Alex Sogno, CEO, Global Asset Solutions, looks at how to extend the life of your hotel beyond one sporting moment
One of the eternal truths of hotel development is: Show me a city hosting a World Cup or an Olympics, and I’ll show you a more-than-healthy development pipeline.
Take Qatar this year. In the second quarter, Lodging Econometrics reported that it had an all-time high project count of 66 projects or 15,168 rooms. Of those, more than half were in the luxury sector, and more than half will be in the capital, Doha. Despite this growth, it is expected that the high demand from more than a million visitors will mean many football fans staying in nearby Dubai.
In total, Qatar is planning to add 105 hotels to its offering in time for the FIFA World Cup, with plans to offer something for every guest. The tournament will take place over 29 days.
For Qatar as a whole, the country is expecting to generate $20bn and is using the event as part of its 2030 vision, which echoes that deployed by Dubai as it sought to diversify away from oil as its prime revenue generator. The 2030 strategy aims to position Qatar as a ‘world-class hub with deep cultural roots’, targeting seven million annual visitors by 2030.
Qatar is estimated to have spent $220bn on the World Cup, mostly on infrastructure, which, with $20bn coming in, would not be seen as the wisest spend if it wasn’t for the planned long-term gain.
What to expect from the Paris Olympic Games
At the other end of the tourism spectrum is Paris, one of the most popular destinations in the world. The French capital reported 9.9 million visitors this summer, 3.5 percent off 2019’s numbers. The country as a whole saw an influx from overseas, but also record numbers of domestic stays. Paris is due to host the 2024 Olympic and Paralympic Summer Games, estimating 9.7 million visitors.
Where will they all stay? Airbnb is one of the headline sponsors of the event, but Paris is known for being one of the most restrictive jurisdictions for the sharing platform. The International Olympics Committee has also signed an agreement with Accor, which is headquartered in Paris, which will see it offer its services in the Olympic and Media Villages as well as providing a large number of the 47,000 hotel rooms that Paris 2024 has promised the IoC.
Once the event has closed, the site will become the city’s latest urban redevelopment project, becoming a new residential district with extensive leisure, commercial – including hotels – community and educational facilities, all located close to a new metro station and other transport links.
The city is focused on the impact of the Olympics far beyond the duration of the sporting feats, ensuring a truly sustainable impact.
For Paris as a destination, hotel development is ongoing, and the Olympics can be seen as a bonus, not the core of a wider tourism strategy. STR reported that the city was adding just 12 new hotels, or 1,647 rooms, from 2022 through 2024.
Post-World Cup world for hotels
Historically, planning your hotel’s performance around a global sporting tournament has not been a universal route to success.
In Sydney, which hosted the 2000 Olympic Games, a study by Arthur Andersen’s Hospitality & Leisure Group found that hotels recorded a doubling in average room rates for September 2000 and occupancy of 100 percent. Five-star Sydney properties recorded average room rates during the Olympic period in excess of AUS$480 per room and occupancy rates of 100 percent. So far, so good, but according to STR, it wasn’t until 15 years later that occupancy rose to 86.1 percent, its second-highest September on record.
Development slowed: just 3,000 hotel rooms were added in both Sydney and Melbourne each between 2000 and 2016, according to Tourism Accommodation Australia. Since then, the hotel sector has been booming, in large part due to the government negotiating more than 100 bilateral air services agreements, bringing travellers into the country.
A massive marketing push
If you’re reading this in your freshly-polished marble reception area in Qatar, don’t be disheartened. Instead of thinking of the World Cup as the source of all your guests for the next 29 years, think of it as the best marketing you didn’t have to pay for.
Many hotels still have an ‘if you build it, they will come’ attitude, which can lead to falling back on expensive OTAs to fill beds. A good asset manager, who knows your property and your market, will be able to drive a successful long-term marketing strategy that raises your profile above the crowd during the event and then keeps past and future guests engaged and loyal.
Even with rates likely to be buoyant, the focus needs to be on putting money where you will see the highest returns on investment. We invest a lot in PR and communications, and on online social media (we created a specific management position to build content in some hotels, with a dedicated person who builds quality content), and we frequently see a direct impact on revenue – you can interact quickly with influencers and famous guests staying in the hotel.
The FIFA World Cup will be rich in these opportunities, opportunities which can establish a lifelong profile for your hotel. Welcome to 29 days to build your business.
Published at: https://www.hoteliermiddleeast.com/comment/past-fifa-world-cups-teach-hotel
