London Homeowners Cash In on Olympic Visitors
Assistant Editor, CNBC.com
London is home to some of the world's most opulent hotels, but with five-star rooms in short supply during the Olympic Games this summer, wealthy visitors are increasingly turning to private homes to meet their accommodation needs.
Opting for home stays rather than paying for a hotel has for some time been a popular option among budget travelers looking for cheap stays in expensive locations, but scarcity of accommodation during the London Olympics means many wealthy visitors to the city are turning to a variety of agencies specializing in high-end rentals.
An estimated 500,000 extra visitors will travel to London for the Olympic Games this year, and with the majority of city's top hotels fully booked or charging extortionate rates for their very best rooms, renting a beautiful home in one of London's most desirable districts can prove to be the more economical option.
Onefinestay.com bills itself as an “unhotel,” offering deluxe vacation properties with the luxury touches that guests would expect from a top hotel.
Guests are greeted on arrival, bellhops on scooters are available 24/7, and maid service, wifi and the use of an iPhone full of local listings come as standard.
"We like to think that combines the best bits of a hotel experience with the best bits of staying in someone's home because you get all the convenience and the comfort of the home," Greg Marsh, co-founder and CEO of Onefinestay, told CNBC.com.
The vast majority of properties being offered are situated near the center of the city, and Marsh says those remain the most sought-after areas for visitors during the Olympics, despite most Olympic events taking place in less affluent boroughs in the east of the city.
"The areas we have found to be much more popular have been the traditional areas of London; the conventionally popular areas [such as] Chelsea, Kensington, Notting Hill, Knightsbridge, Belgravia, all the parts of town which you'd live in if you could live anywhere," he explained.
The most expensive properties listed on the Onefinestay website include a seven-bedroom house in the London suburb of Richmond, and two 4-bedroom townhouses in Notting Hill and neighboring Holland Park priced at $3,100 a week.
Marsh said he has been reluctant to hike prices considerably during the Olympic Games and he believes employing such tactics could prove detrimental to his business in the end.
"During the Games, the pricing is a bit higher… but we've been quite keen not to go crazy with the pricing for a couple of different reasons… One is that we think there's a little bit of opportunism among some hotel owners, and I think that might backfire on them, and secondly what we've found in our experience is if you set very high prices for a short period of time, it ends up attracting people who are looking for something that really isn't this experience," Marsh stressed.
WEALTHY AMERICANS RENT IN LONDON
Foxtons, one of London 's leading real estate agents, offers a penthouse apartment in Knightsbridge during the Games for $156,859 per week, and Sarah Tonkinson, Lettings Director at Foxtons, said interest in the most expensive properties had come from companies, athletes and high net worth individuals from the United States and so-called “BRIC” nations of Brazil, Russia, India and China.
"(Guests come from) the US, Russia, China, India, I suppose the places that you would expect them to come from, and it's a mix of some people looking at it from a corporate point of view, so the top guy (from a company) might come over and have a house. But there are also lots of individuals that are coming over as well," Tonkinson told CNBC.com.
"We have had interest from athletes too… a lot of them actually are coming over quite a lot earlier to acclimatize, to get used to training, to get used to the UK time zone," she added.
Marsh of Onefinestay said Americans are among the most numerous clients for his firm, which launched in 2010 with six homes and now offers 325 properties.
"It's particularly popular among Americans and Australasians and people from Asia," Marsh said. "Those are really big markets for us, a little less for Russia and the Middle East but particularly the West is our most popular origin of guest."
Tonkinson found that the majority of calls to Foxtons were for properties situated in Travel Zone 1 of the London Underground, in the center of the city where the most upscale neighborhoods are situated.
"A lot of people want to actually enjoy London, so they're coming for the Olympics but they want to eat in the nice restaurants, they want to soak up the atmosphere they want to be situated where they can commute out to the Olympics,” she added.
She added that foreign guests were more accustomed to traveling greater distances to attend events.
"In England we're quite lazy about distances that we travel, but in other countries, Australia and America, people think nothing of traveling for an hour to get to a concert or to go and do something, and so I think people are much more willing to travel to the right thing," she said.
However, Andy Cockburn, senior regional director at vacation rentals site Homeaway.co.uk, said that some of the most sought-after accommodations on their website are situated close to the main Olympic site in Stratford, East London.
"The (properties) that are going for £15,000 ($23,740) a week are within walking distance of the venues. Six bedrooms plus, stand-alone, very luxury properties," he said.
"From speaking to the owners who are renting these properties out, there's a complete mix (among renters.) There are obviously a lot of tourists. We're also seeing a lot of interest from news crews, some from athletes and their families and so we're seeing the full spectrum of Olympic visitors," he added.
The high demand for accommodation during the Olympic Games this summer is proving lucrative for London homeowners, some of whom have found they can rent out their properties at sky-high prices and escape the city during a very busy period.
"Typically whenever there's a major sporting event we see prices rise by between 50 and 200 percent and it looks like the Olympics are very similar to that,” said Andy Cockburn.
“When Wimbledon comes around, we see the same in the Wimbledon area... What's different is it's just bigger, so we're seeing plenty of demand from people coming to London."
He added that although demand is high, Homeaway.co.uk is inundated with calls from Londoners offering to list their property during the Games, and he believes property will be available right up to the start of the Olympics.
Marsh of Onefinestay.com said the economic downturn has made travelers on all budgets more willing to stay in a home than book into a hotel and while homeowners cash in, luxury travelers also save money.
“It's particularly attractive to Londoners where that little bit of extra money will pay for a holiday or that income will help you pay for that refurb of the bathroom or the new kitchen you've been planning,” he said.
“This is something that is more attractive in a downturn, and from a guest perspective, compared to how much it would cost you to stay in say three, four adjoining hotel rooms with your family, it’s unbelievable, you're getting so much better value by doing this," he added.