The “Super Bowl Effect” Isn’t All That Super for Hotels

February 1, 2017    Category : Impacts   Posted By : Alina Kostek

Breaking Down the Effects of the Super Bowl on a Host City’s Hotel Market

_______________________________________________________________________________________________________

The impact of the Super Bowl on hotel occupancy and profit is not as black and white as one would think. Many factors come into play that need to be considered when looking at how a hotel might benefit from the big game. The most important factor: location, location, location!

_______________________________________________________________________________________________________

The NFL boasts about the hundreds of millions of dollars in economic growth that come the way of the Super Bowl host city every year. With thousands of fans, players, staff, and media to be in attendance, there will absolutely be an economic boom for businesses in the area. But there are misconceptions about the value of the effect and exaggerations are made when the data is not presented for comparison.

Let’s start with location.  Multiple location variables come into play when considering the impact of the Super Bowl on hotel markets such as the city and state, the host city’s typical occupancy on a weekend in February, and the location of hotels surrounding the stadium. These three components give us a hint as to why the economic predictions each year are usually way “out of bounds.”

Even though the location for the Super Bowl changes each year, there are consistent characteristics that resonate among the choice cities, specifically “host-ability” and weather. These cities are chosen mainly due to the fact that they have a stadium large enough to host thousands of football fans. But not so coincidentally, these cities are also tourist destinations and home to multiple events throughout the year. In terms of weather, 8 out of the last 10 Super Bowls were in locations with warm winter weather (CA, FL, AZ, LA, TX). This means that in the first weekend of February you will not only have Super Bowl fans flooding the area, but also your average snowbird and vacationer looking to dip away to a warm winter destination. The predictions on hotel occupancy to the Super Bowl effect are typically inflated with no base point or reference to a city’s typical revenue in February. Even though hotels may be filling to 95% occupancy on Super Bowl weekend, neglected is the idea that hotels would be reaching this number regardless, because of the city’s normal tourist activity and city wide events.

Now let’s consider the location of the stadium in relation to surrounding hotels. With Super Bowls in years past drawing crowds of 70,000 plus, there are always plenty of fans looking for rooms. However, the city’s surrounding hotels can experience either a benefit or drawback from such an infamous event. Hotels in the same city as the stadium will most likely reap the benefits of having thousands of attendees by increasing rates and seeing high occupancy because of the demand. As for the hotel markets just outside the host city, one of two things can happen: room night compression or occupancy nightmare. Surrounding hotels will be able to charge competitive rates when there is overflow from the major city’s hotels filling to capacity. On the flip-side, some markets just outside the overflow zone will be sucked dry as their typical foot traffic migrates towards the Super Bowl action.

Although hotels in the past have seen record sales during Super Bowl weekends, sometimes this spike in revenue is not enough to offset the poor occupancy during the week leading up to the game. As mentioned earlier, these host cities are home to many events and travelers annually, not just when the Super Bowl comes to town. With thousands of football fans flooding in, the result could be a negative impact on demand from the non-football customers. Frequent residents and travelers will most likely avoid the area due to overwhelming crowds of fans during Super Bowl week.

All things considered, a host city’s hotel market will in fact benefit from 70,000+ fans attending the event, but by how much is the question. Numerous studies have calculated numbers that say a Super Bowl host city will drive home anywhere from $400-$700 million in revenue, but this number is continually debated. A current prediction for Super Bowl LI from The Greater Houston Partnership, says that $78.9 million will be spent on hotels during Houston’s Super Bowl week. A search on hotel rates a day prior to publication found hotels within a 5-mile radius from NRG Stadium ranging from $360-$1,370 per night on Super Bowl weekend (if they are not sold out already). If you want to stay in these same hotels the weekend following the Super Bowl, it’s only $68-$185 per night!

The chart below displays a comparison of rates for select hotels located within a 1-mile radius of NRG stadium that are capitalizing on the high demand during Super Bowl weekend.

Hotel

Distance from NRG Stadium

Starting price for regular weekend in February (2/10-2/13)

Starting price for Super Bowl weekend (2/3-2/6)

Quality Inn & Suites NRG Park – Medical Center

0.5 miles

$69

$499-$699

Staybridge Suites Houston – Medical Center

0.5 miles

$145

$620-$1,370

Holiday Inn Express & Suites Houston Medical Center

0.6 miles

$103

$470

Moody’s Manor

0.8 miles

$179

$499-$799

Candlewood Suites Houston Medical Center

1.0 miles

$80

$370

(prices from hotel’s direct booking sites)

Looking strictly at the numbers and rates, a majority of the hotels in the immediate radius of the stadium will undoubtedly see a very positive impact on profit for the Super Bowl weekend. But the extent of the positive impact can only be fully grasped after looking at the extended effects on occupancy and rates in the days and week leading up to and after the big game, as well as the impact on neighboring markets.

 

Leave a Reply

Your email address will not be published. Required fields are marked *