A major hotelier in Australia gets in touch to explain that the prices charged during the weeks of the Olympic Games are more than justified. Because, pretty much no matter what they charge, the hotels at the high end of the market will lose money on the deal.

Points me to the Arthur Andersen survey which has the snappy heading:

Sydney Hotels Suffer Decreased Food & Beverage Revenue and
Displacement of Loyal Guests During Olympics But Double Average Room Rate

The problem is that hotels — in Australia and Beijing — make a substantial about of their profit from F&B food and beverage.

An Olympic Games guest has an early breakfast (probably included in the price of the room) and then disappears to the Games to return late at night with sleep the major attraction.

During the period all the MICE events (and the includes all weddings which are a nice little earner) are suspended — indeed, at the Beijing Games they are banned — so the typical convention visitor who dines and drinks and stays near and in the hotel is not on the list.

And, indeed, to be on the safe side there appears to be a buffer period each side of the Games when MICE business — meeting, incentives, conventions, exhibitions plus weddings — stops dead in its tracks just to be on the safe side.

Result? Adding it all up the big hotels lose money during the Games. They did in Australia in 2000. And the hotel executive giving th information is absolutely certain the same will happen in Beijing.
Source: Hotel On Line