NHL & Hotels: The Smashville Scenario
With the Stanley Cup Playoffs now in the last stretch of the finals, all eyes are on the Predators and Penguins. There’s no doubt that fans’ keen interest throughout the playoff season has paid off for hotels fortunate enough to be located near the arenas where the battles unfold. But predicting high occupancy for hotels isn’t as easy as plotting ice rinks on a map—even during a tournament like the Stanley Cup Playoffs. Hotels can count on an increase in revenue during the Playoffs, but without taking other factors into account, their predictions can be way off. The dedication of a team’s fan base, how deep into the season the game takes place, and even the day of the week influences whether a hockey game will correlate with a huge increase in hotel occupancy or a middling one. External factors may have an even greater influence on occupancy rates than the game itself.
Example: The Bruins Impact
The Boston Bruins command one of the most dedicated fan bases in ice hockey. When the Bruins play on their home turf, TD Garden, it’s always a sell-out event. So what does that mean for nearby hotels during a Bruins home game?
Obviously, hotels within a certain distance of TD Garden benefit when the Bruins play. The Bruins have seen their home games sell out (all of them!) since the 2010-’11 season. With a seating capacity of 17,565 at TD Garden and assuming an average of 41 home games per season, that’s potentially more than five million spectators filling those seats over the past seven years.
Looking back, a hotel might see a tremendous occupancy rate on a date that the Bruins played—and conclude that it was because of the Bruins game. However, without sophisticated tracking of multiple factors, it’s entirely likely they’ll miss the real reason for the increase—and, subsequently, miss a chance to pin down similar opportunities in advance. In cities like Boston, where a cornucopia of events draws tourists of every taste, a narrow focus can result in wildly inaccurate predictions.
Picture a scenario where the Bruins are playing at home. It’s a Friday night, they’re set to play against a top-ranked team, and there’s also a conference planned to take over the Boston Convention Center. Now, you can bet that your rooms will be in high demand!
How to Score a Hat Trick
It’s a fairly safe bet that sporting events like the Stanley Cup Playoffs will result in a revenue increase for nearby hotels. However, a direct correlation to any single game can’t be guaranteed. Other factors contribute to an increase in demand—the team’s opponent, how far their fan base is willing to travel, at what point in the season they are playing—as well as external factors. Perhaps the economy is at a low point and people are less willing to spend money, or a blizzard is moving into the region. Some economists theorize that a stadium’s presence might even decrease revenue in surrounding businesses, since fans skip dining out to save up for tickets. Only by taking into account the complete picture can hotels create a reliable predictive model on which to base their expectations and their expenditures.
So, how can a hotel keep tabs on the multiple events and real-time factors that influence occupancy rates? The answer is through Neirbi Analytics, a data-driven, predictive platform for hotels that doesn’t just track the Stanley Cup Playoffs. Neirbi takes into account everything from weather to traffic, economic factors to the volume of weddings in a market and runs an analytical comparison to occupancy and rate in a market. The Neirbi engine then edits through all of this noise to predict opportunities and threats to demand for a property. This knowledge is invaluable for creating a budget, setting rates, launching targeted marketing campaigns and increasing the bottom line. The old way—looking at a single event like a Playoffs game and planning around it—will seem outdated upon realizing how many other variables come into play. It’s the combination of standalone events like the Playoffs and continuously fluctuating, real-time factors that determine hotel demand.
This Stanley Cup finals season is a Nashville hotelier’s dream as the Predators’ fight for the Cup could potentially coincide with the CMA Fest if there is a Game 6 on June 11. With two events simultaneously set to take over the city, rates are skyrocketing! A quick search two weeks out has downtown Nashville 90% sold out with available remaining inventory going for a minimum of $359 for Saturday night, June 10. A perfect scenario.
The current rise of the Predators to the finals has undoubtedly sparked more passion and dedication from Nashville fans which will lead to an increase in demand for rooms as the 2017/2018 season gets underway. But hotels in that area cannot jump too fast on increasing rate!
According to STR, of the more than 12,450 hotel rooms currently under construction in Nashville, 3,927 are in the planning phase, 2,402 are in the final planning phase, 3,573 are under construction and 2,546 are under discussion.
With the flood of supply into the market, Nashville hotels cannot base rate simply on the increase in demand around home Predator games, but must take into consideration the new supply in the market, weather, and by that time, the new variables tossed into the market related to politics and economy.
It is a continuous evolution with variables constantly impacting hotels in different ways. Looking at history or one or two main events in the market leaves much to chance. With the rise of data and analytics firms like Neirbi Analytics, a hotel can be incredibly more efficient in strategy and as a direct result, reap the benefits of an increased bottom line.