On-site hospitality an Olympic first
Just 75 yards from London’s Olympic Stadium, a three-story, $12 million temporary structure has been erected to provide the first on-site, corporate hospitality experience at an Olympic Games.
The building is the centerpiece of the London Olympic Organizing Committee’s (LOCOG) hospitality vision for the Games, and the success or failure this summer of the company that built it, Prestige Ticketing, will go a long way to determining if on-site hospitality becomes a new revenue stream for future organizing committees.
|Prestige’s on-site, corporate hospitality (far right) is steps from London’s Olympic Stadium.
Prestige Ticketing is a joint venture that was created after LOCOG decided to develop a package of on-site hospitality rights for the
In addition to that hospitality package, LOCOG sold two separate hospitality packages to Thomas Cook, a British travel agency, and Jet Set Sports, the U.S.-based sports hospitality agency. The groups are packaging tickets with hotel rooms to create customized hospitality experiences. Each national Olympic committee is allocated tickets, as well, and U.S. Olympic Committee sponsors and national governing bodies can secure tickets for hospitality experiences from the USOC’s official hospitality partner, Jet Set.
But Prestige is the only group that can offer an on-site hospitality experience during the Games. The company received 80,000 tickets, roughly 1 percent of the total for the Olympics, and rights to set up on-site hospitality structures at several venues: the Olympic Park for athletics, aquatics and other events; Eton Dorney for rowing; Greenwich Park for equestrian; Horse Guards Parade for beach volleyball; North Greenwich Arena (the O2) for basketball; Wimbledon for tennis; and several soccer stadiums.
Prestige hospitality packages range in price from $12,000 per ticket for the opening ceremony, one of the most prestigious events, to $795 for rowing qualification events. The majority of tickets are priced at less than $1,500, and most include breakfast, a four-course lunch and a champagne reception.
To date, Prestige has sold 80 percent of its inventory. It has sold out of tickets for beach volleyball, tennis, diving and field hockey medal events. It has held back some tickets for high-demand events such as the opening and closing ceremonies, and some track and field events, and has begun to sell individual tickets to events like the preliminary rounds of basketball, handball, rowing, track cycling, artistic gymnastics and early tennis matches.
Some 80 percent of hospitality package buyers to date are corporate customers. The other 20 percent are individuals.
Nearly 75 percent of buyers are based in the United Kingdom, but Prestige has had strong demand from select international markets such as India, Hong Kong, Singapore and the Middle East.
Gilpin said that developing a price structure and sales strategy for Prestige hospitality packages was difficult because what the company was offering had never been sold before. His staff of 45 people spent time reviewing hospitality prices for the FIFA World Cup, Rugby World Cup, UEFA Champions League final and Formula One to develop prices and a strategy for selling inventory for the London Games. They ultimately decided that if people were willing to pay $7,500 for hospitality at last year’s Champions League final in Wembley Stadium, then they would pay at least that or more for marquee Olympic events.
Prestige had to get LOCOG’s approval for its pricing plan.
Initially the company leveraged its position to require major up-front commitments from customers. For example, it required businesses wanting to entertain clients at marquee events like track’s 100-meter final to buy 10 tickets for that event plus tickets to other events, reportedly bringing the minimum purchase price to $425,000.
But it’s changed and adjusted prices over time in an effort to find buyers for remaining inventory at events ranging from field hockey to handball. It recently partnered with Ticketmaster to sell some of that remaining inventory online.
“It’s a complex program to put together because it hasn’t been done before,” Gilpin said. “We’ve adjusted a few prices over time. Some have gone up, and a few have gone down.”
The centerpiece of Prestige’s hospitality offering is the three-story structure it built adjacent to the Olympic Stadium inside London’s Olympic Park. The facility has a glass atrium and can accommodate 3,000 guests. It will offer a four-course lunch with locally sourced items like smoked salmon and a post-event reception with desserts and gourmet cheeses.
“It’s a bit of an oasis of calm in what will be the madness of the Olympic Park,” Gilpin said.
With two months remaining until the opening ceremony, Gilpin believes that Prestige will sell out of its hospitality inventory and provide a great experience to its guests. He said they have had some discussions with the International Olympic Committee about the program and that it plans to review the program and relay lessons from LOCOG’s experience with on-site hospitality to future Olympic organizers.
It’s too late to add on-site hospitality for Sochi 2014, but the IOC has said it plans to meet and discuss the viability of a similar program with the organizers of the 2016 Games in Rio de Janeiro and 2018 Games in Pyeongchang, South Korea.
Gilpin said the program definitely makes sense in the U.K., where corporate demand is strong, but he’s not positive it will work in other markets. As Rio 2016 weighs that option, Sodexo and the Mike Burton Group plan to work together on other events. The two companies are using their work on Prestige Ticketing as a jumping off point for other business. They partnered to work on corporate hospitality for the next two Rugby World Cups in England in 2015 and Japan in 2019.
“Life doesn’t begin and end for us with London 2012,” Gilpin said. “It’s a great project, but it’s a great part of a developing business.”