April 5 (Bloomberg) -- Natasha Corne is offering Olympic fans who attend this summer’s London Games a piece of her backyard for around $24 a night, including a full English breakfast.
Corne, a 36-year-old health-care worker, has already bought a blue tent to house her guests and she plans to set up a barbecue on the 1,750 square-foot (163 square-meter) plot of land in Eltham, southeast London.
“I’ve jumped on the Olympic bandwagon,” said Corne, whose two-bedroom home is 3 miles (4.8 kilometers) from the equestrian-event sites in Greenwich. “I haven’t got a massive garden, but there’s enough space to sleep eight.”
The Olympic ritual of renting out space to visitors is under way in London after government cuts triggered the biggest drop in disposable incomes in more than two decades. Homeowners are trying to take advantage of a hotel shortage that’s allowed some operators to charge as much as double the usual rate during the Games.
About 320,000 visitors will converge on the U.K. capital in July, many of them competing with invitees of Britain and the International Olympic Committee for more than 140,000 hotel rooms, according to estimates by the U.K. government’s VisitBritain office.
“There are simply not enough rooms available across all price classes,” said Konstanze Auernheimer, London-based director of marketing and analysis at hospitality research company STR Global. “That’s why many Londoners see this as an opportunity to offer accommodation with a local flavor for less money.”
Corne is one of several hundred people advertising alternative accommodation during the Games on Campinmygarden.com. Londoners are offering houses and apartments to rent on websites such as Londonrentmyhouse.com, Gumtree.com and Craigslist’s London site.
A six-bedroom property in Hammersmith, about a mile from the Earls Court sports hall where the Olympic volleyball competition will take place, is listed for 2,500 pounds ($4,000) a week. A 10-bedroom Hackney Wick home, north of the Olympic Park, will cost 7,500 pounds a week.
A typical London hotel room during the Olympic Games will cost 210 pounds a night, according to Hotels.com, a website advertising more than 145,000 hotels around the world. That compares with an average rate of about 103 pounds at the same time last year.
By renting a furnished room, homeowners can make about 4,000 pounds without paying tax, according to Claire Evans, a director at accounting firm PricewaterhouseCoopers LLP. It costs 20 pounds to place an advertisement on Londonrentmyhouse, while Campinmygarden is free.
The swell of visitors is prompting some residential property brokers in London’s East End, where the 246 hectares (608 acres) of wasteland and disused railroads made way for the Olympic Park, to contact tenants before their leases are up and ask whether the space will be free during the Games.
Alan Harvey Property Services mailed renters of the properties it manages four months before the opening ceremony. It’s offering two-bedroom apartments near Newham, London’s poorest neighborhood, for 2,500 pounds a week during the Games.
Those prices are as much as five times higher than typical rates, according to Jane Ingram, head of the rental unit at brokerage Savills Plc. The landlords are risking a void in rental income during and after the Games by seeking temporary tenants, she said.
“We don’t know if they’re ever going to get that, as it’s so inflated,” Ingram said by phone. “There’s a lot that people need to think about that they haven’t necessarily considered because they’ve got excited about the pound signs.”
The returns for those turning their gardens into campsites won’t be huge, according to Susan Goode, who’s renting her garden about 10 miles east of the Olympic Park in Romford, Essex for 8 pounds a person per night. She hopes to earn a few hundred pounds to pay for repairs to her garage roof.
“It’s a bit of fun,” Goode said in a telephone interview. “If people want to stay, I can earn a little bit of money. I’m not going to make mega-bucks.”
The competition from private individuals doesn’t appear to have hurt hotel companies. The Lanesborough, a luxury hotel near Buckingham Palace operated by Starwood Hotels & Resorts Worldwide Inc., is fully booked for the Games, according to the Stamford, Connecticut-based company. That includes a suite for 14,000 pounds a night, the most expensive in London.
Intercontinental Hotels Group Plc, the world’s largest hotelier and the official hotel provider for the Games, has about 86 percent of its rooms in London booked. More than 90 percent of Starwood’s city center hotel rooms have been sold, said Michael Wale, senior vice president for northwest Europe.
“The period immediately after the Olympic Games is business as usual and we have plenty of availability,” Wale said by e-mail.
Travelodge Ltd., London’s biggest hotelier, opened its 500th U.K. property in Stratford, home of the Olympic Stadium, on March 4 and plans to open another six in the city before the event begins.
Room rates are unlikely to rise further as hotels lower or remove the minimum number of nights required for a booking, according to Seamus MacCormaic, director of market management for hotels.com.
‘Testing the Water’
“Demand isn’t as strong as hotels may have expected,” he said by phone. “They’re testing the water but still holding on to rates.”
The Olympics run from July 27 to Aug. 12 and the Paralympics last 12 days starting Aug. 29. About 8.8 million tickets to events will be sold and will attract more visitors than other Summer Games in Europe, according to a study by Oxford Economics. About 250,000 people traveled to Barcelona for the 1992 Games, while Athens had around 150,000 tourists in 2004, the researcher said.
When London beat Paris and New York to win the Games in 2005, its Olympic officials pledged to reserve about 50,000 rooms. The London Organising Committee returned about 20 percent of its allocation, leaving about 110,000 rooms available for the public.
The opening ceremony on July 27 has attracted the greatest demand for hotel rooms, followed by the first track and field events on Aug. 3, according to MacCormaic of hotels.com.
The first of Natasha Corne’s guests, a family of four, are due to arrive on the busiest day, when Oscar-winning director Danny Boyle unveils his William Shakespeare-inspired “Isles of Wonder” Olympic curtain-raiser. Corne already has her mind on the day after.
“I’m not looking forward to cooking eight breakfasts in the morning,” she said. “But I’ll do it with a smile.”
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