The SLTN View ‘Hoteliers must avoid price Games’ (August 23, 2012) is somewhat wide of the mark with its suggestion that there is a lesson to be learned by hoteliers in Glasgow when it plays host to the Commonwealth Games in 2014.
In fact, if London hotels had listened to the experience of Atlanta and Sydney when hosting the Olympics, they would have anticipated that room rates would plummet during the Games, rather than assume that it would have been different just because it was London.
Glasgow hoteliers were very much involved in assisting Glasgow City Marketing Bureau with the bid to secure the 2014 Commonwealth Games, which isn’t just a fantastic coup for Glasgow, but for the whole of Scotland.
As part of the bid process, hotels operating at the time had to agree inclusive bedroom rates to help the city win the Games in 2014.
Naturally, experienced event organisers have to make sure costs are very attractive to ensure a great attendance and hotel rates were signed up and included in the winning bid, way ahead of the actual event, so that “naked profiteering” by established hotels isn’t even an option.
Hotel room rates vary daily, according to levels of supply and demand. So, far from “naked profiteering”, the limits on hoteliers’ ability to vary their rates according to demand is a punitive measure that unfairly targets the sector alone while leaving other aspects of the hospitality sector – retailers, restaurateurs, publicans, train and bus operators, taxi drivers and so on – to reap the full rewards when the Games come.
The latest occupancy and rate stats, which give a weekly yield from every hotel bedroom, revealed that, year on year, Glasgow did not fare well during the Olympics.
It is to be hoped, for the health of our local economy, that our hoteliers fare better during the Commonwealth Games.
Having dipped once more into recession, Scotland’s ability to attract tourists is arguably more important than ever, particularly since our tourism sector is our largest employer by a considerable margin.
That’s why, rather than curtailing Glasgow hoteliers’ ability to vary their room rates outwith certain parameters throughout the Commonwealth Games, the official bodies would be better advised to lobby government to slash VAT on visitor accommodation from the present uncompetitive 20% to 5%, which is the rate set for hotels in most other European countries. Such a move could help attract tourists and give the local economy the boost it so desperately needs, especially as we see more and more hotels being developed in an already over-supplied city.
Edinburgh hotels, even during the recession, are achieving almost a £20 premium per room on Glasgow’s. This variance is even more marked when you consider the 10% decline Edinburgh hoteliers suffered in July.
Not only would a reduced rate of VAT for tourism be an effective way to create jobs, it would enable hoteliers to pass on the benefit directly to their customers through a reduction in room rates.
Image: Nicola Taylor, director, Chardon Management.