Talk that the Olympics in London won't have the previously expected economic benefit
Overbooking of hotel rooms by the Olympics organizing committee for use by dignitaries reduced supply and led to price escalation. Release of now unneeded rooms may come too late to reduce prices and get more business.
See "Foreign visitors turn their backs on the Olympics: Overpriced hotels and threats of disruption deter tourists from what was supposed to be a money-spinning showpiece" and "Tourism gold? Olympics set to lose Britain billions: Organisers accused of scaring off visitors by creating damaging spike in hotel rates" from the Independent.
From the second article:
The organising committee for the London 2012 Games, Locog, revealed yesterday that it had over-estimated by a quarter the number of rooms needed by officials, media and sponsors. It has now handed back 120,000 of the total 600,000 nights booked for the sporting event.
The large-scale reservation of rooms in early preparation for the Games has caused increased prices across the capital and has put many regular tourists off visiting this summer.
Tour operators warned last night that a sudden flood of vacant rooms would be too late to boost visitor numbers. Analysis for The Independent suggests up to one million beds will now go unsold over the Olympic period, hitting hoteliers and others working in the tourism industry. One trade association estimated income could slump by up to £3.5bn during July and August.
Premium Tours, a leading sightseeing operator based in London, expects business to decline by one-third this year. Neil Wootton, the managing director, said: "Prices have been so high that tourists are moving elsewhere. Overseas wholesalers who traditionally push London have switched to other cities this year. If the Parisian and Italian hoteliers do their job then the tours may never return to London."