This summer, it's all eyes on Russia as it hosts the 2018 FIFA World Cup. Awarded hosting rights in December 2010, the country has had eight years to prepare for the biggest event in football. But what does this mean for its hotel industry?
Hosting a major event such as the World Cup or the Olympic Games is a big deal for a country and can result in an improved infrastructure, more investment and increased tourism. Being under the world's spotlight not only raises a city's profile - Sochi was relatively unheard of outside of Russia until the 2014 Winter Olympics – but the increase in tourism, if managed correctly, can result in long-lasting economic benefits.
But large sporting events can also cause disruption in a hotel’s normal occupancy pattern, according to Richard Plant, Head of Digital at Up Hotel Agency, a hotel internet marketing company.
He says: "They can have short periods of full occupancy which can blackout regular bookers. But there's an opportunity to build loyalty to the hotel with the guests who are staying during the event. The key will be to give them a reason to return as leisure guests."
In the run up to the London Olympics in 2012, the UK capital's hotels had an average 88.5% occupancy. After a poor performance in previous years, the Olympics was named the 'saviour of 2012' in the industry thanks to a reported 90% increase in profits during August.
So how can a hotel maximise its potential during its time in favour? “Moscow's hotels have been extremely excited to start the preparations since 2010, when it was announced that Russia had been chosen to host such a prestigious sports event,” says Lada Samodumskaya, Executive Assistant Manager of Hotel Baltschug Kempinski Moscow.
“We're steps from Red Square and the Kremlin and have been one of the most popular hotels in Moscow for 25 years, so we have considerable expertise in operating at the top of our capacity. Nevertheless, we did have to make a few adjustments, largely staffing, prior to this summer's sporting event,” she explains.
It's anticipated that the tournament, which is now in full swing, will attract around 1.5 million foreign football fans to Russia, with the 11 host cities, including Moscow, St Petersburg, Samara and Kaliningrad, benefiting the most from the month-long influx of visitors.
While it's tempting to 'make hay while the sun shines' and hike up room rates during a major sporting event, it can have an adverse effect if visitors feel they are being taken advantage of. While it's not unusual for hotels to charge a premium for prime dates, they do need to be careful it doesn't tip over into profiteering, as news reports claimed earlier this year.
When anticipating a major influx of visitors, city hotels need to work together. It's industry standard to overbook rooms in anticipation of cancellations but during major events this can lead to double-booked rooms and infuriated guests. Instead, hotels could implement minimum-night stays or review the cancellation period to minimise loss.
Aside from pricing, staffing is another consideration. “Hoteliers should focus on their staffing and procurement well in advance,” suggests Samodumskaya. Having plenty of well-trained staff is essential during peak periods, the last thing managers want is operations failing due to poorly trained or too few staff.
In cities like Moscow and St Petersburg where there's ample accommodation to cater to an increase in demand, hoteliers can tap into other ways to maximise earning potential. “We planned in advance some customised offers and promotions for football fans. For example, we welcome non-resident fans at our summer terrace and café where we have special deals on beer and food,” explains Samodumskaya. “We also have a football-themed photo area with a view of St Basil's Cathedral, and an Instagram hashtag #footballtschug.”
With the final fast approaching, the tournament is already being deemed a success by World Cup officials.
“Moscow has made many positive changes and has elevated its image as a safe, international destination with a well-developed infrastructure,” she says. “We now have proper signage in English in the city centre and subway, new areas for walking and cycling, structured parking, as well as a new parks, museums and galleries. Our hoteliers are looking forward to welcoming more and more tourists after the event increases international awareness of the city.”
And lastly, hotels should also consider harnessing the power of social media. During big matches or events, jumping on Twitter and Instagram and embracing the official hashtag are simple ways to get involved. It’s an easy way to score more brand awareness with a worldwide audience. Now that’s a result!
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Hero image: credit to Grigoriy Pisockiy
- Increase staffing levels. Good, well-trained staff are the key to surviving busy times
- It's important that guests don't feel 'ripped off' when facing premium prices during high demand
- Plan tailored offers around food & beverage offerings to encourage 'stickiness'
- Use social media to boost brand awareness during this moment in the spotlight. Embrace the hashtag!
- Keeping a good reputation during busy periods will have a long-lasting effect on future bookings