London gets tough on hotel rip-offs to bolster Olympic bid

Room rates at London hotels will be capped in an attempt to prevent profiteering if the capital wins the bid to stage the Olympic Games in 2012.

Room rates at London hotels will be capped in an attempt to prevent profiteering if the capital wins the bid to stage the Olympic Games in 2012.

Bid leaders have agreed with the hotel industry to curb exorbitant rates after concerns in the Olympic movement that the Games are being perceived as a rip-off. Details of the plan are in a 600-page Games blueprint, known as the candidate file, submitted yesterday to the International Olympic Committee (IOC) in Switzerland.

Hotels in the the deal are said to have agreed to charge no more during a London Olympics than their 2004 room rates, adjusted for inflation over eight years. In Sydney and Athens, there were no price curbs and the cost of a typical room at £200 shot up to £300 during their Games fortnight.

In the deal, likely to find favour with the IOC, the hotels would benefit from endorsement from organisers of a London Games. This would give hotels a huge boost in bookings for up to seven years, as contractors and Olympic officials visit the capital to prepare for the event. A similar deal will be offered by London's arch-rival, Paris, which claims to have 50,000 hotel rooms and already has an agreement on prices with hotel groups.

It is not known whether the London price-capping deal will be legally enforceable. Richard Harden, editor of Harden's Hotel Guide, said that, unlike in France, there was no tradition of price regulation in the UK and the system might rely too heavily on fair play. "You can have any scheme people would sign up to but it is a question of how you police it," he said. "It's not the good guys you need to worry about but the bad guys."

Accommodation is considered one of the stronger aspects of the London bid, with an estimated 45,000 hotel beds and a range of hotels to suit both high-rolling IOC members and spectators on a tight budget. London 2012 also aims to impress the IOC with a plan to encourage households across the South-east to offer low-cost lodgings. People with homes as far afield as East Anglia and the Midlands will be encouraged to sign up because they are within range of the Olympic Park in Stratford via a high-speed Olympic "Javelin" train from King's Cross station.

Yesterday marked the beginning of a new stage in the five-city race to host the Olympic Games in 2012. Each candidate city - London, Paris, New York, Moscow and Madrid - has submitted proposals to the IOC. Starting this week, there are fewer restrictions on promotional work under IOC rules designed to limit expenditure and prevent corruption. Bidding cities are permitted to "sell" to IOC members via e-mail, letter, video or telephone and have been given the private addresses of the 117 members eligible to vote.

Meeting members in person is banned, with the exception of a handful of IOC events which will serve for bidding cities as a dress rehearsal for the vote in Singapore next July.

Details of London's candidate file will be published on Friday. The document will be read in detail by experts in the IOC secretariat and will be distributed to voting members worldwide. Claims made in the candidate file will be scrutinised by an IOC inspection team which visits London in February.