As the Paris 2024 Olympic Games approach, hotels are preparing to welcome a massive influx of visitors. This period offers many opportunities, but also unique challenges in terms of hotel management.
In this article, we’ll explore the key strategies hotels are adopting to maximize revenue while delivering an exceptional guest experience.
Analysis of average Hcorpo prices in 2024 versus 2023
The infographic below presents a visual comparison of average hotel prices in France between 2023 and 2024 during the dates of the Olympic Games. Data includes all hotel categories and breakfast.
Average price of 3* and 4* accommodation during the Olympic Games
As part of our analysis of hotel revenue and pricing strategies for the 2024 Olympic Games, we took a close look at the average price of 3* and 4* accommodation. The infographic below offers a clear and concise overview of pricing trends in these hotel categories.
Increased demand for accommodation
Demand for accommodation in Olympic host cities is rising significantly, fueled by the massive influx of visitors, athletes, officials, media and fans. This influx is putting pressure on these cities’ accommodation capacities, putting pressure on hotel establishments. Faced with this increased demand, hotels are encouraged to adjust their rates to make the most of this exceptional period. Peak periods, such as major competition days or opening and closing ceremonies, often see prices rise exponentially, reflecting market supply and demand.
Customized pricing
In the context of the 2024 Olympic Games, hotels need to implement flexible and effective pricing strategies to meet growing demand while maximizing their revenues. Two key strategies are emerging in this area: dynamic pricing and special pricing periods.
By combining these two approaches, hotels can create a robust pricing strategy that enables them to effectively meet growing demand during this period while maximizing their revenues. However, it is essential for establishments to strike the right balance between maximizing profits and customer satisfaction.
Dynamic pricing
Many hotels are implementing dynamic pricing strategies, keeping control of their prices in real time according to demand and other factors such as room availability and special events linked to the Olympic Games.
Special pricing periods
Most hotels with historic corporate contracts have chosen to introduce Black Out dates into their contracts, i.e. periods when they are closed for business, or alternatively special pricing periods during this period.
Minimum length of stay, cancellation and deposit policies
Some hotels will impose specific minimum length of stay, cancellation and deposit rules to better manage their schedule, encouraging longer-than-usual stays and minimizing losses from last-minute cancellations. This approach is particularly advantageous for hotels, as it reduces the number of guest changes and potential losses associated with transition periods between stays.
Increased competition
With competition more intense at these key dates, all hotels are adopting a strategic approach to managing their pricing policies. The challenge is twofold: to remain competitive in a saturated market, while at the same time reaping the maximum benefits from this exceptionally busy period. In this context, every hotel is striving to find the right balance between attracting customers with attractive rates and maximizing its own revenues.
Hotel capacity management
To cope with this increase in demand, hoteliers need to carefully organize their capacity management. This includes maximizing room occupancy while avoiding overbooking, which can lead to logistical complications and customer dissatisfaction. At the same time, maintaining high levels of service is essential to ensure a positive travel experience.
And what about you?
For our corporate customers who regularly travel to these destinations, we’ve shared several recommendations over the past few months.
- Estimating impact: not only do you need to know what your travelers’ needs are over this short period, but you also need to know what the side effects are upstream and downstream of the games, so that you can take action to control costs from June to September,
- Preparing the ground for negotiation: this stage has now been completed. Buyers with negotiated agreements have experienced a tougher-than-usual RFP 2024 season in terms of rates and conditions, with across-the-board rate increases, fewer LRAs (Last Room Availability rates which commit the hotel to the negotiated room typology), a multiplication of dynamic rates that are more complex to budget for, more BODs (Black Out Dates, periods when sales are closed), longer minimum lengths of stay and so on. Those who’ve been there know that we’ve had to rely on our historic hotels more than ever, and accept different seasonality or simply pass on the BODs for the precise period of the games,
- Accompany travelers with clear and anticipated communications: to avoid destinations on event dates, plan important meetings earlier in the year, postpone certain events later in the season, etc. The watchword was anticipation and good intelligence to reduce the impact of cost increases,
- Flexibility: for those who couldn’t do without it, as some Paris head offices are just a stone’s throw away from key venues for these games, we had to be flexible. For some customers, the recommendation was to move meetings to other sites in the Paris region,
- Best buy: make use of all the content available from your content provider, and compete between hotels in the same market, or even between different types of rate for the same hotel,
- Cover your bases for the future: prepare for the RFP 2025 hotel season with reasonable points of comparison to return to an acceptable level of inflation. To do this, don’t hesitate to consider challengers for a more competitive RFP, the key being to be as selective as possible. The aim is to avoid making the 2024 average price the new standard for negotiations…
We’ll let you know more in a few weeks 😉
Fatiah BELHOUT, Account Management Director Hcorpo