When major events like the Olympics, Wimbledon or the World Cup come to town airlines, hotels and local authorities need to be on their toes. Pamela Whitby hears some lessons from Expedia that hotels can take from the Olympics

The London 2012 Olympics was undoubtedly one of the success stories of last year. However, with the benefit of hindsight, what went well and what could the hotel industry have done differently?

1. Work closely with local authorities. To avoid compression hotels should liaise closely with hotel bodies and local or destination authorities, which plan and license everything from sporting fixtures to music events and work with the venues where these are to be held. This will help ensure these are not all scheduled at the same time. To do this requires planning, information sharing and good communication, which most will agree the London Organising Committee did well.

This is something that could be applied in other parts of the country, and the world. Very often where there are convention centres in cities, which are trying to attract a decent-sized conference or event, there is a need to get commitment from hotels to make a certain number of rooms available. As far back as 2005, for example, the LOC reserved rooms for dignatories, the media, sponsors and staff who were working on the games. The agreement was that those rooms, if not reserved, could be released in early 2012. In January the LOC released 20% of its reservations, which meant 120,000 rooms became available.

Sometimes hotels cooperate, says Seamus MacCormaic, Senior Director Market Management, at Expedia, and sometimes they don’t, but much depends on whether cities or destinations have good, organised representative bodies. “If they don’t, then opportunities can be missed,” he says.

Another mistake cities and destinations sometimes make is forcing up pricing based on a previous year’s success; this could lead to them losing out as conference organisers will always roam to get the best pricing.

2. Don’t forget the leisure consumer

In terms of yielding, many London hotels closed out the leisure industry very early on in the run up to the Olympics. Hotels were understandably trying to secure better pricing from groups. However these bookings weren’t guaranteed and in some cases didn’t materalise. “The result is that after the fact they had to go back to the leisure consumer when they may have got a higher price to begin with,” says MacCormaic.  Why? Because earlier on the leisure consumer would have been constrained by advanced payable and non-refundable, or other similar conditions, that these tentative and group bookings would not have been held to. “This was a mistake that many hotels made in London,” he says.

3. Align demand with supply

This could have been achieved with proper yielding. “It comes down to basic yield management,” says MacCormaic, adding that “you try to estimate likely demand, and if you think you will sell out you test market early on to see if people will bite.”

He says packages are a great way for hotel to test the market at certain busy times.  This can be combined with an air ticket through an OTA, or directly in collaboration with an airline. Such packagers are generally opaque so it means the actual pricing of the component parts is not clear, a good way of a building base early on without disclosing the price.

For example, in London, May through to June is a very busy time. There is the Chelsea Flower Show in May, it is a busy corporate period before the school’s break up and there is Wimbledon in June. By testing the market earlier on with a package, and getting a base installed, hotels can then yield upwards closer to the big dates.

According to Expedia, a year before the Olympics, many hotels were coming up as unavailable for sale, and when they did go on sale they had a one-week or two week stay restriction. “This wasn’t aligned with demand and could have been more smartly done if they had considered how tickets were being distributed.”

At the Olympics people were getting tickets for one or two sessions and coming in for one or two days – not one or two weeks. So those restrictions were prohibitive. Another issue was that while most international bookings came in months in advance, this did changed in the last two weeks when airlift became available, as did seats on Eurostar.

4. Distinguish between domestic and international needs

Where London hoteliers really weren’t up to speed was on the domestic front, which brought very different demands. Many people from home just wanted a one or two-night stay or were searching in outer or greater London. “Crucially there were a much higher proportion of families looking for accommodation which very often hotels didn’t cater for.”

So it really crucial for hotels to get to grips with the ins and outs of the event…and also the demand the profile of the customer.

5. Be flexible with payments

That brings us on to payments and being flexible in terms of advance payable and non-refundable restrictions. More broadly, understanding the cultural differences of how people book travel and pay for it is commercially important.

In Brazil, for example, for a main holiday people tend to pay in ten to 12-month installments, so OTAs, agents and even hotels should be able to facilitate this. Another factor to consider is the payment type. In huge swathes of continental Europe people do not use credit cards but debit cards. In fact 80% of Dutch transactions are taken through a local card. Chinese tourists too do not use credit cards, which often puts them off purchasing online, says ChinaContact’s managing director, Roy Graffwho will be speaking at EyeforTravel’s upcoming Travel Distribution Summit in Singapore. Offering different payment types can be quite challenging from a technical perspective, but once again highlights the importance of understanding your audience.

6. Don’t forget mobile in the last minute

Many hotels are looking at ways to secure direct bookings but MacCormaic says that cutting out OTAs in the last 24 hours could be a mistake. He says around 30% of the bookings Expedia takes at airports are made via mobile, and that is only going to get bigger. At train stations, bus stations and other transport hubs where people may have missed a connection, searches are increasingly being made via mobile and hotels can miss an opportunities in this last-minute time frame, he says.

The direct versus OTA debate is a hot topic and will no doubt be fiercely debated at the EyeforTravel Travel Distribution Summit, Europe (May 23-24) where Seamus MacCormaic, Senior Director Market Management, at Expedia will be speaking, alongside other industry heavyweights