The London Olympic Organizing Committee’s (LOCOG) troubles with local hotels have just gotten deeper. The growing animosity between London’s hoteliers and LOCOG, which hit...

The London Olympic Organizing Committee’s (LOCOG) troubles with local hotels have just gotten deeper.

The growing animosity between London’s hoteliers and LOCOG, which hit media outlets two weeks ago, has culminated in at least one hotel pulling its rooms out of the committee’s allocation for the Games. Whether other hotels are considering similar action is unknown.

Premier Inn, a large British economy hotel chain which had entered the agreement with LOCOG to provide a number of rooms at preferential rates, withdrew its allotment last week, basically claiming it had been duped. Premier Inn, along with a number of area hotels, had provided these discounted rooms to LOCOG with the understanding that they would be used for individuals associated with the Games. Room rates were discounted to stay in line with those charged over the past three years, allowing for inflation, and were to be fixed at that level for the Games. As details have emerged in recent weeks regarding the significant mark up on hotel rooms charged by LOCOG’s hospitality partners in their Olympics packages, London’s hotel owners have expressed growing suspicion that these are the very rooms that had been provided at lower rates to the committee.

Administration at a number of hotels, including Hilton Worldwide and Thistle Hotels, London’s largest hotel chain, are in fact charging LOCOG with allowing some of these rooms to be combined in packages and sold by their hospitality partners, specifically the U.S.-based CoSport, which specializes in the international market, and Thomas Cook, carrying lower-end packages.

LOCOG has countered by insisting that CoSport’s public hospitality packages are not associated with the preferential rate rooms provided by London hotels. The committee has acknowledged that these rooms, numbering nearly 1,000, are managed by CoSport, but it maintains that they are destined only for packages sold to national Olympic committees or to sponsors of the Games. LOCOG also contends that those purchasing these public hospitality packages are paying for the privilege of “certainty”: with all Olympic tickets currently part of a lottery system, purchasing these packages are, at present, the only way to guarantee entrance to a particularly desired final.

However, Thomas Cook continues to come under fire for the pricing of some of its packages, such as a three night stay at the Waldorf Hilton with admission to three events plus the Closing Ceremonies for £12,998 ($21,411).

Even London’s mayor, Boris Johnson, has publicly blasted the company for its package pricing, and in response he has proposed a new fair price charter (separate from the British Tourist Authority’s Fair Pricing and Practice Charter endorsed by LOCOG) for hotels and restaurants, which he hopes will have some influence over potential price gouging.

The British Hospitality Association (BHA), representing area hoteliers, has met with LOCOG a number of times in recent weeks over these issues, as well as with representatives from Thomas Cook, with no clear resolution emerging from the meetings.