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19
January
2012

Surviving the London 2012 Olympics!


We have known for some time that the benefits of winning the London 2012 Olympics would also be coupled with some very practical challenges. Projecting the possible impact on our organisation can be elusive, but below we address some of the issues which we can see lomming up ahead.

Temporary Accommodation
As with long term rental accommodation, the level of demand from visitors, during what is already a busy summer period, will cause availability problems and potentially an increase in costs. Discussions with our short term accommodation suppliers have already shown that serviced apartments will be in short supply and, in some instances, at premium prices for this period with strong demand from both corporate customers and private visitors. Some providers are reporting their apartments are already fully booked for the duration of the Games, whereas others are giving existing clients first option based on 2011 bookings.

Many of our clients are working to see if their employees can work in an office outside of London during the Games, where temporary accommodation will be available and cheaper. Where this is not
possible, Relocation Providers are working with their clients to understand demand and in some locations, where possible, are pre-booking, to allow their Corporates more choice.

Rental Accommodation
The availability and cost of rental accommodation within commuting distance of key venues will inevitably be impacted by the lead up to the Games. This is against a background of a rental market
that is already challenging, with a shortage of property of all types and a rise in demand from both corporate and private tenants.

Recognising not only issues of cost and availability of accommodation, but also that moving in or out is potentially going to be more difficult during the Olympics because of such factors as port congestion and increased security checks, not to mention road closures and kerbside delivery restrictions in the capital, some clients are delaying relocations until after the Games.

Among clients who need to have assignees in London before, during and immediately following the Olympics, there is naturally a high level of concern.

Some clients have asked that properties are sourced and rented immediately and used as temporary accommodation in the interim, on a rotational basis, until they are needed for more long term rental
next summer. There is of course a massive cost implication to this.

To counteract the inevitable increases in rents, some providers have suggested reviewing employees’ tenancy agreements before they are due to expire and persuading landlords that it is in their interest to stick with the tenants they have – responsible, trustworthy and backed by a company – rather than simply to seek the highest-possible rent in the short term.

Other advice to consider are, where possible, to reschedule assignments and business trips, focusing on essential travel and moves, to seek alternatives such as video conferencing or using a location outside London, to plan ahead and make block bookings, and to fix dates in advance to cover known or anticipated needs.

Given that rents have increased by 12% in the last year, some experts have said they expect them to rise by a minimum of another 25% during the Olympics. However, rises will be location-specific, and many areas will not be affected.

At the moment, larger professional landlords are still treating offers as usual, and larger reputable agents are encouraging their landlords to give options to renew as normal, thought there is a considerable difference in the attitude of landlords with properties in North London and those with properties in East London.

Immigration
The UK Border Agency will be responsible for ensuring the smooth arrival, and departure, of people and goods participating in the Games. This will include running security checks on over 450,000
workers and participants, considering visa applications from visitors and some of the 14,000 athletes from over 200 nations competing, and supporting other agencies responsible for security.

Given the increased workload and the heightened levels of security, it is almost inevitable that there will be an impact on the processing of visa applications and household goods clearances for moves
that are not directly related to the Games. Delays should, therefore, be factored into assignment planning in terms of both visa applications and the delivery of household goods shipments as shipments may be held at ports while customs clearances are completed.

Logistics and Household Goods
With the enhanced security measures, potential delays in customs clearances and the restrictions on the road network, it is clear that household goods moves in areas affected by the games will be
problematic for the period of the Olympics. In London, the partial closure of streets and access restrictions will mean moving and logistics companies trying to deliver an increased volume of shipments during a reduced working day, which may lead to shortages of crews. It is understood also that large vehicle movements will only be authorised between 10pm and 7am within the restricted areas, although this is yet to be officially confirmed.

This shortage, and the potential increase in costs as moving companies look to utilise shuttle services due to access restrictions or conduct moves outside of normal business hours – shipments at night may be possible as access restrictions are relaxed – may lead to additional costs being passed on to clients for moves during this period.

Household goods experts will be able to offer a range of cost effective solutions to the challenges posed by the Olympics, to minimise as far as possible any increase in shipment costs.

In summary:

  • Consider your global mobility strategy
  • Start planning and budgeting now
  • Think about alternatives where possible
  • All those involved, including relocating employees, need to show flexibility and willingness to compromise communication, especially to business heads, who need to be aware of the specific challenges faced.

Ultimately, if this is all sounding too difficult and messy, the solution is to avoid assignments to London between May and September 2012!

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