Strong Hotel Operating Performance Impact for Olympic Host Cities

STR Global has been monitoring hotel performance for the Olympic host cities since Atlanta hosted the Olympic Games in 1996. The trend in occupancy and average daily rate (ADR) during the Olympic Games displayed very different patterns of performance compared with pre-and post-Olympic years.

The forthcoming 2016 summer Olympics in Rio de Janeiro will be the sixth games STR Global has followed. For the most recent Olympic Games in London, STR Global reported daily hotel performance for 423 properties equating to more than 73,000 rooms. The trend in occupancy and average daily rate (ADR) during the Olympic Games displayed very different patterns of performance compared with pre-and post-Olympic years.
Graph - Hotel occupancy for London Hotels during 2012 Olympics
Source: STR Global
The year 2011 was strong for London, having recovered from the financial crisis in 2010, following two years of downturn. Average occupancy in 2011 was 84.4 percent over what is considered the Olympic period. Looking at the Olympic year (2012), occupancy was above 85 percent on most days. Highest occupancy achieved during this period was 94.4 percent on the day Team Great Britain won six gold medals, dubbed as “Super Saturday”. This was the day after the new, 80,000-seat Olympic stadium opened for the start of the games. The average occupancy over that same period in 2013 was 83.0 percent, lower than pre-Olympic and Olympic years. In 2013, London was primarily impacted by Ramadan, which started on 10 July and ended 9 August. London also has had a significant number of new openings; year-to-date August 2013 supply grew by 4.5 percent compared to a historical average of 1.0 percent.
Graph - Hotel average daily rate for London Hotels during 2012 Olympics
In terms of ADR, London has continued to grow from strength to strength. In 2011, London achieved £114.06 during the Olympic period and reported record levels of ADR throughout the rest of the year compared to its previous 2007 peaks. During the games, daily ADR stayed above £200, achieving an average ADR of £211.37. Such high levels have not previously been recorded by London hotels for as long as STR Global has been reporting daily data. However, the ADR growth was lower than past host cities, such as Beijing and Athens, when ADR grew during the Olympic month more than 200 percent for both cities. London ADR growth for the month of August 2012 was only 44 percent in comparison. For the post Olympic year (2013), the trend for ADR appears to have returned closer to 2011 levels and maintained an average of £122.95 for the period.
STR Global believes the Tokyo Olympics 2020 will be a successful event. Daily hotel performance in Tokyo during the Olympic Games will be tracked by STR Global, and we expect interesting results. Each host city is very different in terms of the state of its economy and maturity of the hotel market. STR Global tracks monthly hotel performance for 107 properties with 33,739 rooms in Tokyo. YTD July2013 performance is positive, with both occupancy and ADR increasing by 4.3 percent to 84.6 percent and 7.5 percent to JPY15082, respectively year over year. According to our recent forecast report in Tokyo, supply compound annual growth rate (CAGR) for 2013 to 2015 is up 2.0 percent, while demand CAGR is up 1.8 percent.
STR Global continuously tracks daily hotel performance for Tokyo and a large number of cities across the rest of Japan. For further details of our benchmarking program and forecast report, which is published quarterly and will provide STR Global’s forecast for the coming five years, please contact Megumi Ishida at