Sporting events drive performance

Sporting events have a huge impact on all key performance metrics and are a great way for U.S. cities to boost performance numbers.

By Karrie Keen

This article originally appeared on HotelNewsNow.com. It has been republished with the site’s consent.

Major sporting events are not just competitive for the teams or individuals competing in them but also for the cities that put in their bid to host the event.

Tourists come from near and far to stay in local hotels, spend money in restaurants and retail shops, and buy items from local stores. These sporting events draw thousands of visitors, which allow hotels in that destination to drive all key performance metrics.

No two events showcase this more than the Super Bowl and the NCAA Final Four basketball championship. Because each event occurs in different U.S. cities every year, each market is affected differently.  

Looking at the last four Super Bowls from 2009 to 2012 and the 2006 Super Bowl hosted in Detroit, Miami and Tampa, Florida (hosting in 2010 and 2009, respectively) were the least affected markets in terms of incremental room demand, as these markets are already high demand markets during the time of the year the Super Bowl occurs in February.

The Dallas market, which was home to the 2011 Super Bowl, reported the most incremental room demand at approximately 53,100.

The magnitude of the impact of growth is influenced by the size of the market.

The 2011 Super Bowl in Dallas reported the highest incremental room revenue of $19.6 million, or a growth of 411%.  Indianapolis, which hosted the Super Bowl in 2012, reported the second highest incremental room revenue, but took the top spot for its room revenue growth of 1,218.4%, which is roughly the same revenue growth as Miami.

However, Miami showed the lowest percent growth of only 130%. 

Similarly Tampa and Detroit both had the exact same incremental revenue growth, but Detroit’s percentage growth over the prior year more than doubled that of Tampa’s.

Miami reported less than a $30 premium over the rates in Indianapolis, but between a $90 and $130 premium compared to Tampa, Detroit and Dallas.

Occupancies were the highest in Indianapolis (96.5%) and Miami (90.3%), while they were less than 85% for the other three Super Bowl host cities.

The high occupancy in Indianapolis allowed the hotels in the market to push rates more than any other market with a total rate growth of 367% over the prior year. 

The Final Four

Another big event in sports is the Final Four. In the past 11 years, four cities have had the privilege of hosting this event multiple times: Atlanta, New Orleans, San Antonio and Indianapolis.

Incremental room demand was its highest when held in Houston in 2011 at approximately 74,400. The highest room demand growth was seen in Indianapolis in 2010 at 107.7%.

With the highest demand growth pushing the highest average-daily-rate growth, the top spots in room revenue growth are the same as occupancy.

Houston in 2011 took the top spot in incremental room revenue reporting a growth of $13.2 million. From a percentage growth standpoint, Indianapolis’s 2010 incremental room revenue was the highest reported, with a growth of 293.6%.

The highest RevPAR was reported at both New Orleans appearances: $219.75 in 2012 and $154.12 in 2003.

Sporting events have a huge impact on all key performance metrics. While the Super Bowl and the Final Four are only two of many sporting events that go on throughout the U.S. each year, the data shows that sporting events are a great way to boost a destination’s numbers.

For an in-depth look at how sporting events impact RevPAR, there will be a breakout session titled "A special kind of impact: Calendar dates and RevPAR trends" during the fourth annual Hotel Data Conference on 5-6 September at the Loews Vanderbilt Hotel in Nashville, Tennessee.