travel, car rental and accommodation.
“This will give sales consultants a great opportunity to demonstrate more creative thinking – for example, we’ll be flying passengers into alternative airports and using rail travel where possible. However, I expect business travellers will try their best to avoid London completely.”
Already one of her clients has rented a few apartments in the London area for its business travellers, and she believes others should be looking to take similar measures. “Not that many have put in place contingencies,” she says. “I’m worried there will be a panic scramble by business travel buyers in the early part of this year.”
5. the travel management consultant
“Now that the one-year-to-go mark has passed, our clients are beginning to fully grasp the sheer volume of visitors visiting the capital, and the disruption the Games are expected to cause,” reports Ian Windsor, managing director of HRG UK. “Our clients are certainly concerned about business travel during this period.”
He continues: “About 65 per cent of London’s usual 120,000 hotel rooms will be allocated to the organisers. With a large proportion of the remainder available for the hotels themselves to sell, we reckon that as little as 12,000 to 18,000 London hotel rooms will be sold into the general marketplace, significantly reducing the number available for business travellers to use.
“Furthermore, it is likely that capacity on inbound flights will be reduced, which could have a knock-on effect on those travellers trying to enter the UK for business during July and August. Also, the Olympic Delivery Authority and Network Rail have put together a timetable which includes 2,000 extra train services, including increased services to major cities, later into the evening.”
HRG is already working with its clients to help mitigate the worst of these problems. Windsor explains: “We’re using the traffic and congestion hotspots that TfL has just released. We're recommending clients rent medium- to long-stay apartments within London instead of hotel stays, and consider towns outside of London with good rail links into the capital.”
He concludes: “Ultimately, staying in London will be more expensive during this period so we’re advising our clients to think carefully about whether they need to be in the city during this time.”
6. the travel management consultant
Johan Persson, vice-president account management at Portman Travel, refuses to be caught up in what he believes is a lot of hype and noise over the effects on the business traveller in London during the Olympics period. “We’re just going to wait and see,” he says. “Until LOCOG’s hotel rooms allocation comes back into the market, which could be as late as March, we really don’t know the true position on hotel availability.”
He goes on to say that, at the moment, rates are around 30 per cent higher than normal with prohibitive conditions attached, such as minimum five-night stays and a no refund or cancellation policy. So he thinks it makes sense to wait and see if this is relaxed nearer the time.
“There have been a lot of predictions about London being over-occupied during the Olympics,” he says, “but we’re not sure that will be true – several international cities hosting major sporting events in recent years have actually found themselves with unexpected availability. A recent report from the European Tour Operators Association found that London is set to suffer a 95 per cent leisure bookings slump during the Games. So we think rates may well go down nearer the time.”
But he adds: “We wouldn’t advise any client to contemplate holding a large meeting or conference in London during the Olympics, and if your business does not depend upon travel you might even want to consider issuing a travel ban during the Olympics period.”
7. the serviced apartment broker
Those who are looking to serviced apartments as a viable alternative to hotels might be interested to learn that, according to Serena Dines, principal account manager at serviced apartment broker Silverdoor, many of these are also already booked.
“Availability is very thin on the ground,” she says. “Some operators we work with have been appointed official suppliers by LOCOG and have block-booked all apartments. We have been told, however, there are two release dates of excess apartments back on to the market in January and April.”
She continues: “We’re trying to anticipate disruption and are encouraging clients to plan accommodation for their trip as early as possible. We are sure transient business travel will suffer but, fortunately, most of our bookings are for longer stays so should be less affected.”
Several of her clients have gone as far as to issue a ban on non-essential international travel over the Olympic period and she expects this to dampen demand for her services within the UK. But Dines is optimistic that she will make up for this by providing accommodation around meetings that are diverted to other regional or international offices outside of the Olympic area.
8. the hotel agent
“Our clients are talking about the Games a lot,” says Mark Douglas, director of sales at hotel portal HRS UK. “Generally they are very concerned about the impact and they will most likely reduce travel to London at that time. Some, especially those running hospitality or large meetings, are angry that LOCOG is holding all the suitable rooms.”
He says many companies are planning meetings in alternative locations outside of London or are reducing travel in general. The overriding view is only business-critical travel into London should be undertaken. “There’s a real worry about the overall impact of all this on business – many corporate travellers will stay away,” he says. “However, we know of companies that hold large meetings in August which have already started to make arrangements to transport people in and out of London rather than trying to find rooms for them to stay overnight. Other companies are looking into serviced accommodation more than they would normally.”
He concludes with this advice: “Book flexible rates now. Talk to preferred hotels about block bookings and allocations. Consider moving meetings outside of London to other UK cities.”
9. the event management consultant
Neil Pace, head of UK event operations at ATPI, is more optimistic than most about the impact of the Olympics on business travel. “To be honest, I don’t see any particularly harmful effects of the Olympics coming to town. Wherever in the world the Games are held, it always creates some logistics and transport issues and London is no exception.”
He continues: “On the bright side, visitors travelling from central London to any of the stadiums or venues are going to be treated to some of the most iconic buildings and sights in the world, such as Wimbledon, Eton Dorney, Greenwich and Hyde Park. While overland travel will be slower and busier than normal throughout the city, I would encourage people to sit back and enjoy the ride.”
The corporate hospitality world has been struggling in the tough economic climate of the past three years – Pace believes the Olympic Games will provide it with a much needed boost. He says: “The summer Olympics happen only once every four years and are extremely high profile. I predict that as we move into this year, hospitality fervour will be unlike anything the UK has ever seen.”
He believes this will affect availability, and he recommends business travellers look further afield for accommodation.
“Corporates must face the reality, adapt and be prepared to look outside central London,” he insists. “Another option for clients is to plump for the Olympics’ ‘shoulder season’. This period, either side of the Games, should not be forgotten and business can plan for the slump in activity both before and after the event.”
10. the organiser
Mark Evers, director of Games transport at TfL, admits travel on road and rail will be affected during the Games. “70 per cent of roads and 65 per cent of tube and DLR stations will not be affected, but in certain areas and on certain days there will be significant impact,” he says. “So companies need to prepare.”
He and his team have been trying to get this message across to corporate travellers. For example, businesses with more than 200 employees have had access to an adviser who will go in and help plan the business’s travel around the Games. Evers reports that there has been an encouraging take-up of this service, and he believes most businesses are aware of the issues. Towards the end of last year TfL moved to its next phase: communicating specific risks and expected problem areas.
Evers explained: “We’ve launched ‘heatmaps’ on www.tfl.gov.uk/2012 which detail where and when we expect heavy traffic. So you can see that in south-west London on the first Saturday of the Games, the men’s road race takes place, and you can avoid planning meetings in that area. There is also a journey planner which, if you input the start and finish points, will tell you the anticipated delay.”
He concludes: “There will be congestion but it will be localised and largely predictable so, with a bit of planning, problems can be avoided. We’re providing all the information business travellers need, and we hope they’ll be using it, and will see the Games not just as an obstacle to overcome, but also as an event to enjoy.”