2012 Olympic Games Impact on Relocation

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1 Information from Cartus on Relocation and International Assignment Trends and Practices 2012 Olympic Games Impact on Relocation This issue is the second in a series of Cartus communications, providing information and policy and programme advice on the impact of the London 2012 Olympic Games on UK based international assignments. Although we are not in the home straight yet, we are approaching it fast with less than a year until London hosts the 2012 Olympic and Paralympic Games. With 5.3 million visitors estimated to be visiting the city next summer, there will inevitably be travel and logistical disruption in the lead up to the Games and during its six week duration. As the Olympic Games are not the only major event scheduled for 2012, we are anticipating that London-bound relocation will be heavily impacted between April and September next year. As the Olympic Games are not the only major event scheduled for 2012, we are anticipating that London-bound relocation will be heavily impacted between April and September next year. Queen s Diamond Jubilee Saturday 2 June to Tuesday 5 June. Wimbledon Tournament Monday 25 June to Sunday 8 July. Olympic Games Friday 27 July to Sunday 12 August. Paralympic Games Wednesday 29 August to Sunday 9 September. With plans to broadcast the Games live on large television screens throughout the city, it is not just the ticketholders and athletes descending on London that will impact relocation, but the many tourists who will be visiting to soak up the festival atmosphere. Once a suitable property or hotel has been located, rental and hotel prices will reflect the lack of availability in the city at that time. A C C O M M O D AT I O N Finding temporary accommodation in London during the Olympics may be challenging. Certainly, once a suitable property or hotel has been located, rental and hotel prices will reflect the lack of availability in the city at that time. H o t e l R o o m s a n d S e r v i c e d A p a r t m e n t s In addition to the ticketholders and tourists, your assignees will also have to compete with the London Organising Committee for the Olympic Games (LOCOG) for accommodation as it is estimated that they have secured 65% of London s hotel rooms. 1 However, the LOCOG may not need their full allocation and it is expected that they will start releasing rooms in January of next year. Contact your travel booking provider for more information on hotel booking during the Olympics. Although availability of London hotel rooms appears to be low, temporary accommodation such as serviced apartments has, so far, not been reserved in such high numbers, although this situation is expected to change. Currently, there are no accommodation providers that we are aware of guaranteeing rates for the Olympic period. Demand however is high, with one of our providers reporting receiving requests from organisations wanting to rent up to 1,000 properties at a time, which is an insight into the level of demand that we may be facing when trying to secure properties for clients. Despite such requests, many providers are not committing to agreements at this time, with many not prepared to lease the majority of their stock to one client, preferring to maintain 1 British Hospitality Association (July 2011) P A G E 1 O F 5

2 good relationships with their existing customers. With this in mind, now is the time to talk to your regular providers to discuss your requirements for next year. Rental prices for residential properties are being driven up by amateur landlords who are renting low end properties near Olympic venues and setting rental prices exceptionally high. R e s i d e n t i a l P ro p e r t i e s In comparison, rental prices for residential properties are being driven up by amateur landlords who are renting low end properties near Olympic venues and setting rental prices exceptionally high. Private landlords are also refusing tenancy renewals and long-term lets because of the profit they can make by renting properties out for just three months next summer. Rental prices are expected to continue to rise to the end of 2011 as a number of television companies will be looking to obtain properties from as early as October this year; most probably block booking large quantities of accommodation. Tu r n k e y P ro p e r t i e s a n d B l o c k B o o k i n g Typically, the minimum stay when renting an apartment on a corporate lease is seven to 14 nights, but we anticipate that this may be increased to one month during the Olympics. If you have short-term assignments scheduled next year, consider using turnkey properties as a temporary accommodation option. Depending heavily on the cost and duration of your booking, turnkey properties are booked for a set period of time and can be used on a rolling basis (check your lease terms and conditions for more details). This way, if one assignment finishes when another begins, tenants are able to change over. You may want to book turnkey apartments for six months (April 2012 to September 2012) and use these properties for your assignees moving in and out of London during the Games period. Advance planning makes turnkey properties even more effective as you will be charged for the period the property is booked, regardless of it being occupied. Look at all your scheduled assignments for 2012 and manage start dates so that they coincide with end dates, allowing you to make full use of your turnkey properties. Clients are already using this method, so decisions should be made fast. Block booking is also a credible option. Consider block booking temporary accommodation for six to nine months to ensure availability during summer Instead of booking rooms for just the summer, block booking them for an extended period (nine months) may reduce the overall cost of accommodation. You should also consider renting medium- to long-term leases in towns outside of London, which have good rail links into the capital. A c c o m m o d a t i o n O u t s i d e L o n d o n You should also consider renting medium- to long-term leases in towns outside of London, which have good rail links into the capital. As the Olympic Village is based in East London, the majority of visitors will be using transport links within this area, so look at accommodation in towns that would enable your employees to avoid commuting to London through the busiest part of the transport network (i.e. East London). For example, towns north of London like Stevenage (30 to 40 minutes to London by train) and Milton Keynes (35-55 minutes), towns that are south of the city like Gatwick (30 to 40 minutes) or west of the city like Reading (30 minutes) and Slough (35/45 minutes) have commute times of less than an hour and rental prices at a lower rate. Seeking accommodation further afield is becoming a popular option for many organisations, with a priority to secure apartments anywhere within the London area. Indeed our clients are looking, for example, at Bristol (one hour and 45 minute commute) and Swindon (one hour commute) as potential commuting areas. When booking accommodation for the Olympics, please be aware that there have been reports of bogus temporary living Web sites being set up to capture credit card details. Cartus ensures that we only book through long standing providers who are monitored to strict Cartus regulations, offering our clients security and assurance. P A G E 2 O F 5

3 With an extra 855,000 people expected to use public transport next summer, this will significantly impact assignees travelling around the city. T R A N S P O RT With next year s Olympics presented as the Public Transport Games, transport remains the key challenge for the Olympic Delivery Authority (ODA) who aim to reduce the number of commuters using public transport by 30% during the Games period. The ODA estimates that on a typical working day, approximately 3.4 million people use London s rail and underground services and 5.8 million use London buses every day. With an extra 855,000 people expected to use public transport next summer, this will significantly impact assignees travelling around the city. Ensure that your assignees are prepared for delays by pre-warning them of the increased traffic in and around London at that time. In some places during the Games it could take assignees significantly longer to get to work. For example, Transport for London (TfL) has estimated that it may take up to one hour just to board a train at Kings Cross St. Pancras station; the main channel to the Olympic Village. Transport for London and the Olympic Delivery Authority launched a new online tool in July 2011 that companies can use to help prepare for next summer s event. O l y m p i c R o u t e N e t w o r k London roads will also be impacted, with a designated Olympic Route Network (ORN) and Paralympics Route Network (PRN) scheduled to be set up across London to create easy access to all Olympic venues. In most instances, the route will be open to general traffic and clear of obstructions and road works. Within the Network, temporary Games Lanes will be set up which will only be accessible to athletes, officials, the media, and emergency services. The Games Lanes will also include some temporary changes along the routes including changes to traffic signal timings, suspension of parking or loading bays and the suspension of some pedestrian crossings. Again, this will delay parts of an assignee s relocation programme, for example, a planned two-day school search trip may have to be either delayed or allocated more than two days. O n l i n e To o l t o H e l p B u s i n e s s e s Transport for London and the Olympic Delivery Authority launched a new online tool in July 2011 that companies can use to help prepare for next summer s event. The tool can be found on the official Olympics 2012 Web site and includes: a practical handbook for businesses action plan templates sample surveys for employees, customers, and suppliers to ascertain how the Games will impact each of them maps and detailed transport information for London areas factsheets across a range of Olympic-related topics communication templates to send to employees template text for company intranets. For companies with less than 200 employees based in areas set to be impacted by the Games, the LOCOG has set up Travel Advice for Business workshops, scheduled to take place in transport hotspots across the city. Over 50 of these free workshops will be available to companies and will focus on how to build a business action plan, manage employee commutes, company deliveries, and maintain services. Organisations with over 200 employees may be eligible for free assistance from a dedicated London 2012 travel advisor. For more information or to sign up to a workshop, please the Olympic Delivery Authority, keeponrunning@london2012.com with your contact details, company address, and number of employees. The Olympic Web site also provides business support for companies who may be impacted by an Olympic event based outside of London. Due to the volume of visas that the UKBA will be processing, make sure all UK visas are applied for three months before the date of travel. I M M I G R AT I O N, S E C U R I T Y, A N D F R A U D The UK Border Agency (UKBA) reports that it expects to clear 70,000 Games Family Members (athletes, coaches, officials, etc.) and 450,000 applicants (tourists and ticketholders) through their Olympic Clearing House (set up specifically for the 2012 event). Due to the volume of visas that the UKBA will be processing, make sure all UK visas are applied for three months before the date of travel. You should identify the assignees, their nationalities, and the home location to ensure both immigration services and Cartus have as much time as possible to process the application. P A G E 3 O F 5

4 R E C O M M E N D AT I O N S M a n a g i n g E x p e c t a t i o n s W i t h R e g u l a r C o m m u n i c a t i o n Ensure that you update your assignees with as much information as possible regarding the challenges and logistical difficulties that they may encounter in London during the Games. Resources everywhere will be stretched not only because of the increased population in the capital, but also because many London-based employees may be attending the Games themselves. If you have a high population of assignees in London, consider setting up a company Olympic committee to meet regularly and discuss any potential challenges. Company-wide communications can then be sent following each meeting. F l e x i b i l i t y A reasonable amount of flexibility should be demonstrated by both your organisation and assignees. If an assignee is scheduled to move to London with their family during the Olympics, then they may wish to move their family at a later date. The lack of availability and high cost of accommodation means that it would be far easier to relocate one individual than an entire family. From an organisational perspective, you should consider offering assignees a temporary flexible working option for the duration of the Games. This could mean allowing them to arrive later into the office to avoid the morning traffic or allowing them to work remotely. R e s c h e d u l i n g Plan your 2012 global mobility programme carefully. The number of expected moves during the Olympics and the duration of each move should all be clearly laid out so that both you and Cartus are fully prepared. If it is not a business priority to relocate employees during the Olympics, consider either bringing scheduled assignments forward or delaying them until after the Games have finished. Repatriation should also be given the same careful planning if assignees are returning to the UK during the Olympics. Even if they are not based in London, UK airports, shipping, and customs will all be delayed during this period so repatriated assignees may be impacted. A d a p t C u r re n t P o l i c i e s Lower level assignees that receive lump sum payments instead of bespoke relocation support will be impacted during the Games as they are self managed. Consider increasing lump sum payments for this period as flights, accommodation, and transport costs may all increase significantly. With this in mind, you should also consider increasing your cost of living allowance and your housing allowance, with some of our clients estimating that a 20% increase is required to meet current demand. For a relatively small cost, your employee will feel more supported and focused on their role in the business. Shipments and distribution and haulage costs are also expected to rise in anticipation for next summer s Olympics owing to traffic management restrictions. Shipments and distribution and haulage costs are also expected to rise in anticipation for next summer s Olympics owing to traffic management restrictions. Indeed, many logistic companies are predicting that more vehicles and drivers will need to be deployed and are increasing rates accordingly. Again, consider reflecting these price rises in your household goods shipment allowances. We advise that both home finding trips and school searches in the London area be delayed during the Games period as the level of traffic will make it challenging to see more than a few properties/ schools. If you decide to carry out these trips then consider extending them, for example a home finding trip should typically be five days instead of three. This will increase the cost, but you should establish (from the outset) what is most important to your business in 2012 cost effectiveness or smooth relocations. P A G E 4 O F 5

5 O t h e r U K C i t i e s I m p a c t e d Although London will be the main venue for next year s Games, even if your assignees are not based in the capital or its surrounding areas, you should still make sure your company is prepared for 2012 s event. All major UK cities will be impacted, for example, the Olympic football tournament will be hosted in Glasgow (Scotland), Cardiff (Wales), Manchester, Newcastle, Birmingham, and Coventry. Furthermore, even if UK-bound assignees are not London based, their flights, shipping, and immigration services will be impacted during this time. C o n t a c t W i t h C a r t u s If you are planning on having a number of assignee relocations to and from London next year, we recommend that you set up regular calls with your Cartus account manager to monitor scheduled assignments and amend policies as needed. We are in regular contact with our destination services, schools, and immigration providers to keep up to date with trends and developments as we near the 2012 London Olympic Games. More Information Official London 2012 Web site Transport for London Web site Sources Official London 2012 Web site Transport for London UK Border Agency For further information, please do not hesitate to contact your Cartus representative. TouchPoint2011a t r u s t e d g u i d a n c e for every move you make. Frankland Road, Blagrove Swindon, Wiltshire SN5 8RS trustedguidanceemea@cartus.com 2011 Cartus Limited. All rights reserved. The information in this Mobility Insights publication is provided in good faith based on information currently available and is therefore subject to change. However, it is not intended to provide specific advice or guidance nor to take the place of either written law or regulations. Cartus assumes no liability for the inaccuracy or completeness or usefulness of the data and information contained herein. P A G E 5 O F 5