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Ensuring Australian hotels score a try during the 2003 Rugby World Cup

In general, major sporting events held recently across the world have had a positive impact on the hotel markets of the host cities…

In general, major sporting events held recently across the world have had a positive impact on the hotel markets of the host cities. This bodes well for the performance of Australia<.>‘s hotel markets during the Rugby World Cup (RWC) to be held in 2003.

However, not all the markets’ performances have lived up to expectations and Australia needs to learn from their experiences to ensure we realise the event’s full potential, said Mr David Gibson, CEO & Managing Director, Jones Lang LaSalle<.> Hotels.

In Manchester, home of the Commonwealth Games in July, reported occupancy was 6.9% above the levels of July 2001. However, it was the average daily rate (ADR) that experienced the largest boost, increasing by 10.0% over the same month of the previous year. This performance was inferior to expectations and there are suggestions that traditional business was displaced by fear of overcrowding or elevated room rates. However, we should bear in mind that these figures do not include the total period of the Games, which continued into August.

There was also a mixed response to the impact of the FIFA World Cup held in June in Japan and South Korea.

It appears that the hotels where teams and officials stayed experienced a performance boost but that this did not spread to all host cities, said Mr Tomohiko Sawayanagi, Senior Vice President of Jones Lang LaSalle Hotels in Tokyo.

Although Tokyo did not host any games, it benefited from being the home of FIFA and its position as the gateway to Japan, with ADR increasing by 23.2%. Seoul, too experienced a 44.7% boost to ADR, but occupancy was disappointing, as was the performance of hotels in Osaka and Yokohama.

In addition to the fact that a large proportion of unsold hotel rooms were returned at the last minute and were consequently difficult to re-sell, four and five star hotels in these cities were affected by displaced demand and the perception of overcrowding during the tournament. However, the economy sector reportedly enjoyed very high occupancies, said Mr Sawayanagi.

These results are consistent with previous research from Jones Lang LaSalle Hotels which revealed that the likely impact of the RWC 2003 for Australian hotel markets would be a sharp escalation of room rates. However, we need to avoid the pitfalls of previous events by ensuring unsold tickets and hotel rooms are put back on the market with plenty of time for resale, and promoting ‘business as normal’ to encourage business visitors to continue to travel during the period, said Mr Gibson.

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