London is the most expensive place to stay in Europe, according to a recent survey, and that news has emerged at the same time as tourism minister Margaret Hodge has warned that hotels in the capital must shape up in order to be ready for the 2012 Olympics.

The average cost of staying in a London hotel has leapt by a staggering 12% since April, and now averages £119 per night across the capital. Although not as expensive as New York or the world's most expensive place for a one-night stay, Moscow, the rates are remarkably high considering that two-thirds of all London hotels are unrated. The figures show that even relatively meagre two-star accommodation in London averages £88 per night and guests have to typically stump up £109 to stay in three-star rated hotels.

Tourism minister Hodge is worried that the combination of highly priced accommodation and the large percentage of non-rated hotels will damage the reputation of the city, and is keen for the hotel industry to get itself in order. She said: "If the tourist industry is to reap the potential £2.1 billion from the 2012 Olympic Games, then 85% of London's hotels must be accredited before then."

Hodge is concerned that many people attending the 2012 Olympics will be coming to London for the first time and therefore wants their experience of the city to be a positive one. She added:

"Hosting the 2012 Olympics is a huge opportunity for London and the UK tourism industry. In five years London will welcome millions of first-time visitors and we will want them to come back time and again - hopefully bringing their family and friends. It's all about creating a lasting and positive legacy for the capital."

But, the government doesn't expect the capital's hotels to do it all by themselves. A recently unveiled multi-agency strategy entitled: "Winning - A Tourism Strategy for 2012 and Beyond" has been drawn up by the Department for Culture, Media and Sport aided by Visit Britain, Visit London, and an assortment of Regional Development Agencies, aiming to give positive advice and limited financial assistance to the hotel industry throughout London and the UK.

Now that the gauntlet has been thrown down for hotels in London to make significant improvements, it is important that they respond positively if they are to fulfil the government's aim of making the 2012 Olympic Games the start of a lasting legacy.

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