Jerry Jones might be embarrassed to host the greatest game on turf sans his Cowboys this year (despite his early-season predictions), but the city of Dallas has plenty of reasons to celebrate. Hosting the Super Bowl creates a massive economic infusion for any host city. In Dallas, hotels, restaurants, rental-car companies, Terrible Towel purveyors and beer vendors alike all have been dreaming of these magical two weeks leading up to the final event.
I thought it might be interesting to see what kind of effect the Super Bowl actually has on the host city's hotel base, using last year's 7 February game in Miami as a base of analysis (Indianapolis Colts vs. New Orleans Saints). I pulled the daily hotel data for the two weeks prior to and the date including the game, both for the year of the game and the prior year, so I could look at percent changes.
Across all chain scales in Miami, the results were:
As a baseline, the total revenue increase for the State of Florida in February 2010 was roughly 5%, so the whopping 48.7% increase in revenue per available room for the two weeks leading up to the Super Bowl clearly was a result of the game. No surprise there, obviously. It is interesting that rate increases were only moderately greater than demand increases; while price-gouging certainly must have occurred in pockets, overall pricing push wasn't extraordinary given the demand spike.
It's more interesting to dig into the data by individual chain scale. These results are detailed in the following table (note these chain scales do not reflect the recently adjusted chain-scale system implemented by STR).
The independent hotels were able to push Super Bowl rates the most, at more than 32% in the two weeks leading to the game, followed closely by the luxury chains at 29%. The demand increase leaders were the luxury hotels at nearly 39%, following by the upscale hotels. Overall, luxury hotels were the clear overall winner, posting a massive 63.3% increase in RevPAR, more than double the RevPAR gains achieved by the midscale and economy hotels.
Even in a deep recession, people still want to see the Super Bowl live, just not as much. On 1 February 2009, the Steelers took home the Lombardi trophy after squeaking past the Cardinals in Tampa. For the month of January, Florida hotels posted a crushing 12.7% revenue loss. In Tampa, however, the two weeks leading to the Super Bowl earned the local area hotels a 29% RevPAR gain, this time led by the upscale chains (47.7%), and followed by the luxury chains (40.2%). Most interestingly, total demand increase in Tampa was just about flat compared to the prior year (an achievement in and of itself given the national decline), and the RevPAR gain from the Super Bowl was almost wholly attributable to rate increases.
One way or another, in good times and bad, the Super Bowl represents big bucks for any host city, and given the trend last year, expect luxury hotels to hit it especially big in Dallas this year. Jerry, maybe you should have spent an extra couple hundred million to build a Four Seasons next to your pigskin palace …